READINGS  IN  THE 
ECONOMIC  HISTORY  OF 
THE  UNITED  STATES 


THE  ECONOMIC  HISTORY  OF  THE  UNITED  STATES 
BY  ERNEST  LUDLOW  BOGART,  PH.D.  Professor  of 
Economics,  University  of  Illinois.  With  Maps  and 
Illustrations.  Crown  8vo.  Net  $1.75. 

EXERCISE  BOOK  IN  ECONOMIC  HISTORY  OF  THE 
UNITED  STATES. 

BY  E.  L.  BOGART  AND  C.  M.  THOMPSON.    $o .50. 


LONGMANS,    GREEN    AND    CO. 


READINGS  IN  THE 
ECONOMIC  HISTORY  OF 
THE  UNITED  STATES 


BY 
ERNEST  LUDLOW  BOGART,  PH.D. 

AND 

CHARLES  MANFRED  THOMPSON,  PH.D. 

OF  THE  DEPARTMENT   OF   ECONOMICS 
UNIVERSITY   OF  ILLINOIS 


NEW  IMPRESSION 


LONGMANS,    GREEN  AND    CO. 

FOURTH  AVENUE  &  30TH  STREET,  NEW  YORK 

PRAIRIE    AVENUE    &    25TH    STREET,    CHICAGO 

LONDON,  BOMBAY,  CALCUTTA,  AND  MADRAS 

1917 


COPYRIGHT,  1916 
BY  LONGMANS,  GREEN  AND  CO. 


First  Edition,  June,  1916 
Reprinted,  December,  1916 


TO 

DAVID   KINLEY 

COLLEAGUE   AND   FRIEND 


PREFACE 

THE  need  of  providing  large  college  classes  with  collateral  reading 
in  a  course  on  the  economic  history  of  the  United  States  has  led  to 
the  preparation  of  this  book.  Its  purpose  has  therefore  been  pri- 
marily to  provide  a  sufficient  body  of  material  to  supplement  the 
more  systematic  text  book  and  lectures.  This  material  has,  with 
only  one  or  two  exceptions,  been  drawn  from  contemporary  sources; 
in  the  later  periods,  with  the  growing  wealth  of  such  material, 
official  documents  have  been  largely  used.  But  in  every  period 
these  documents  have  been  supplemented  by  the  more  human  and 
the  more  illuminating  comments  of  travelers,  observers,  and  others 
who  were  entitled  to  speak  authoritatively.  Where  controversial 
matters  have  been  treated,  every  effort  has  been  made  to  present 
both  sides  fairly. 

In  the  face  of  the  great  amount  of  material  available  for  such  a 
work  as  this  the  main  task  of  the  editors  has  necessarily  been  one  of 
selection,  and  in  performing  this  task  they  have  endeavored  to  present 
a  comprehensive  yet  balanced  picture  of  the  economic  activities  and 
development  of  each  period.  Agriculture,  manufactures,  tariff,  com- 
merce, transportation,  money  and  banking,  labor,  and  the  movement 
of  the  population  have,  each  in  turn,  been  given  due  emphasis  in  the 
panoramic  picture  here  unfolded.  As  among  the  different  periods  it 
is  believed  that  a  balance  has  been  maintained  that  will  commend 
itself  to  teachers  of  American  history.  To  the  period  from  1600  to 
1808  about  one  fourth  of  the  book  is  devoted;  one  half  to  that  from 
1808  to  1860;  and  the  remaining  fourth  to  the  period  since  the 
Civil  War.  • 

No  effort  has  been  made  to  adapt  this  book  of  readings  to  use 
with  any  particular  text,  and  it  is  hoped  that  teachers  of  United 
States  history  in  general  will  find  it  of  value  in  presenting  some 
phases  of  our  development  which  do  not  always  find  a  place  in 

political  histories. 

E.  L.  BOGART 
C.  M.  THOMPSON 
UNIVERSITY  OF  ILLINOIS 


Contents 


CHAPTER   I 
EXPLORATION  AND  COLONIZATION,   1583-1774 

I.    METHODS  or  PLANTING  A  COLONY  PAGE 

A.  The  Cost  of  Colonizing,  1648.    By  Bcauchamp  Plantagenet i 

B.  Articles  of  Agreement  of  Plymouth  Plantation,  1620.    By  William 

Bradford 3 

C.  Disadvantages  of  a  Common  Store,  1620.    By  William  Bradford 4 

II.  SUGGESTIONS  TO  COLONISTS 

A.  The  Advantages  of  Colonies,  1583.     By  Sir  Humphrey  Gilbert. .         6 

B.  Advice  to  Colonists  to  New  England,  1621.    By  Governor  Edward 

Winslow g 

C.  Information  respecting  Land  in  New  Netherland,  1650.     By  Secre- 

tary van  Tienhoven 1 1 

D.  Advice  to  Immigrants  to  Maryland,  1655.     By  John  Hammond.  .  14 

E.  An  Invitation  to  Colonists  for  Carolina,  1666.    By  Robert  Home  15 

F.  Advice  to  Immigrants  to  South  Carolina,  1731.    By  J.  P.  Purry  17 

G.  Design  of  Establishing  the  Colony  in  Georgia,  1733.     By  General 

James  Oglethorpe 19 

H.   Information  to  Those  Who  Would  Remove  to  America,  1760.    By 

Benjamin  Franklin 20 

III.  GRANTS  OF  LAND  AND  LAND  TENURE 

A.  New  England  Laws  on  Inheritance,  1641.     From  Lams  cf  Neva 

England 22 

B.  Advice  on  Granting  Lands,  1665.    By  James  Woodward 23 

C.  Grants  of  Land  by  Governors,  1774.    From  Information  Collected  by 

Board  of  Trade 24 

D.  Methods  of  Granting  Lands,  1773.     By  Captain  Williams 26 

CHAPTER   II 

AGRICULTURE,  INDUSTRY,  AND   TRADE,   1607-1763 
AGRICULTURE 

I.  METHODS  OF  THE  INDIANS 

Indian  Agriculture  in  Virginia,  1612.     By  Captain  John  Smith  ...       28 

II.  AGRICULTURE  IN  NEW  ENGLAND 

Poor  Farming  by  New  Englanders,  1775.    By  the  author  of  American 

Husbandry 29 


x  CONTENTS 

III.  AGRICULTURE  IN  THE  MIDDLE  COLONIES 

A.  Agriculture  in  New   York,   1775.     By  the  author  of  American 

Husbandry 32 

B.  Agriculture  in  New  Jersey,  1749.    By  Peter  Kalm 34 

IV.  AGRICULTURE  IN  THE  SOUTH 

A.  A  Colonial  Plantation,  1686.    By  Colonel  William  Fitzhugh 35 

B.  Tobacco  Cultivation  in  Virginia,  1650.    By  Reverend  J ohn  Clayton .       37 

C.  Tobacco  the  Sole  Crop  in   Virginia,  1703.     By  Colonel  Robert 

Qtiary 38 

D.  Diversified   Agriculture   in    Virginia,    1775.     By   the   author   of 

American  Husbandry 38 

E.  Cattle  in  South  Carolina,  1731.     By  J.  P.  Purry  and  others 39 

F.  Agriculture  and  Stock-raising  in  North  Carolina,  1775.    By  the 

author  of  American  Husbandry 40 

INDUSTRY 

I.   GENERAL  DESCRIPTION 

State  of  the  British  Plantations  in  America,  1721.     By  the  Lords 

Commissioners  for  Trade  and  Plantations 42 

II.   EXTRACTIVE  INDUSTRIES 

A.  Products  of  the  Forest,  1650.     By  E.  W.  Gent 53 

B.  Naval  Stores  in  South  Carolina,  1699.     By  Edward  Randolph ....       54 

C.  Shipbuilding  in  Massachusetts,   1607-1724.     By  George   Henry 

Preble 55 

D.  Fur  Trade  Gained  by  the  French,  1755.     By  William  Clarke. . .  57 

E.  Fishing  in  New  England,  1624.     By  Captain  John  Smith 58 

F.  Advantages  of  American  Fisheries,  1790.    By  Thomas  Jejferson.  59 

III.  MANUFACTURING  INDUSTRIES 

A.  Colonial  Manufactures,  1732.     By  the  Lords  Commissioners  for 

Trade  and  Plantations 60 

B.  Few  Manufactures  in  New  York,  1732.    By  Governor  W.  Cosby. .  65 

C.  Manufactures  in  New  York,  1767.     By  Governor  H.  Moore 66 

D.  Domestic   Manufacturing  in  New  England,  1761.     By  Edmund 

Burke 68 

TRADE 

I.  TRADE  BETWEEN  ENGLAND  AND  THE  BRITISH  COLONIES  IN  AMERICA 

An  Early  View  of  Colonial  Trade,  1729.     By  Joshua  Gee 69 

II.  NEW  ENGLAND 

A.  Commerce  of  New  England,  1748.     By  Peter  Kalm 71 

B.  Carrying  Trade  of  New  England,  1761.     By  Edmund  Burke 71 

C.  Exports   of  New  England,  1763.     By   the   author   of  American 

Husbandry 73 

III.   MIDDLE  COLONIES 

A.  Foreign  Trade  of  New  York,  1748.     By  Peter  Kalm 74 

B.  Exports  of  New  York  and  Pennsylvania,  1763-1766.    By  the  author 

of  American  Husbandry 77 


CONTENTS  xi 

IV.   SOUTHERN  COLONIES 

A.  Report  on  Virginia,  1671.     By  Governor  William  Berkeley 78 

B.  Exports  of  the  Southern  Colonies,  1763.     By  the  author  of  American 

Husbandry 80 


CHAPTER  III 

LABOR,  EXCHANGE,   AND  POPULATION,   1607-1763 
LABOR 

I.  SCARCITY  OF  LABOR 

A.  High  Wages  in  Pennsylvania,  1698.     By  Gabriel  Thomas 82 

B.  High  Wages  in  New  England,  1775.     By  the  author  of  American 

Husbandry 83 

II.  INDENTED  SERVANTS 

A.  Servants  and  Slaves  in  America,  1748.     By  Peter  Kalm 84 

B.  Work  of  a  Servant  in  Virginia,  1656.     By  John  Hammond 87 

C.  Servants   in   Pennsylvania,    1775.     By  the   author   of  American 

Husbandry 88 

III.  SLAVE  LABOR 

A.  The  Slave  Trade  to  Virginia,  1708.     By  Colonel  E.  Jenings 89 

B.  Request  of  a  Missionary  for  Slaves,  1716.     By  John  Urmstone.  .  .       91 

C.  Objections  to  the  Prohibition  of  Rum  and  Slaves  in  Georgia,  1738. 

By  Pat.  Tailfer  and  others 92 

D.  Answer  of  the  Trustees,  1739.    By  the  Trustees  of  the  Colony  of 

Georgia 94 

E.  Unprofitableness  of  Slavery,  1774.     By  Philip  V.  Fithian 95 

EXCHANGE 

I.   COMMODITY  MONEY 

A.  Commodity  Money  in  North  Carolina,  1749.  By  Governor  Johnston      96 

B.  Tobacco  Notes  in  Virginia,  1781.    By  the  Marquis  de  Chastellux ....       97 

II.   CREDIT  MONEY 

A.  A  Defence  of  Paper  Money  by  a  Colonial  Governor,  1724.     By 

Governor  W.  Burnet 98 

B.  The  Land  Bank  and  the  Extension  of  the  Bubble  Act  to  the  Colonies, 

1741.     By  Governor  Thomas  Hutchinson 100 

C.  The  Necessity  of  Paper  Money  in  the  Colonies,  1764.    By  Thomas 

Pownall 104 

III.  RETAIL  TRADE 

Market  at  Philadelphia,  1748.     By  Peter  Kalm 105 

POPULATION 

I.  GROWTH  OF  THE  POPULATION 

A.  The  Increase  of  Mankind,  1755.    By  Benjamin  Franklin 106 

B.  Population  of  the  British  American  Colonies,  1752-1755 '.    By  the 

Lords  Commissioners  for  Trade  and  Plantations 108 

C.  Large  Families  in  America,  1748.    By  Peter  Kalm 109 


xii  CONTENTS 

II.   CONDITION  OF  THE  PEOPLE 

A.  A  prosperous  People,  1775.     By  the  author  of  American  Hus- 

bandry        no 

B.  The  People  of  New  York,  1759.    By  Andrew  Burnaby 112 

C.  An  Adverse  View  of  the  Virginians,  1759.     By  Andrew  Burnaby     113 

CHAPTER  IV 
ENGLISH  COLONIAL  THEORY  AND  POLICY,  1651-1763 

I.  THE  MERCANTILE  SYSTEM 

A  Modern  Interpretation,  1882.     By  Professor  Gustav  Schmoller 115 

II.  THE  ENGLISH  COLONIAL  POLICY 

A.  The  Navigation  Act  of  1660.    From  Statutes  of  the  Realm 118 

B.  The  Navigation  Act  of  1663.    From  Statutes  of  the  Realm 120 

C.  The  English  Colonial  System:  a  Favorable  View,  1688.     By  Sir 

Josiah  Child 121 

D.  The  English  Colonial  System:  an  Unfavorable  View,  1776.     By 

Adam  Smith 123 

III.  WORKINGS  OF  THE  COLONIAL  POLICY  IN  ENGLAND 

A.  Balance  of  Trade  Theory,  1630.    By  Thomas  Mun 128 

B.  The  Purpose  of  the  Navigation  Acts,  1764.     By  Thomas  Pownall. .     129 

C.  Advantage  to  England  of  Colonial  Shipping,  1740.     By  John 

Ashley 130 

D.  The  Colonies  a  Source  of  Raw  Materials,  1775.    By  the  author  of 

American  Husbandry 131 

E.  The  Colonies  as  a  Market  for  British  Manufactures,  1755.     By 

William  Clarke 132 

F.  Trade  between  England  and  her  North  American  Colonies,  1700- 

1780.     By  Lord  John  Sheffield 133 

IV.  WORKINGS  OF  THE  COLONIAL  POLICY  IN  THE  COLONIES 

A.  Arguments  for  and  against  the  Molasses  Act,  1731.     By  Adam 

A  nderson 134 

B.  Ineffectiveness  of  the  Molasses  Act,  1740.    By  John  Ashley 136 

C.  Smuggling  in  the  Colonies,  1757.    By  Sir  Charles  Hardy 137 

D.  An  Act  to  Prevent  Iron  Manufactures  in  the  Colonies,  1719.    By 

Adam  Anderson 139 

E.  Colonies  Levy  Tariff  Duties  on  British  Goods,  1718.    From  Acts  of 

the  Privy  Council 140 

F.  Tobacco  Growing  Suppressed  in  England,  1619-1670.    From  Acts 

of  the  Privy  Council 141 

G.  Bounties  on  Colonial  Produce,  1764.     By  David  Macpherson. . .      142 

CHAPTER  V 
ECONOMIC  CAUSES  AND  CONDUCT  OF  THE  REVOLUTION,  1764-1783 

I.  ECONOMIC  CAUSES  OF  THE  REVOLUTION 

A.  Fear  of  French  Kept  Colonies  Loyal,  1748.    By  Peter  Kalm 143 

B.  Prohibition  of  Western  Expansion,   1763-1772.     By  the  Privy 

Council 144 


CONTENTS  xiii 

C.  The  Prohibition  of  Colonial  Paper  Money,  1764.        By  Benjamin 

Franklin 146 

D.  Remonstrance  of  New  York  Assembly  against  Prohibition  of  Paper 

Money,  1775.     From  Hansard's  History  of  England 147 

E.  The    Enforcement    of   the    Navigation    Acts,    1764.      By    Adam 

Anderson . .  .  .  •. 148 

F.  The  Sugar  Act  of  1764.     By  Governor  Francis  Bernard 152 

G.  Grievances  of  the  Colonists,  1764.     By  Thomas  Pownall 153 

H.   Opposition  to  Acts  of  Trade,  1775.     By  John  Adams 155 

I.    Testimony  on  the  Stamp  Act,  1765.     By  Benjamin  Franklin 155 

J.   Causes  of  American  Discontent  before  1768.    By  Benjamin  Franklin  159 

K.   Opposition  to  Tax  on  Tea  due  to  Smugglers,  1770.    By  John  Adams  161 

L.  Defence  of  the  Navigation  Acts,  1769.     By  Sir  George  Grenvillle  162 

M.  Causes  of  the  Revolution,  1776.     By  Dean  Josiah  Tucker 164 

II.  NON-IMPORTATION  AS  A  MEANS  OF  PRESSURE 

A.  Unfavorable  Balance  of  Trade  of  the  Northern  American  Colonies, 

1700-1773.    By  Lord  John  Sheffield 166 

B.  Non-importation  Agreements  in  Boston  and  New  York,  1768.    From 

Anderson's  Origin  of  Commerce 167 

C.  Effect  in  England  of  the  Stamp  Act,  1765.    By  Adam  Smith 169 

D.  Non-importation  in  North  Carolina,  1774.     By  the  Freeholders  in 

Rowan  County 169 

E.  Petition  of London  Merchants  for  Reconciliation,  1775.    From  Han- 

sard's History  of  England 1 70 

F.  Petition  of  West  India  Planters  for  Reconciliation,  1775.     From 

Hansard's  History  of  England 173 

III.  CONTINENTAL  PAPER  MONEY 

A.  Continental  Paper  Money,  1775-1780.    By  Benjamin  Franklin.  ..     175 

B.  Depreciation  of  Continental  Paper  Money,  1775-1779.    By  Thomas 

Jefferson 176 

C.  Effects    of   Continental    Paper    Money,    1775-1780.      By    David 

Ramsay 178 

D.  Issues  of  Paper  Money  in  the  States,  1781-1788.    By  Brissot  de 

Wanille 1 79 

IV.  SOCIAL  EFFECTS  OF  THE  REVOLUTION 

Views  of  a  Contemporary,  1775-1783.    By  David  Ramsay 181 


CHAPTER  VI 
AMERICAN  COMMERCE  AND  COMMERCIAL  POLICY,  1783-1812 

I.   EFFORTS  TO  SECURE  A  COMMERCIAL  TREATY  WITH  ENGLAND 

A.  England  should  not  make  a  Commercial  Treaty  with  the  United 

States,  1783.     By  Lord  John  Sheffield 185 

B.  Why  England  would  not  make  a  Commercial  Treaty,  1785.    By  the 

Duke  of  Dorset 187 


xiv  CONTENTS 

C.  British  Merchants  sure  of  the  American  Market,  1776.    By  Dean 

Josiah  Tucker 188 

D.  Advantages  of  the  English  Market  to  Americans,  1783.    By  Lord 

John  Sheffield 189 

E.  Trade  between  England  and  the  United  States,  1784-1790.     By 

Timothy  Pitkin 191 

n.  EFFECTS  OF  THE  FAILURE  TO  NEGOTIATE  A  COMMERCIAL  TREATY 

A.  Trade  between  the  West  Indies  and  North  America  before  1774.    By 

Bryan  Edwards 192 

B.  The  West  Indies  should  not  be  Opened  to  American  Trade,  1783. 

By  Lord  John  Sheffield 193 

C.  American  Vessels  should  be  Admitted  to  Trade  with  the  West  Indies, 

1784.    By  William  Bingham 193 

D.  Effects  of  the  Prohibition  of  Trade  between  the  West  Indies  and  the 

United  States,  1780-1787.    By  Bryan  Edwards 194 

III.  ECONOMIC  REASONS  FOR  THE  CONSTITUTION 

A.  Commercial  Difficulties  Led  to  Constitution,  1783-1789.    By  Adam 

Seybert 197 

B.  Economic  Reasons  in  Favor  of  the  Constitution,  1787.   By  Alexander 

Hamilton 199 

IV.  EXPANSION  OF  AMERICAN  COMMERCE 

A.  Commerce  more  profitable  than  Manufactures,  1787.    By  Brissot 

de  Warville 200 

B    The  Trade  with  the  Orient,  1784-1800.    By  Timothy  Pitkin 202 

C.  The  Coasting  Trade,  1791.    By  Tench  Coxe 203 

D.  Shipbuilding  in  the  United  States,  1783-1789.    By  Phineas  Bond .  .  204 

E.  Comparative  Cost  of  American  and  French  Ships,  1791.     By  Tench 

Coxe 205 

F.  Comparative  Cost  of  Operation  of  American  and  English  Vessels, 

1805.    From  Report  of  British  Committee  of  Correspondence  on 
Trade 206 

G.  Foreign  Commerce,  1789-1807.     By  Adam  Seybert 206 

H.    Tonnage  in  Foreign  and  Coasting  Trade,  1789-1815.     By  Timothy 

Pitkin 208 

V.  INTERFERENCE  WITH  THE  NEUTRAL  TRADE 

A.  Growth  of  the  Neutral  Trade,  1791-1816.    By  Timothy  Pitkin ....     208 

B.  Frauds  of  the  Neutral  Flags,  1805.    By  James  Stephen 209 

C.  British  Orders  in  Council  and  French  Decrees,  1803-1808.    By  the 

Senate  Committee  on  Negotiations  with  Great  Britain 211 

D.  Effect  of  the  Embargo  on  New  York  City,  1807.   By  John  Lambert. .     214 

E.  War  of  1812.    By  the  House  Committee  on  Foreign  Relations 217 


CONTENTS  XV 

CHAPTER  VII 
AGRICULTURE,  SLAVERY,  AND  INTERNAL   TRADE,   1783-1808 

I.  AGRICULTURE  IN  THE  NORTH 

A.   Effect  of  the  Revolution  on  Agriculture,  1783-1789.     By  Phineas 

Bond 219 

•B.   Agriculture  in  the  United  States,  1792.    By  Tench  Coxe 220 

II.  AGRICULTURE  IN  THE  SOUTH 

A.  Agriculture  in  Virginia,  1787.    By  George  Washington 221 

B.  Farming  in  Maryland  and  Virginia,  1788.  By  Brissot  de  Warville. .  222 

C.  Care  of  Live  Stock,  1794.    By  George  Washington 223 

D.  History  of  Cotton  Growing,  1775-1795.    By  David  Ramsay 224 

E.  Invention  of  the  Cotton  Gin,  1793.    By  Eli  Whitney 225 

F.  Ejfect  of  the  Cotton  Gin  upon  Export  of  Cotton,  1791-1811.     By 

Adam  Seybert 227 

G.  Agriculture  in  the  Carolinas  and  Georgia,  1802.    By  F.  A.  Michaux  228 

III.  SLAVERY 

A.  Poor  Whites  and  Slaves  in  Virginia,  1780.     By  the  Marquis  de 

Chastellux 229 

B.  Decline  of  Slavery,  1788.    By  Brissot  de  Warville 231 

C.  Slavery  in  the  South,  1795.    By  Isaac  Weld,  Junior 232 

IV.  PIONEERING  AND  AGRICULTURE  IN  THE  WEST 

A.  Land  the  Lodestone  to  the  West,  1772-1774.    By  Jos.  Doddridge. . .  234 

B.  Pioneering  in  Kentucky,  1780-1790.    By  G.  Imlay 234 

C.  Live-stock  Farming  in  Ohio,  1806.    By  Thomas  Ashe 236 

V.  PUBLIC  LANDS 

A.  Democratic  Land  Holding,  1795.    By  Isaac  Weld,  Junior 237 

B.  Speculation  in  Public  Lands,  1806.    By  Thomas  Ashe 237 

C.  Sale  of  Public  Lands,  1796-1816.    By  Timothy  Pitkin 239 

VI.  INTERNAL  TRADE  AND  TRANSPORTATION 

A.  By  Stage  from  Boston  to  Savannah.  1802.    By  F.  A.  Michaux ....  240 

B.  Traveling  by  Wagon,  1806.    By  John  Lambert 240 

C.  Bad  Roads  in  1810.    By  Margaret  Van  Horn  Du'ight 241 

D.  Traveling  from  the  East  to  Kentucky,  1793.    By  G.  Imlay 241 

E.  Trade  down  the  Mississippi  River,  1795.    By  Isaac  Weld,  Junior ..  244 

F.  Trade  along  the  Western  Rivers,  1802.    By  F.  A.  Michaux 244 

G.  Trade  at  Pittsburg,  1803.    By  T.  M.  Harris 246 

H.   Character  of  Western  Trade,  1806.    By  Thomas  Ashe 246 

I.    The  Peddler  as  a  Distributor  of  Goods,  1797.    By  Timothy  Dunght .  .  249 

J.    The  Invention  of  the  Steamboat,  1807.    By  Robert  Fulton 250 


xvi  CONTENTS 


CHAPTER  VIII 

INTRODUCTION   OF   MANUFACTURES   AND   CONDITION    OF  THE 
PEOPLE,  1775-1816 

I.  MANUFACTURES 

A.  Little  Manufacturing  for  Sale,  1775.    By  the  author  of  American 

Husbandry 252 

B.  Obstacles  to  Manufactures,  1776.    By  Dean  Josiah  Tucker 252 

C.  Manufactures  after  the  Revolution,  1788.    By  Brissot  deWarmlle.  .  .  253 

D.  Manufactures  before  1789.    By  Phineas  Bond 255 

E.  A  Petition  for  Protection,  1789.    From  Annals  of  Congress 256 

F.  Report  on  Manufactures,  1791.    By  Alexander  Hamilton 257 

G.  Progress  of  Manufactures,  1793.    By  Tench  Coxe 266 

H.   Decline  of  Manufactures,  1795.    By  W.  Winterbotham 267 

I.   Domestic  Manufactures  in  the  Back   Country,   1807.     By  John 

Lambert 268 

II.   CONDITION  OF  THE  PEOPLE 

A.  American  Characteristics,  1816.    By  John  Bristed 268 

B.  Wages  and  Cost  of  Living,  1802.    By  F.  A.  Michaux 271 

C.  Unwholesome  Dietary,  1797.    By  C.  F.  Volney 272 

D.  Intemperance,  1802.    By  F.  A.  Michaux 272 

E.  Education,  1816.    By  D.  B.  Warden 273 

F.  Post-offices  and  Rates,  1791-1816.    By  A.  Seybert 274 


CHAPTER  DC 
THE  DEVELOPMENT  OF  MANUFACTURES,   1800-1860 

I.   GENERAL  VIEW  OF  MANUFACTURES,  1810-1860 

A.  Gallatin's  Report  on  Manufactures,  1810.     From  American  State 

Papers 276 

B.  Leading  Manufactures  in  184.0.   From  Sixth  Census 282 

C.  View  of  Manufactures  in  1860.     From  Eighth  Census 282 

II.  PROGRESS  OF  COTTON  MANUFACTURES,  1806-1860 

A.  Cotton  Manufactures  in  Massachusetts,  1806.    By  John  Melish  ....      285 

B.  State  of  Cotton  Manufactures  in  1816.     From  Annals  of  Congress     286 

C.  Historical  Sketch  of  Cotton  Manufactures  before  1831.    By  Thomas 

P.  Kettell 287 

D.  A  View  of  Cotton  Manufactures  in  1860.   From  Eighth  Census 291 

III.  THE  WOOLEN  INDUSTRY,  1811-1860 

A.  Woolen  Cloth  for  Army  Uniforms,  181 i.     From  Niles' Register ..  293 

B.  Early  Agitation  for  Sheep  Raising,  1811.     From  Niles'  Register. .  293 

C.  Stateof  the  Woolen  Industry  in  1816.    From  Annals  of  Congress ...  294 

D.  The  Woolen  Industry  in  1860.    From  Eighth  Census 295 


CONTENTS  xvii 

IV.  DEVELOPMENT  OF  THE  IRON  AND  STEEL  INDUSTRY. 

View  in  1860.    From  Eighth  Census 297 

V.  THE  LEATHER  INDUSTRY 

Development  during  the  Decade  1850-1860.    From  Eighth  Census  .  .  .      300 
VI.   THE  BOSTON  SHOE  TRADE 

Extent  and   Value  of  Shipments  in  i8jo.     From  Hunt's  Merchants' 

Magazine 302 

VII.  MISCELLANEOUS  MANUFACTURES 

Extent,  Variety,  and  Value  in  1860.     From  Eighth  Census 303 

CHAPTER  X 

THE   TARIFF,   1808-1860 

I.  ENCOURAGEMENT  TO  MANUFACTURES 

Gallatin's  Plans,  1810.    From  American  State  Papers 309 

II.  NEED  OF  PROTECTION 

Recommendation  of  President  Madison,  1815.    By  James  Madison..  .  .     310 

III.  ARGUMENTS  FOR  A  PROTECTIVE  TARIFF 

Views  of  Congress,  1816.    From  Annals  of  Congress 311 

IV.  THE  TARIFF  CONTROVERSY  OF  1824 

A.  The  "American  System."    By  Henry  Clay 313 

B.  A  New  Englander's  Views  on  Protection.    By  Daniel  Webster 316 

C.  A  Southern  View  on  the  Tariff.    By  George  McDuffie 320 

V.  FREE  TRADE  ARGUMENTS 

Memorial  on  Free  Trade,  1831.    By  Albert  Gallatin 321 

VI.  THE  TARIFF  AND  SECTIONALISM 

A  View  of  the  Situation,  1824-1833.    By  Thomas  H.  Benton 323 

VII.   A  TEMPORARY  ADJUSTMENT  OF  CONFLICTING  INTERESTS 

The  Compromise  Tariff  of  1833.    By  Henry  Clay 326 

VIII.   REACTION  FROM  PROTECTION 

Arguments  for  Lower  Duties  on  Imports,  1845.     By  Robert  J  .Walker     327 
IX.  ARGUMENTS  FOR  PROTECTION 

The  Case  Stated,  1840.    By  Henry  C.  Carey 333 

CHAPTER  XI 
THE  WESTWARD  MOVEMENT,   1817-1860 

I.  THE  EFFECT  ON  THE  PEOPLE  OF  TERRITORIAL  EXPANSION 

An  Explanation  of  American  Characteristic1;,  1843.    From  Hunt's  Mer- 
chants' Magazine 338 

II.  ADVICE  TO  EMIGRANTS 

A.   Foreign   Immigration  and  the   Westward   Movement,   1816.     By 

John  Melish 342 


xviii  CONTENTS 

B.  Opportunities  in  the  West,  1817.    By  Morris  Birkbeck 347 

C.  Routes  to  the  West,  1837.    By  J.  M.  Peck 349 

D.  Modes  of  Traveling,  1818.    By  H.  B.  Fearon 350 

III.  MOVING  WESTWARD 

A.  Down  the  Ohio  River,  1820.    By  James  Hall 352 

B.  Travel  by  Land,  1817.    By  Morris  Birkbeck 352 

C.  Spirit  of  the  Emigrant,  1820.    By  James  Hall 353 

D.  On  the  National  Road,  1840.   By  J.  S.  Buckingham 355 

IV.  FRONTIER  CLASSES  or  POPULATION 

The  Restlessness  of  the  Frontiersman,  1837.    By  J.  M.  Peck 356 

V.  ACTIVITIES  OF  THE  WESTERN  COUNTRY 

Manufactures  and  Agriculture,  1832.    By  Timothy  Flint 357 

VI.  IN  THE  NEW  COUNTRY 

A.  Locating  and  Building  a  Home,  1832.    By  Timothy  Flint 360 

B.  Effect  of  the  New  Home  on  the  Character  of  the  Emigrant,  1832.    By 

Timothy  Flint 366 

VII.  STAGES  OF  SETTLEMENT 

The  Frontier  Line,  1830,  184.0,  1850,  1860.     From  Tenth  Census  . .     369 

CHAPTER  XII 

INLAND  COMMERCE  AND  INTERNAL  IMPROVEMENTS,   1816-1860 
I.   STAGE  COACH  TRAVEL 

A.  Traveling  by  Stage  Coach  in  Virginia,  1835.     By  C.  A.  Murray     376 

B.  Plight  of  a  Traveler  in  the  South,  1835.     By  Harriet  Martineau.  .      377 

n.  EARLY  NAVIGATION  OF  THE  WESTERN  RIVERS 

Primitive  Methods,  1832.    By  Timothy  Flint 379 

III.  EFFECTS  OF  THE  STEAMBOAT  ON  INLAND  COMMERCE 

Changes  in  Rates  and  Speed,  1816-1856.     By  Thomas  P .  Kettell 381 

IV.  FEDERAL  AID  FOR  INTERNAL  IMPROVEMENTS 

A.  Internal  Improvements  and  the  National  Defense,  i8ip.    By  John 

C.  Calhoun 385 

B.  Veto  of  the  Maysville  Road  Bill,  1830.    By  Andrew  Jackson 388 

V.   EFFECTS  OF  THE  ERIE  CANAL 

Development  of  Internal  Improvements  in  the  West,  1825-1850.    By  H. 

V.  Poor 390 

VI.   EARLY  DEVELOPMENT  OF  RAILROADS 

Location  and  Construction,  1826-1850.   By  Thomas  P.  Kettell 393 

VII.   RAILROADS  versus  CANALS 

A.   Arguments  for  Railroads  in  1832.    From  Congressional  Committee 

Report 396 


CONTENTS  xix 

B.  Arguments  for  Canals  in  1830.     From  Congressional  Committee 

Report 400 

C.  Canals  and  Railroads  —  Rates  and  Expense  of  Maintenance,  1835. 

From  Assembly  (N.  F.)  Documents 401 

VIII.   PROGRESS  AND  DEVELOPMENT  OF  RAILROADS 

During  the  Decade,  1850-1860.    From  Eighth  Census 404 

IX.  INLAND  WATER  COMMERCE 

Development,  1816-1852.    By  Israel  D.  Andrews 406 

CHAPTER   XIII 
FOREIGN  COMMERCE,   1800-1860 

I.   FOREIGN  COMMERCE  PRIOR  TO  1860 

A.  Character  and  Extent  of  Foreign  Commerce,  1800-1860.    By  Thomas 

P.  Kettell 413 

B.  Commerce  and  Legislation,  1806-1854.     By  J.  S.  Homans 418 

II.   FOREIGN  COMMERCE  or  THE  NORTH  AND  SOUTH  COMPARED 

A.   Predominance  of  the  South  in  the  Export  Trade,  1800-1850.     By 

Ezra  C.  Seaman 421 

•  B.  Small  Import  Trade  of  the  South  in  1855.    By  Thomas  H.Benton. .     422 

III.  MOVEMENT  OF  FOREIGN  COMMERCE 

Balance  of  Trade,  1821-1850.    By  Ezra  C.  Seaman 424 

IV.  OCEAN  STEAM  NAVIGATION 

Development   between    1818   and   1840.        From    Hunt's   Merchants1 

Magazine 427 

V.  THE  CARRYING  TRADE 

The  Use  of  American  and  Foreign  Vessels,  1821-1860.    From  Report 

of  Commissioner  of  Navigation 432 

VI.  THE  FOREIGN  COMMERCE  OF  IMPORTANT  PORTS 

A.  Foreign  Commerce  of  the  City  of  New  York  in  1859.    From  Annual 

Report  of  the  Chamber  of  Commerce 433 

B.  Foreign  Trade  of  Boston  from  1845  to  1859.    From  Annual  Report 

of  the  Boston  Board  of  Trade 435 

C.  A  View  of  the  New  Orleans  Levee  in  1830.      By  J.  S.  Buckingham    436 

VII.  IMPORTANT  EXPORT  CROPS 

A.  Exportation  of  Cotton  for  Various  Years  from  1821  to  1860.    From 

Treasury  Report 438 

B.  American  Wheat  and  the  World  Crop  1846-1860.     From  Hunt's 

Merchants'  Magazine 438 

C.  Exportation  of  Indian  Corn,  1820-1860.  By  Charles  L.  Flint 442 


xx  CONTENTS 

CHAPTER  XIV 
PUBLIC  LANDS  AND  AGRICULTURE,   1820-1860 

I.  THE  PUBLIC  DOMAIN 

Extent  and  Importance,  1832.    By  Henry  Clay 446 

II.  THE  PUBLIC  LANDS  AND  WAGES 

A.  Secretary  Walker  on  the  Public  Lands,   1845.     From   Treasury 

Report 455 

B.  Ease  of  Acquisition  of  Public  Lands  in  1832.     From  American 

Quarterly  Review 457 

III.  SPECULATION  IN  PUBLIC  LANDS 

A.  Land  Speculation,  1840.    By  Richard  Hildreth 458 

B.  A  View  of  Western  Speculation  before  the  Civil  War.     By  D.  W. 

Mitchell 450 

C.  Early  Land  Speculation  in  Illinois,  1830-1840.    By  Thomas  Ford    461 

D.  Land  Speculation  in  Chicago  in  1835.    By  Harriet  Martineau ....     462 

IV.  ENGLISH  AND  AMERICAN  AGRICULTURE  COMPARED 

Superiority  of  American  Agriculture,  1833.    By  Patrick  Shirreff 464 

V.  AGRICULTURAL  EDUCATION  AND  MACHINERY 

Improvements  before  1860.    From  Report  of  Commission  of  Agriculture    467 
VI.  VIEWS  ON  AGRICULTURE 

A.  Southern  and  Northern  Agriculture  Compared,  1840,  1850,  1860. 

From  Hunt's  Merchants'  Magazine 476 

B.  Agriculture  about  1860.     From  Bacon's  Handbook  of  America 480 


CHAPTER  XV 
CURRENCY,  BANKING,  AND  STATE  DEBTS,  1791-1860 

I.  THE  FIRST  UNITED  STATES  BANK 

A.  Hamilton's  Views  on  the  Bank,  1790.     By  Alexander 'Hamilton.  ...     485 

B.  Public  and  Private  Finances  after  the  Dissolution  of  the  Bank,  1812- 

1815.     By  Richard  Hildreth 490 

II.   SECOND  UNITED  STATES  BANK 

A.  Necessity  of  a  United  States  Bank  after  the  War  of  1812.    From 

Legislative  and  Documentary  History  of  the  Bank  of  the  United 
States 493 

B.  President  Jackson's  Veto  of  the  Bank  Bill  in  1832.     By  Andrew 

Jackson 496 

III.  THE  PANIC  OF  1837  AND  ITS  EFFECTS 

A.  President  Van  Biiren  on  the  Panic  of  1837.    By  Martin  Van  Buren     499 

B.  Effects  of  the  Panic  on  Banking,  1837-1839.    By  Richard  Hildreth ..     501 

C.  Arguments  for  an  Independent    Treasury    and  "Hard  Money," 

1845.    By  Robert  J.  Walker 503 


CONTENTS  xxi 

IV.   SYSTEMS  OF  BANKING  IN  THE  UNITED  STATES  BEFORE  1860 

A.  Early  State  Banking  in  the  West  1821-1831.    By  Thomas  Ford 507 

B.  Banking  in  New  York  and  Massachusetts,  1813-1860.    By  A.  S. 

Bolles 508 

C.  Conditions  of  Banking  in  1860.     From  Eighth  Census 512 

V.   CURRENCY  AND  COINAGE 

A.  Currencies  and  their  Movements,  1852.     By  Ezra  C.  Seaman.  .  .      516 

B.  Early  Coinage,  1791-1840.     From  Hunt's  Merchants'  Magazine.  .     520 

VI.  STATE  DEBTS 

Amount  and  Character  in  1852.     From  Report  of  Commissioner  of 

Patents 522 


CHAPTER  XVI 
POPULATION   AND   LABOR,    1820-1860 

I.   CONDITION  OF  THE  AMERICAN  LABORER 

A.  Prosperity  of  the  American  Laborer,  1836.     By  C.  A.  Murray .  .      524 

B.  Unfavorable  View  of  American  Labor,  1843.     From  Documentary 

History  of  American  Industrial  Society 525 

II.   IMPROVEMENT  IN  MANUFACTURES 

Labor-saving  Machinery  and  the  Demand  for  Labor,    1832.     From 

American  Quarterly  Review 528 

III.  THE  FACTORY  SYSTEM 

A.  Conditions  at  Waltham  and  Lynn,  1835.     By  Harriet  Martineau ...  529 

B.  Superiority  of  the  Operatives,  1833.    By  Patrick  Shirrejf 531 

C.  Home  Life  of  the  Mill  Operatives,  1854.    By  C.  R.  Weld 532 

D.  Hours  of  Labor,  1845.    From  Documentary  History  of  American 

Industrial  Society 534 

E.  An    Unfriendly    View,    1846.        From   Documentary   History   of 

American  Industrial  Society 535 

IV.  EXPERIMENTS  IN  COMMUNISM 

A.  The  Rappites,  1840.     By  J.  S.  Buckingham 537 

B.  The  Owenites  at  New  Harmony,  1830.    By  S.  A .  Ferrall 539 

C.  Description  of  a  Phalanx,  1849.     From  Documentary  History  of 

American  Industrial  Society 541 

V.   CHARACTER  OF  THE  PEOPLE  —  NORTH  AND  SOUTH 

The  Views  of  an  Englishman  with  Southern  Tendencies,  1860.     By 

D.  W.  Mitchell 542 

VI.  POPULATION 

Distribution  in  1860.     From  Eighth  Census 545 

VII.  IMMIGRATION 

Extent  and  Character,  1820-1860.     From  Eighth  Census 550 


xxii  CONTENTS 

CHAPTER  XVH 
SLAVERY  AND   THE  SOUTH,   1823-1860 

I.  THE  ECONOMICS  OF  SLAVE  LABOR 

A.  A  Philosophic  View  of  Slave  Labor,  1860.    By  J.  E.  Cairnes 559 

B.  Cheapness  of  Slave  Labor,  1852.    By  C.  F.  McCay 564 

C.  Radical  View  on  the  Efficiency  of  Slavery,  1860.     By  S.  M.  Wolfe  567 

D.  Cheapness  of  Free  Labor,  1823.    By  Adam  Hodgson 571 

E.  Heavy  Expense  of  Slave  Labor,  1839.    By  J.  S.  Buckingham 574 

F.  Radical  View  on  the  Inefficiency  of  Slave  Labor,  1860.    By  H.  R. 

Helper 576 

II.   SOUTHERN  AGRICULTURE 

An  Unfavorable  View,  1860.    From  Report  of  Commissioner  of  Patents     578 

III.  PLANTATION  MANAGEMENT 

A.  Instructions  of  a  Mississippi  Planter  to  his  Overseer,  1857.    From 

Documentary  History  of  American  Industrial  Society 582 

B.  Management  of  Slaves  on  a  Cotton  Plantation,  1852.     From  De 

Bow's  Industrial  Resources 585 

C.  Description  of  a  Southern  Rice  Plantation,  1839.     By  J.  S.  Buck- 

ingham       590 

D.  The  System  of  Task  Work,  1854.    By  F.  L.  Olmsted 592 

IV.  THE  INTERNAL  SLAVE  TRADE 

The  Movement  of  Slaves   toward   the  South,  1840-1860.     By  J.  E. 

Cairnes 595 


CHAPTER  XVIII 
DEVELOPMENT  OF  AGRICULTURE,  1860-1915 

I.  FOREIGN  TRADE  IN  AGRICULTURAL  PRODUCTS 

Extent  and  Character,  1878-1912.     From  Annual  Report  of  Depart- 
ment of  Agriculture 598 

II.  LAND  TENURE  IN  THE  UNITED  STATES 

A.  Land  Tenure  in  1880.    From  Tenth  Census 601 

B.  Farm  Tenancy  in  the  South,  1902.    From  Report  of  the  Industrial 

Commission 605 

III.  AGRICULTURE  AND  LABOR 

A.  Workers  in  Agriculture,  1850-1910.    Adapted  from  Census  Reports     608 

B.  Foreigners  in  American  Agriculture,  1899.    From  Report  of  Indus- 

trial Commission 608 

IV.  PROGRESS  IN  AGRICULTURE 

A.  Land   Values,   Equipment,   and  Number  of  Farms,   fSjo-ipoo. 

From  Twelfth  Census 613 


CONTENTS  xxiii 

B.  Importance  of  Irrigation,  1899.     From  Report  of  Industrial  Com- 

mission       622 

C.  Dry  Farming,  190 5.    From  Yearbook  of  Department  of  Agriculture    624 

V.  SOUTHERN  AGRICULTURE 

Tenancy,  Size  of  Farms  and  Character  of  Crops,  1850-1910.     From 

Thirteenth  Census 627 

VI.  FARMS  AND  FARM  PROPERTY  AXD  CROPS 

A.  General  View,  1010.    From  Thirteenth  Census 629 

B.  Distribution  of  Leading  Crops,  1909.    From  Thirteenth  Census.  .  .  .     636 

VII.  THE  PUBLIC  DOMAIN 

Extent    and    Character,    1898.      From    Yearbook    of   Department    of 

Agriculture 640 

CHAPTER  XIX 
COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION,    1860-191 5 

I.  INTERNAL  AND  FOREIGN  COMMERCE 

A.  Extent  and  Growth,  1830-1909.     From  Report  of  National  Con- 

servation Commission 644 

B.  Character  of  the  Internal  Trade,  1899.    From  Report  of  Industrial 

Commission 646 

II.  THE  MERCHANT  MARINE 

A.  American  and  Foreign  Vessels  in  the  Carrying  Trade  of  the  United 

States,  1860-1910.   From  Report  of  the  Commissioner  of  Naviga- 
tion       651 

B.  American    Vessels    Engaged    in    Commerce,    1860-1914.      From 

Statistical  A  bstract 652 

C.  President  McKinley  on  the  Merchant  Marine,  1899.     From  Rich- 

ardson's Messages  and  Papers  of  the  Presidents 653 

D.  A  Plea  for  Ship  Subsidy,  1901.     By  Theodore  Roosevelt 654 

III.  COMMERCE  ON  THE  GREAT  LAKES 

A.  Interlake  and  Local   Traffic,   1900.     From   Report  of  Industrial 

Commission 655 

B.  Recent  Development,  1890-1909.     From  Report  of  National  Con- 

servation Commission 657 

IV.  RAIL  AND  RTVER  TRAFFIC 

A.  Growth  of  Railroad  Systems  to  1900.     From  Report  of  Industrial 

Commission 659 

B.  Freight  Rates,  1 870-1 900.    From  Report  of  Industrial  Commission.  .  662 

C.  Decline  of  the  Mississippi  River  Trade  after  1860.  ByF.H.Dixon  667 

D.  The  Future  of  Rail  and  Water  Transportation.     By  James  J.  Hill  675 

V.  COMMUNICATION 

A.  Development   of  Telegraph  and   Telephone  Systems,   1844-1907. 

From  Special  Report  of  the  Census 680 

B.  The  Postal  System,  1 91 1.   From  Report  of  Postmaster  General 682 


xxiv  CONTENTS 

CHAPTER  XX 
FINANCIAL  HISTORY,  MONEY  AND  BANKING,  1860-1915 

I.  FINANCING  THE  WAR 

A.  Extent  and  Character  of  Government  Receipts  and  Expenditures, 

1860.     From  Treasury  Report 687 

B.  Money  Cost  of  the  Civil  War,  1869.     By  David  A.  Wells 689 

II.  THE  GREENBACKS 

A.  Quantity  and  Nature  of  the  Greenback  Issttes,  1864.    By  William  P. 

Fessenden 691 

B.  The  Greenback  Situation  as  seen  by  an  Englishman,  1865.     By 

Goldwin  Smith 693 

C.  Fluctuations    in   the    Value    of    Greenbacks,    1864-1878.     From 

Report  of  the  Comptroller  of  the  Currency 696 

D.  Resumption  of  Specie  Payments,  1879.     By  John  Sherman 696 

III.  THE  NATIONAL  BANKING  SYSTEM 

A.  Inadequacy  of  State  Banking,  1863.    By  John  Sherman 700 

B.  Superiority  of  the  National  Banking  System,  1868.    From  Bankers1 

Magazine 704 

C.  Development  of  Banking,  1879-1909.    By  George  E.  Barnett 707 

D.  Expected  Benefits  of  the  Federal  Reserve  Act,  1914.     By  John 

Skelton  Williams 709 

IV.  THE  SILVER  QUESTION 

A.  The  "Crime  of  '73."    By  John  P.  Jones 711 

B.  The  Coinage  Act  of  1873  Defended.    By  John  Sherman 714 

C.  Operation  of  the  Bland- Allison  Silver  Purchase  Act,     1878-1889. 

From  Treasury  Report 717 

D.  Effect  of  the  Sherman  Silver  Purchase  Act  on  the  Supply  of  Money, 

1893.     By  John  G.  Carlisle 719 

E.  A  Plea  for  the  Free  Coinage  of  Silver,  1896.    By  W.  J.  Bryan.  ...     722 

V.  THE  MONETARY  STOCK 

A.  The  Trade  Dollar,  1873-1878.    From  the  Commercial  and  Financial 

Chronicle 725 

B.  Kinds  and  Amounts  of  Money  in  Circulation,  1860-1893.     By 

John  G.  Carlisle 726 

VI.  PANICS  AND  CRISES 

A.  The  Panic  of  1873.    By  John  Jay  Knox 729 

B.  The  Financial  Crisis  of  1884.    By  Henry  W.  Cannon 732 

C.  The  Panic   of  1907.     From   Report   of  the   Comptroller   of  the 

Currency , 734 


CONTENTS  xxv 

CHAPTER  XXI 
MANUFACTURES,    TARIFF,   AND    TRUSTS,   1860-1915 

I.  MANUFACTURES 

A.  Conditions  of  Industrial  Progress,  1901.    From  Report  of  Industrial 

Commission 738 

B.  Growth  of  Manufactures,  1850-1880.  From  Tenth  Census 739 

C.  Manufactures,  1850-1910.    From  Thirteenth  Census 744 

D.  Rank  of  the  United  States  as  a  Manufacturer  of  Cotton,  1830-1905. 

From  Census  of  Manufactures 746 

E.  Cotton  Manufactures,  1860-1880.     From  Tenth  Census 749 

F.  Growth  of  the  Cotton  Manufactures,  1860-1910.     From  Thirteenth 

Census 750 

G.  Cotton  Manufactures   in  the  South,   1890-1900.     From    Twelfth 

Census 750 

H.    The  Iron  and  Steel  Industry,  1880.    From  Tenth  Census 752 

I.    The  Iron  and  Steel  Industry,  1870-1900.    From  Twelfth  Census. .  .     754 

II.  TARIFF 

A.  Tariff  Changes,  1860-1882.    By  E.  H.  Roberts 756 

B.  Reduction  of  the  Tariff  Urged,  1882.    By  the  Tariff  Commission. . .  757 

C.  Changes  in  the  Tariff,  1883-1897.    From  Senate  and  House  Reports .  758 

D.  Tariff  Act  of  1909.    From  Congressional  Record 763 

E.  Tariff  Act  of  1913.    By  the  Committee  of  Ways  and  Means 765 

III.  TRUSTS 

A.  The  Tendency  to  Consolidation,  1001.    From  Report  of  Industrial 

Commission 768 

B.  The  Causes   of  Consolidation,   1901.     By   the   Commissioner   of  ,. 

Corporations 771 

C.  Alleged  Advantages  of  Combination,  1897.    From  Report  of  Joint 

Committee  of  New  York  Legislature 772 

D.  Effects  of  Industrial  Combinations  upon  Prices  and  Wages,  icjoo. 

By  J.  W.  Jenks 774 

CHAPTER  XXII 
POPULATION  AND  LABOR,   1860-1915 

I.  POPULATION 

A.  Growth  of  Population,  1790-1910.    From  Thirteenth  Census 777 

B.  The  Increase  of  Population,  1900.    By  W.  F.  Willcox 777 

C.  The  Westward  Movement,  1880.    From  Tenth  Census 779 

D.  Growth  of  Cities,  1790-1880.    From  Tenth  Census 780 

E.  Urban  Concentration,  1880-1910.    From  Thirteenth  Census 781 

II.  IMMIGRATION 

A.   Immigration,   1882-1910.      From    Report  of  Immigration    Com- 
mission       783 


xxvi  CONTENTS 

B.  Immigration  Legislation,  1882-1910.     From  Report  of  Immigra- 
tion Commission 790 

III.  LABOR  CONDITIONS 

A.  General  Conditions  of  Labor,  1900.     From  Report  of  Industrial 

Commission 792 

B.  National  Labor  Organizations,  1901.    From  Report  of  Industrial 

Commission 798 

C.  Membership  of  Trade  Unions  in  the  United  States,  1901.    From 

Report  of  Industrial  Commission 800 

D.  Membership  of  American  Federation  of  Labor,  1897-1913.     By 

Samuel  Gompers 800 

E.  Labor  Legislation,  1903.     By  G.  A .  Weber 801 

F.  Workmen's  Compensation,  1913.     From  Report  of  United  States 

Bureau  of  Labor  Statistics 805 

G.  The  Federal  Compensation  Act,  1908.    From  Report  of  Department 

of  Commerce  and  Labor 806 

H.    Wages  and  Prices,  1870-1901.    From  Report  of  Industrial  Com- 
mission   808 

I.   Higher  Cost  of  Living,  1910.    From  Senate  Investigation  of  Wages 

and  Prices 810 

J.  A  Nation  at  Work,  1880.    From  Tenth  Census 811 

CHAPTER  XXIII 
ECONOMIC  PROGRESS,   1860-1915 

I.  WEALTH  OF  THE  PEOPLE  OF  THE  UNITED  STATES 

National  Wealth,  1850-1912.    From  Census  Bulletin 813 

II.  DISTRIBUTION  OF  WEALTH 

A.  Labor's  Share  in  the  Net  Product  of  Industry,  1850-1880.    From 

Report  Massachusetts  Bureau  of  Statistics  of  Labor 815 

B.  Profits  and  Wages,  1800-1000.     From  Report  of  Industrial  Com- 

mission       817 

C.  The  Growth  of  Large  Fortunes,  1915.    From  Report  of  Commission 

on  Industrial  Relations 820 

D.  Distribution  of  the  National  Income,  1850-1910.    By  W.I.  King.     822 

III.  How  THE  NATIONAL  WEALTH  is  EXPENDED 

A.  Advance  in  the  Standard  of  Living,  1910.    From  Report  of  Com- 

mission on  Cost  of  Living 827 

B.  How  Much  is  Enough?  1007.    By  Louise  B.  More 829 

C.  The  Needs  of  a  Self-supporting  Woman,  1914.     From  Report  of 

Minimum  Wage  Commission 831 

D.  Making  Ends  Meet,  1903.     By  the  Commissioner  of  Labor 832 

E.  Extravagance  and  Waste,  1010.     From  Report  of  Commission  on 

Cost  of  Living 834 

IV.  SAVING  AND  THRIFT 

A.  Savings  in  the  United  States,  1863-1913.     By  the  Comptroller  of 

the  Currency 838 

B.  Building  and  Loan  Associations,  1893.     By  the  Commissioner  of 

Labor 840 


CONTENTS  xxvil 

V.  SOCIAL  WELL-BEING 

A.  Improvement  of  Conditions  during  the  Nineteenth  Century,  1885. 

From  Report  Massachusetts  Bureau  of  Statistics  of  Labor 842 

B.  Condition  of  Workers,  1902.    By  A.  Mosely 846 

VI.  CONSERVATION 

A.  Conservation  of  Natural  Resources,  1909.    From  Report  of  National 

Conservation  Commission 848 

B.  National  Vitality:  its  Wastes  and  Conservation,  /pop.    From  Report 

of  National  Conservation  Commission 851 

INDEX 855 


Readings  in  the  Economic 
History  of  the   United   States 

CHAPTER  I 
EXPLORATION  AND    COLONIZATION,  1583-1774 

I.   METHODS  OF  PLANTING  A  COLONY 

A.    The  Cost  of  Colonizing,  1648  l 

The  actual  work  of  colonizing  America  was  undertaken  by  companies  chartered 
for  this  purpose  by  the  crown,  or  by  wealthy  individuals  on  their  own  account  who 
were  proprietors  of  the  lands  granted  them.  In  either  case  there  was  usually 
hope  and  expectation  of  a  financial  return  from  the  venture.  The  "adventurers" 
who  financed  the  schemes  generally  contributed  their  money  as  an  investment  or 
speculation.  In  this  description  of  the  new  country  there  are  shrewdly  intermingled 
directions  to  prospective  adventurers,  a  statement  of  the  terms  upon  which  colonists 
will  be  received,  and  an  optimistic  picture  of  the  returns  to  be  secured. 

Each  Adventurer  of  twenty  or  fifty  men  must  provide  household 
necessaries,  as  irons  and  chains  for  a  draw-bridge,  two  Mares  or 
Horses  to  bred  or  ride  on,  Pots,  Pans,  Dishes,  Iron  for  a  Cart  and 
Plow,  Chains,  Sithes,  and  Sickles,  Nets,  Lines,  and  Hooks.  A  sail 
for  a  fishing  Shallop  of  three  tun,  and  Hemp  to  employ  his  people  in 
making  them,  as  with  hair,  and  canvas  for  quilts,  as  well  on  ship- 
board as  demurring  at  the  sea  port,  as  with  locks,  keys,  bolts,  and 
glasse  casements  for  his  house.  And  generally  fit  Implements  for 
the  work  or  trade  he  intends. 

For  trade  with  the  Indians,  buy  Dutch  or  Welch  rugged  cloth, 
seven  quarters  broad,  a  violet  blew  or  red,  at  four  or  five  shillings  a 
yard,  small  hooks  and  fishing  lines,  Morris  bels,  Jewes-harps,  Combes, 
trading  knives,  Hatchets,  Axes,  Hoes,  they  will  bring  you  Venison. 


1  A  Description  of  the  Province  of  New  Albion.  And  a  Direction  for  Adventurers 
with  small  stock  to  get  two  for  one,  and  good  land  freely.  .  .  .  By  Beauchamp  Plan- 
taganet  (1648),  In  Force,  Tracts  and  Other  Papers  (Washington,  1838),  II,  no. 
vii,  31-35- 


2  READINGS  IN  ECONOMIC  HISTORY 

Turkeys,  and  Fowles,  Flesh,  &c.  for  a  pennyworth  of  corn  at  twelve 
pence  a  bushell. 

Provisions  for  each  man,  and  the  charge  from  London. 

1.  Canvas,  or   linnen   clothes,  Shooes,  Hats,  &c.  costing   here 
foure  pounds  for  two  men  to  buy  Cows,  Goats,  and  Hogs  in  Virginia, 
which  there  yeeld  sixe  pound,  and  will  buy  one  Cow,  and  Oxe,  two 
Goats  two  Sowes,  which  one  each  man  comes  to         2!.     o.  o. 

2.  Fraight  for  a  Passenger,  and  his  half  Tun  of   provisions  and 
Tooles.  il.   10.  o. 

3.  Victuals  till  his  own  stock  and  crop  maintain  him  for  seven 
moneths.  3 1.   10.  o. 

That  is,  Pease,  Oatmeal  and  Aquavite,  ys.  five  bushels  of  Meal, 
of  which  to  be  baked  into  Biskets,  and  five  bushels  of  Malt,  some 
must  be  ground  and  brewed  for  the  voyage,  both  1 1.  los.  a  hundred 
of  Beefe,  and  Pork,  1 1.  2  s.  two  bushels  of  roots,  2  s.  salt  fish,  2  s. 
Cask  to  carry  provision  5  s.  five  pound  of  Butter  2  s. 

4.  One  Hogshead  of  eares  of  Corn  Garden  seeds,  Hemp,  and 
linseed  with  husk  and  some  Rice  from  Virginia.  o.   16.  o. 

5.  Armes  (viz.}  a  Sword,  Calliver  five  foot  long,  or  long  Pistoll, 
Pikehead:    six  pound  of  powder,  ten  pound  of  shot,  halfe  an  old 
slight  Armour  that  is,  two  to  one  Armour  o.   19.  o. 

6.  Tools,  a  Spade,  Axe,  and  Shovell,  5  s.     Iron  and  Steel  to  make 
and  mend  more,  and  two  hundred  of  nails,  5  s.  o.   10.  o. 

7.  Guns  and  Powder  for  the  Fort,  that  is  to  every  fifty  foure 
Murtherers,***  a  barell  of  powder  4 1. 10  s.  that  is  to  each  man         5  s. 

8.  A  Bed  and  sheets  of  Canvas,  to  be  filled  with  Huls,  each  man 
a  Rug  155. 

Sum  totall,  lol.  5.  o. 

CHAP.  VI. 

Here  by  bringing  good  Labourers,  and  Tradesmen,  the  provident 
planters  may  doe  well  by  giving  shares  or  double  wages,  when  each 
man  may  earn  his  five,  nay  sixe  shillings  a  day  in  Tobacco,  Flaxe, 
Rice.  .  .  . 

Passage  and  diet  of  a  man,  his  bedding  and  chest  thither, 

5!.  o.  o. 

Bedding  will  cost  155.  drams,  fruit  and  spice  i.     o.  o. 

In  goods  to  buy  a  Cow,  and  stock  each  man  here          2.    o.  o. 

Arms,  Ammunition,  and  Tools,  each  man  2.    o.  o. 

Sum  Totall  10.     o.  o. 


EXPLORATION  AND  COLONIZATION  3 

All  Adventurers  of  500!.  to  bring  fifty  men  shall  have  5000  acres, 
and  a  manor  with  Royalties,  at  55.  rent,  and  whosoever  is  willing 
so  to  transport  himself  or  servant  at  lol.  a  man,  shall  for  each  man 
have  100  acres  freely  granted  forever,  and  at  [manuscript  illegible] 

may  be  instructed  how  in  a  moneth 

to  passe,  and  in  20  days  to  get  fit  servants  and  artificers  for  wages, 
diet,  and  clothes,  and  apprentices  according  to  the  3  Statutes  5  Eliz. 
All  which  after  5  years  service,  are  to  have  30  acres  of  free  land, 
and  some  stock,  and  bee  free-holders. 

B.   Articles  of  Agreement  of  Plymouth  Plantation,  1620^- 

In  the  "Articles  of  Agreement  of  Plymouth  Plantation"  we  have  a  good  illus- 
tration of  the  terms  upon  which  the  colonists  —  who  did  the  actual  work  of  set- 
tlement and  development  and  upon  whose  efforts  depended  the  financial  success 
of  the  venture — agreed  to  apply  their  time  and  labor  and  divide  the  profits.  In 
the  case  of  the  Plymouth  Company  the  capital  necessary  to  finance  the  under- 
taking was  to  be  furnished  by  the  adventurers  and  all  property  to  be  put  into  a 
common  stock  until  a  final  division  should  take  place. 

An0:    1620.    July  i. 

1.  The  adventurers  &  planters  doe  agree,  that  every  person  that 
goeth  being  aged  16.  years  &  upward,  be  rated  at  iofl.,  and  ten  pounds 
to  be  accounted  a  single  share. 

2.  That  he  that  goeth  in  person,  and  furnisheth  him  selfe  out  with 
iofl.  either  in  money  or  other  provissions,  be  accounted  as  haveing 
2ofl.  in  stock,  and  in  ye  devission  shall  receive  a  double  share. 

3.  The  persons  transported  &  ye  adventurers  shall  continue  their 
joynt  stock  &  partnership  togeather,  ye  space  of  7.  years,  (excepte 
some  unexpected  impedimente  doe  cause  ye  whole  company  to  agree 
otherwise,)  during  which  time,  all  profits  &  benifits  that  are  gott  by 
trade,  traffick,  trucking,  working,  fishing,  or  any  other  means  of 
any  person  or  persons,  remaine  still  in  ye  comone  stock  untill  ye 
division. 

4.  That  at  their  coming  ther,  they  chose  out  such  a  number  of 
fitt  persons,  as  may  furnish  their  ships  and  boats  for  fishing  upon  ye 
sea;   imploying  the  rest  in  their  severall  faculties  upon  ye  land;   as 
building  houses,  tilling,  and  planting  ye  ground,  &  makeing  shuch 
comodities  as  shall  be  most  usefull  for  ye  collonie. 

5.  That  at  ye  end  of  ye  7.  years,  ye  capitall  &  profits,  viz.  the  houses, 


1  William  Bradford,  History  of  the  Plimouth  Plantation,  from  the  original 
manuscript  (Boston,  1900),  pp.  56-58. 


4  READINGS  IN  ECONOMIC  HISTORY 

lands,  goods  and  chatles,  be  equally  devided  betwixte  ye  adventurers, 
and  planters;  wch  done,  every  man  shall  be  free  from  other  of  them 
of  any  debt  or  detrimente  concerning  this  adventure. 

6.  Whosoever  cometh  to  ye  colonie  herafter,  or  putteth  any  into 
ye  stock,  shall  at  the  ende  of  ye  7.  years  be  alowed  proportionally  to 
ye  time  of  his  so  doing. 

7.  He  that  shall  carie  his  wife  &  children,  or  servants,  shall  be 
alowed  for  everie  person  now  aged  16.  years  &  upward,  a  single  share 
in  ye  devision,  or  if  he  provid  them  necessaries,  a  duble  share,  or  if 
they  be  between  10.  year  old  and  16.,  then  2.  of  them  to  be  reconed 
for  a  person,  both  in  trasportation  and  devision. 

8.  That  such  children  as  now  goe,  &  are  under  ye  age  of  ten  years, 
have  noe  other  shar  hi  ye  devision,  but  50.  acers  of  unmanured  land. 

9.  That  such  persons  as  die  before  ye  7.  years  be  expired,  their 
executors  to  have  their  parte  or  sharr  at  ye  devision,  proportionably 
to  ye  time  of  their  life  in  ye  collonie. 

10.  That  all  such  persons  as  are  of  this  collonie,  are  to  have 
their  meate,  drink,  apparell,  and  all  provissions  out  of  ye  coinon 
stock  &  goods  of  ye  said  collonie. 

C.  Disadvantages  of  a  Common  Store,  1620 1 

The  plan  of  a  common  stock  did  not  work  any  better  in  the  Plymouth  Planta- 
tion than  it  had  in  Virginia,  but  resulted  in  waste  and  lack  of  industry.  In  the 
first  three  years  there  resulted  much  suffering,  which  Governor  Bradford  attributed 
to  this  community  of  goods  and  undertook  to  correct  by  allotting  to  each  man  a 
separate  plot  of  ground  for  his  own  use.  Bradford  was  the  first  governor  of 
Plymouth,  and  wrote  a  valuable  history  of  the  colony  during  the  first  twenty-five 
years  of  its  existence. 

Anno  Dom:  1623 

It  may  be  thought  strang  that  these  people  should  fall  to  these 
extremities  in  so  short  a  tune,  being  left  competently  provided  when 
ye  ship  left  them,  and  had  an  addition  by  that  moyetie  of  corn  that 
was  got  by  trade,  besids  much  they  gott  of  ye  Indans  wher  they  lived, 
by  one  means  &  other.  It  must  needs  be  their  great  disorder,  for  they 
spent  excessively  whilst  they  had,  or  could  get  it;  and,  it  may  be, 
wasted  parte  away  among  ye  Indeans  (for  he  y*  was  their  cheef  was 
taxed  by  some  amongst  them  for  keeping  Indean  women,  how  truly 
I  know  not).  And  after  they  begane  to  come  into  wants,  many  sould 
away  their  cloathes  and  bed  coverings;  others  (so  base  were  they) 


1  William    Bradford,   History  of    the   Plimouth  Plantation    (Boston,    1900), 
156-157,  162-164. 


EXPLORATION  AND  COLONIZATION,  5 

became  servants  to  ye  Indeans,  and  would  cutt  them  woode  &  fetch 
them  water,  for  a  cap  full  of  corne;  others  fell  to  plaine  stealing, 
both  night  &  day,  from  ye  Indeans,  of  which  they  greevosly  complained. 
In  ye  end,  they  came  to  that  misery,  that  some  starved  &  dyed  with 
could  &  hunger.  .  .  . 

All  this  whille  no  supply  was  heard  of,  neither  knew  they  when 
they  might  expecte  any.  So  they  begane  to  thinke  how  they  might 
raise  as  much  corne  as  they  could,  and  obtaine  a  beter  crope  then  they 
had  done,  that  they  might  not  still  thus  languish  in  miserie.  At 
length,  after  much  debate  of  things,  the  Govr  (with  ye  advice  of  ye 
cheefest  amongest  them)  gave  way  that  they  should  set  corne  every 
man  for  his  owne  perticuler,  and  in  that  regard  trust  to  them  selves; 
in  all  other  things  to  goe  on  in  ye  generall  way  as  before.  And  so 
assigned  to  every  family  a  parcell  of  land,  according  to  the  propor- 
tion of  their  number  for  that  end,  only  for  present  use  (but  made  no 
devission  for  inheritance),  and  ranged  all  boys  &  youth  under  some 
familie.  This  had  very  good  success ;  for  it  made  all  hands  very  indus- 
trious, so  as  much  more  corne  was  planted  then  other  waise  would 
have  bene  by  any  means  ye  Govr  or  any  other 'could  use,  and  saved 
'him  a  great  deall  of  trouble,  and  gave  farr  better  contente.  The 
women  now  wente  willingly  into  ye  feild,  and  tooke  their  litle-ons 
with  them  to  set  corne,  which  before  would  aledg  weaknes,  and 
inabilitie;  whom  to  have  compelled  would  have  bene  thought  great 
tiranie  and  oppression. 

The  experience  that  was  had  in  this  comone  course  and  condition, 
tried  sundrie  years,  and  that  amongst  godly  and  sober  men,  may  well 
evince  the  vanitie  of  that  conceite  of  Platos  &  other  ancients,  ap- 
plauded by  some  of  later  times;  —  that  ye  taking  away  of  propertie, 
and  bringing  in  comunitie  into  a  comone  wealth,  would  make  them 
happy  and  florishing;  as  if  they  were  wiser  then  God.  For  this 
comunitie  (so  farr  as  it  was)  was  found  to  breed  much  confusion  & 
discontent,  and  retard  much  imploymet  that  would  have  been  to 
their  benefite  and  conforte.  /For  ye  youn-men  that  were  most  able 
and  fitte  for  labour  &  service  did  repine  that  they  should  spend 
their  time  &  streingth  to  worke  for  other  mens  wives  and  children, 
without  any  recompence.  The  strong,  or  man  of  parts,  had  no  more 
in  devission  of  victails  &  cloaths,  then  he  that  was  weake  and  not 
able  to  doe  a  quarter  ye  other  could;  this  was  thought  injuestice. 
The  aged  and  graver  men  to  be  ranked  and  equalised  in  labours, 
and  victails,  cloaths,  &c.,  with  ye  meaner  &  yonger  sorte,  thought 
it  some  indignite  &  disrespect  unto  them.  And  for  mens  wives  to 


6  READINGS  IN  ECONOMIC  HISTORY 

be  commanded  to  doe  servise  for  other  men,  as  dresing  their  meate, 
washing  their  cloaths,  &c.,  they  deemd  it  a  kind  of  slaverie,  neither 
could  many  husbands  well  brooke  it./  Upon  ye  poynte  all  being  to 
have  alike,  and  all  to  doe  alike,  they  thought  them  selves  in  ye  like 
condition,  and  one  as  good  as  another;  and  so,  if  it  did  not  cut  of 
those  relations  that  God  hath  set  amongest  men,  yet  it  did  at  least 
much  diminish  and  take  of  yemutuall  respects  that  should  be  preserved 
amongst  them.  And  would  have  bene  worse  if  they  had  been  men  of 
another  condition.  Let  none  objecte  this  is  men's  corruption,  and 
nothing  to  ye  course  it  selfe.  I  answer,  seeing  all  men  have  this  cor- 
ruption in  them,  God  in  his  wisdome  saw  another  course  fiter  for  them. 

II.   SUGGESTIONS  TO  COLONISTS 

A.    The  Advantages  of  Colonies,  158^ 

Englishmen  were  slow  to  appreciate  the  advantages  that  would  accrue  to  their 
country  from  the  establishment  of  colonies  in  the  New  World.  But  some  of  the 
earlier  adventurers,  like  Drake,  Frobisher,  Gilbert,  and  Raleigh,  were  alive  to  the 
benefits  that  would  follow  from  the  planting  of  colonies  in  the  New  World,  and 
endeavored  to  persuade  the  government  to  take  active  measures  to  occupy  the 
lands  discovered  and  described  by  them.  In  the  following  extract  Sir  Humphrey 
Gilbert  enumerates  various  advantages  that  England  could  derive  from  colonies. 

.  .  .  the  fourth  chapter  sheweth  how  that  the  trade,  traffic  and 
planting  in  these  countries  is  likely  to  prove  very  profitable  and 
beneficial  generally  to  the  whole  realm.  It  is  very  certain  that  the 
greatest  jewel  of  this  realm  and  the  chieftest  strength  and  force  of 
the  same,  for  defence  or  offence  in  martial  matter  and  manner  is  the 
multitude  of  ships,  masters,  and  mariners  ready  to  assist  the  most 
stately  and  royal  navy  of  her  Majesty,  which  by  reason  of  this  voyage 
shall  have  both  increase  and  maintenance.  And  it  is  well  known 
that  in  sundry  places  of  this  realm  ships  have  been  built  and  set 
forth  of  late  days  for  the  trade  of  fishing  only;  yet,  notwithstanding, 
the  fish  which  is  taken  and  brought  into  England  by  the  English 
navy  of  fishermen  will  not  suffice  for  the  expense  of  this  realm  four 
months,  if  there  were  none  else  brought  of  strangers.  And  the 
chiefest  cause  why  our  English  men  do  not  go  so  far  westerly  as  the 
especial  fishing  places  do  lie,  both  for  plenty  and  greatness  of  fish, 


1  A  true  Report  of  the  late  Discoveries  and  Possession  Taken  in  the  Right  of 
the  Crown  of  England  of  the  Newfoundland.  By  Sir  Humphrey  Gilbert,  1583.  In 
The  Principal  Novigations  Voyages  Traffiques  &"  Discoveries  of  the  English  Nation. 
By  Richard  Hakluyt  (Glasgow,  1903),  III,  167-81. 


EXPLORATION  AND  COLONIZATION  7 

is  for  that  they  have  no  succour  and  known  safe  harbour  in  those  parts. 
But  if  our  nation  were  once  planted  there  or  thereabouts,  whereas 
they  now  fish  for  but  two  months  in  the  year,  they  might  then  fish 
for  so  long  as  pleased  themselves  .  .  .  which  being  brought  to  pass 
shall  increase  the  number  of  our  ships  and  mariners.  ... 

Moreover,  it  is  well  known  that  all  savages  .  .  .  will  take 
marvellous  delight  in  any  garment,  be  it  ever  so  simple,  as  a  shirt,  a 
blue,  a  yellow,  red,  or  green  cotton  cassock,  a  cap,  or  such  like,  and 
will  take  incredible  pains  for  such  a  trifle  .  .  .  which  being  so, 
what  vent  for  our  English  cloths  will  thereby  ensue,  and  how  great 
benefit  to  all  such  persons  and  artificers,  whose  names  are  quoted  in 
the  margin,  I  leave  to  such  as  are  discreet.  .  .  . 

To  what  end  need  I  endeavor  myself  by  arguments  to  prove  that 
by  this  voyage  our  navy  and  navigation  shall  be  enlarged,  when  as 
there  needeth  none  other  reason  than  the  manifest  and  late  example 
of  the  near  neighbors  to  this  realm,  the  Kings  of  Spain  and  Portugal, 
who,  since  the  first  discovery  of  the  Indies,  have  not  only  mightily  en- 
larged their  dominions,  greatly  enriched  themselves  and  their  subjects, 
but  have  also,  by  just  account,  trebled  the  number  of  their  ships,  mas- 
ters and  mariners,  a  matter  of  no  small  moment  and  importance? 

Besides  this,  it  will  prove  a  general  benefit  unto  our  country,  that, 
through  this  occasion,  not  only  a  great  number  of  men  which  do  live 
idly  at  home,  and  are  burdenous,  chargeable,  and  unprofitable  to 
this  realm,  shall  hereby  be  set  on  work,  but  also  children  of  twelve 
or  fourteen  years  of  age,  or  under,  may  be  kept  from  idleness,  in  making 
of  a  thousand  kinds  of  trifling  things,  which  will  be  good  merchandise 
for  that  country.  And,  moreover,  our  idle  women  (which  the  realm 
may  well  spare)  shall  also  be  employed  on  plucking,  drying,  and  sorting 
of  feathers,  in  pulling,  beating,  and  working  of  hemp,  and  in  gathering 
of  cotton,  and  divers  things  right  necessary  for  dyeing.  All  which 
things  are  to  be  found  in  those  countries  most  plentifully.  And  the 
men  may  employ  themselves  in  dragging  for  pearl,  working  for  mines, 
and  in  matters  of  husbandry,  and  likewise  in  hunting  the  whale  for 
trane,  and  making  casks  to  put  the  same  in,  besides  in  fishing  for  cod, 
salmon,  and  herring,  drying,  salting,  and  barrelling  the  same,  and 
felling  of  trees,  hewing  and  sawing  of  them,  and  such  like  work,  meet 
for  those  persons  that  are  no  men  of  art  or  science. 

Many  other  things  may  be  found  to  the  great  relief  and  good  em- 
ployment of  no  small  number  of  the  natural  subjects  of  this  realm, 
which  do  now  live  here  idly,  to  the  common  annoy  of  the  whole 
State,  Neither  may  I  here  omit  the  great  hope  and  likelihood  of  a 


8  READINGS  IN  ECONOMIC  HISTORY 

passage  beyond  the  Grand  Bay  into  the  South  Seas,  confirmed  by 
sundry  authors  to  be  found  leading  to  Cataia,  the  Moluccas  and 
Spiceries,  whereby  may  ensue  as  general  a  benefit  to  the  realm,  or 
greater  than  hath  yet  been  spoken  of,  without  either  such  charges  or 
other  inconveniences,  as,  by  the  tedious  tract  of  time  and  peril,  which 
the  ordinary  passage  to  those  parts  at  this  day  doth  minister.  .  .  . 

I  must  now,  according  to  my  promise,  show  forth  some  probable 
reasons  that  the  adventurers  in  this  journey  are  to  take  particular 
profit  by  the  same.  It  is,  therefore,  convenient  that  I  do  divide  the 
adventurers  into  two  sorts,  the  noblemen  and  gentlemen  by  them- 
selves, and  the  merchants  by  themselves.  For,  as  I  do  hear,  it  is 
meant  that  there  shall  be  one  society  of  the  noblemen  and  gentlemen, 
and  another  society  of  the  merchants;  and  yet  not  so  divided,  but 
that  each  society  may  freely  and  frankly  trade  and  traffic  one  with 
the  other. 

And  first  to  bend  my  speech  to  the  noblemen  and  gentlemen,  who 
do  chiefly  seek  a  temperate  climate,  wholesome  air,  fertile  soil,  and  a 
strong  place  by  nature  whereupon  they  may  fortify,  and  there  either 
plant  themselves  or  such  other  persons  as  they  shall  think  good  to 
send  to  be  lords  of  that  place  and  country:  —  To  them  I  say  that  all 
these  things  are  very  easy  to  be  found  within  the  degrees  of  30  and  60 
aforesaid,  either  by  south  or  north,  both  in  the  continent  and  in 
islands  thereunto  adjoining,  at  their  choice  .  .  .  and  in  the  whole 
tract  of  that  land,  by  the  description  of  as  many  as  have  been  there, 
great  plenty  of  mineral  matter  of  all  sorts,  and  in  very  many  places 
both  stones  of  price,  pearl  and  chrystal,  and  great  store  of  beasts, 
birds,  and  fowls,  both  for  pleasure  and  necessary  use  of  man  are  to  be 
found.  .  .  . 

And  now  for  the  better  contemplation  and  satisfaction  of  such 
worshipful,  honest-minded  and  well-disposed  merchants  as  have  a 
desire  to  the  furtherance  of  every  good  and  commendable  action,  I 
will  first  say  unto  them,  as  I  have  done  before  to  the  noblemen  and 
gentlemen,  that  within  the  degrees  aforesaid  is  doubtless  to  be  found 
the  most  wholesome  and  best  temperature  of  air,  fertility  of  soil,  and 
every  other  commodity  or  merchandise,  for  the  which,  with  no  small 
peril,  we  do  travel  into  Barbary,  Spain,  Portugal,  France,  Italy, 
Muscovy  and  Eastland,  and  yet  to  the  end  my  arguments  shall  not 
altogether  stand  upon  likelihoods  and  presumptions,  I  say  that  such 
persons  as  have  discovered  and  travelled  those  parts  do  testify  that 
they  have  found  in  those  countries  all  these  things  following,  namely: 
—  [a  list  of  beasts,  birds,  fishes,  trees,  minerals,  etc.]  .  .  , 


EXPLORATION  AND  COLONIZATION  9 

The  sixth  chapter  sheweth  that  the  traffic  and  planting  in  those 
countries  shall  be  unto  the  savages  themselves  very  beneficial  and 
gainful.  .  .  . 

.  .  .  First  and  chiefly,  in  respect  of  the  most  happy  and  glad- 
some tidings  of  the  most  glorious  gospel  of  our  Saviour  Jesus  Christ, 
whereby  they  may  be  brought  from  falsehood  to  truth,  from  darkness 
to  light,  from  the  highway  of  death  to  the  path  of  life,  from  super- 
stitious idolatry  to  sincere  Christianity,  from  the  devil  to  Christ, 
from  hell  to  heaven.  And  if  in  respect  of  all  the  commodities  they 
can  yield  us  (were  they  many  more)  that  they  should  receive  but 
this  only  benefit  of  Christianity,  they  were  more  than  fully 
recompensed.  .  .  . 

B.   Advice  to  Colonists  to  New  England,  1621 l 

The  picture  of  conditions  in  the  colony  at  Plymouth  is  as  valuable  to  us  today 
as  the  advice  was  then  to  the  intending  colonist.  Winslow  was  one  of  the  leading 
men  in  the  colony  and  later  became  governor. 

You  shall  understand  that  in  this  little  time  that  a  few  of  us  have 
been  here,  we  have  built  seven  dwelling-houses  and  four  for  the  use 
of  the  plantation,  and  have  made  preparation  for  divers  others.  We 
set  the  last  spring  some  twenty  acres  of  Indian  corn,  and  sowed 
some  six  acres  of  barley  and  pease;  and  according  to  the  manner  of 
the  Indians,  we  manured  our  ground  with  herrings,  or  rather  shads, 
which  we  have  in  great  abundance,  and  take  with  great  ease  at  our 
doors.  Our  corn  did  prove  well;  and,  God  be  praised,  we  had  a  good 
increase  of  Indian  corn,  and  our  barley  indifferent  good,  but  our 
pease  not  worth  the  gathering,  for  we  feared  they  were  too  late  sown. 
They  came  up  very  well,  and  blossomed ;  but  the  sun  parched  them 
in  the  blossom.  .  .  . 

For  the  temper  of  the  air  here,  it  agreeth  well  with  that  in  England; 
and  if  there  be  any  difference  at  all,  this  is  somewhat  hotter  in  summer. 
Some  think  it  to  be  colder  in  winter;  but  I  cannot  out  of  experience 
so  say.  The  air  is  very  clear  and  not  foggy,  as  hath  been  reported. 
I  never  in  my  life  remember  a  more  seasonable  year  than  we  have 
here  enjoyed;  and  if  we  have  once  but  kine,  horses,  and  sheep,  I 
make  no  question  but  men  might  live  as  contented  here  as  in  any  part 
of  the  world.  For  fish  and  fowl,  we  have  great  abundance.  Fresh 
cod  in  the  summer  is  but  coarse  meat  with  us.  Our  bay  is  full  of 


1  Relation  or  lourtiall,  etc.     By  Edward  Winslow  (London,  1622).     In  Chroni- 
cles of  Pilgrim  Fathers.     By  Alexander  Young  (Boston,  1841),  230-8,  passim. 


io  READINGS  IN  ECONOMIC  HISTORY 

lobsters  all  the  summer,  and  affordeth  variety  of  other  fish.  In 
September  we  can  take  a  hogshead  of  eels  in  a  night,  with  small 
labor,  and  can  dig  them  out  of  their  beds  all  the  winter.  We  have 
muscles  and  othus  [others?^  at  our  doors.  Oysters  we  have  none  near, 
but  we  can  have  them  brought  by  the  Indians  when  we  will.  All  the 
spring-time  the  earth  sendeth  forth  naturally  very  good  sallet  herbs. 
Here  are  grapes,  white  and  red,  and  very  sweet  and  strong  also; 
strawberries,  gooseberries,  raspas,  &c.;  plums  of  three  sorts,  white, 
black,  and  red,  being  almost  as  good  as  a  damson;  abundance  of 
roses,  white,  red,  and  damask;  single,  but  very  sweet  indeed.  The 
country  wanteth  only  industrious  men  to  employ;  for  it  would 
grieve  your  hearts  if,  as  I,  you  had  seen  so  many  miles  together  by 
goodly  rivers  uninhabited;  and  withal,  to  consider  those  parts  of 
the  world  wherein  you  live  to  be  even  greatly  burthened  with  abun- 
dance of  people.  These  things  I  thought  good  to  let  you  understand, 
being  the  truth  of  things  as  near  as  I  could  experimentally  take 
knowledge  of,  and  that  you  might  on  our  behalf  give  God  thanks, 
who  hath  dealt  so  favorably  with  us.  ... 

Now  because  I  expect  your  coming  unto  us,  with  other  of  our 
friends,  whose  company  we  much  desire,  I  thought  good  to  advertise 
you  of  a  few  things  needful.  Be  careful  to  have  a  very  good  bread- 
room  to  put  your  biscuits  in.  Let  your  cask  for  beer  and  water 
be  iron-bound,  for  the  first  tire,  if  not  more.  Let  not  your  meat  be 
dry-salted;  none  can  better  do  it  than  the  sailors.  Let  your  meal  be 
so  hard  trod  in  your  cask  that  you  shall  need  an  adz  or  hatchet  to 
work  it  out  with.  Trust  not  too  much  on  us  for  corn  at  this  time, 
for  by  reason  of  this  last  company  that  came,  depending  wholly  upon 
us,  we  shall  have  little  enough  till  harvest.  Be  careful  to  come  by 
some  of  your  meal  to  spend  by  the  way;  it  will  much  refresh  you. 
Build  your  cabins  as  open  as  you  can,  and  bring  good  store  of  clothes 
and  bedding  with  you.  Bring  every  man  a  musket  or  fowling  piece. 
Let  your  piece  be  long  in  the  barrel,  and  fear  not  the  weight  of  it, 
for  most  of  our  shooting  is  from  stands.  Bring  juice  of  lemons,  and 
take  it  fasting;  it  is  of  good  use.  For  hot  waters,  aniseed  water  is 
the  best;  but  use  it  sparingly.  If  you  bring  anything  for  comfort 
in  the  country,  butter  or  sallet  oil,  or  both,  is  very  good.  Our 
Indian  corn,  even  the  coarsest,  maketh  as  pleasant  meat  as  rice; 
therefore  spare  that,  unless  to  spend  by  the  way.  Bring  paper  and 
linseed  oil  for  your  windows,  with  cotton  yarn  for  your  lamps.  Let 
your  shot  be  most  for  big  fowls,  and  bring  store  of  powder  and  shot. 
I  forbear  further  to  write  for  the  present,  hoping  to  see  you  by  the 


EXPLORATION  AND  COLONIZATION  n 

next  return.     So  I  take  my  leave,  commending  you  to  the  Lord  for 
a  safe  conduct  unto  us,  resting  in  him, 

Your  loving  friend, 

E.  W. 

Plymouth,  in  New  England,  this  nth  of  December,  1621. 

C.   Information  respecting  Land  in  Xcw  Netherland,  1650* 

The  colonization  of  New  Xetherland  by  the  Dutch  proceeded  rather  more 
slowly  than  that  of  the  neighboring  colonies,  and  various  methods  were  followed 
by  the  States  General  to  hasten  its  development.  The  following  extract  is  from  a 
report  to  them  by  their  secretary  on  the  conditions  of  settlement. 

Information  relative  to  taking  up  land  in  New  Netherland,  in 
the  form  of  Colonies  or  private  bouweries.  Delivered  hi 
by  Secretary  van  Tienhoven,  on  the  4th  of  March,  1650.  .  .  . 

Boors  and  others  who  are  obliged  to  work  at  first  in  Colonies  ought 
to  sail  from  this  country  in  the  fore  or  latter  part  of  winter,  in  order 
to  arrive  with  God's  help  in  New  Netherland  early  in  the  Spring, 
in  March,  or  at  latest  in  April,  so  as  to  be  able  to  plant,  during  that 
summer,  garden  vegetables,  maize  and  beans,  and  moreover  employ 
the  whole  summer  in  clearing  land  and  building  cottages,  as  I  shall 
hereafter  describe. 

All  then  who  arrive  in  New  Netherland  must  immediately  set 
about  preparing  the  soil  so  as  to  be  able,  if  possible  to  plant  some 
winter  grain,  and  to  proceed  the  next  winter  to  cut  and  clear  the 
timber.  The  trees  are  usually  felled  from  the  stump,  cut  up  and 
burnt  in  the  field,  unless  such  as  are  suitable  for  building,  for  pal- 
isades, posts  and  rails,  which  must  be  prepared  during  the  winter, 
so  as  to  be  set  up  in  the  spring  on  the  new  made  land  which  is  in- 
tended to  be  sown,  in  order  that  the  cattle  may  not  in  any  wise  injure 
the  crops.  In  most  lands  is  found  a  certain  root,  called  red  Wortel, 
which  must  before  ploughing,  be  extirpated  with  a  hoe,  expressly 
made  for  that  purpose.  This  being  done  in  the  winter,  some  plough 
right  around  the  stumps,  should  time  or  circumstances  not  allow 
these  to  be  removed;  others  plant  tobacco,  maize  and  beans,  at  first. 
The  soil  even  thus  becomes  very  mellow,  and  they  sow  winter  grain 
the  next  fall.  From  tobacco,  can  be  realized  some  of  the  expenses 
incurred  in  clearing  the  land.  The  maize  and  beans  help  to  support 
both  men  and  cattle.  The  farmer  having  thus  begun,  must  en- 


1  Documents  relative  to  the  Colonial  History  of  the  State  of  New  York.     Kd.  by 
E.  B.  O'Callaghan  (Albany,  1856),  I,  365-71,  passim. 


12  READINGS  IN  ECONOMIC  HISTORY 

deavor,  every  year,  to  clear  as  much  new  land  as  he  possibly  can,  and 
sow  it  with  such  seed  as  he  considers  most  suitable. 

It  is  not  necessary  that  the  husbandman  should  take  up  much 
stock  in  the  beginning,  since  clearing  land  and  other  necessary  labor 
do  not  permit  him  to  save  much  hay  and  to  build  barns  for  stabling. 
One  pair  of  draft  horses  or  a  yoke  of  oxen  only  is  necessary,  to  ride 
the  planks  for  buildings,  or  palisades  or  rails  from  the  land  to  the 
place  where  they  are  to  be  set. 

The  farmer  can  get  all  sorts  of  cattle  in  the  course  of  the  second 
summer,  when  he  will  have  more  leisure  to  cut  and  bring  home  hay, 
also  to  build  houses  and  barns  for  men  and  cattle. 

Before  beginning  to  build,  'twill  above  all  things  be  necessary  to 
select  a  well  located  spot,  either  on  some  river  or  bay,  suitable  for  the 
settlement  of  a  village  or  hamlet.  This  is  previously  properly  sur- 
veyed and  divided  into  lots,  with  good  streets  according  to  the  situ- 
ation of  the  place.  This  hamlet  can  be  fenced  all  around  with  high 
palisades  or  long  boards  and  closed  with  gates,  which  is  advantageous 
in  case  of  attack  by  the  natives,  who  heretofore  used  to  exhibit  their 
insolence  in  new  plantations. 

Outside  the  village  or  hamlet,  other  land  must  be  laid  out  which 
can  in  general  be  fenced  and  prepared  at  the  most  trifling  expense. 

Those  in  New  Netherland  and  especially  in  New  England,  who  have 
no  means  to  build  farm-houses  at  first  according  to  their  wishes,  dig 
a  square  pit  in  the  ground,  cellar  fashion,  six  or  seven  feet  deep,  as 
long  and  as  broad  as  they  think  proper,  case  the  earth  inside  all 
round  the  wall  with  timber,  which  they  line  with  the  bark  of  trees 
or  something  else  to  prevent  the  caving  in  of  the  earth;  floor  this 
cellar  with  plank  and  wainscot  it  overhead  for  a  ceiling,  raise  a  roof 
of  spars  clear  up  and  cover  the  spars  with  bark  or  green  sods,  so  that 
they  can  live  dry  and  warm  in  these  houses  with  their  entire  families 
for  two,  three  and  four  years,  it  being  understood  that  partitions  are 
run  through  those  cellars  which  are  adapted  to  the  size  of  the  family. 
The  wealthy  and  principal  men  in  New  England,  in  the  beginning  of 
the  Colonies,  commenced  their  first  dwelling-houses  in  this  fashion 
for  two  reasons;  first,  in  order  not  to  waste  time  building  and  not  to 
want  food  the  next  season;  secondly,  in  order  not  to  discourage 
poorer  laboring  people  whom  they  brought  over  in  numbers  from 
Fatherland.  In  the  course  of  three  or  four  years,  when  the  country 
became  adapted  to  agriculture,  they  built  themselves  handsome 
houses,  spending  on  them  several  thousands. 

After  the  houses  are  built  in  the  above  described  manner,  or  other- 


EXPLORATION  AND  COLONIZATION  13 

wise  according  to  each  person's  means  and  fancy,  gardens  are  made 
and  planted  in  season  with  all  sorts  of  pot-herbs,  principally  pars- 
nips, carrots  and  cabbage,  which  bring  great  plenty  into  the  hus- 
bandman's dwelling.  The  maize  can  serve  as  bread  for  men,  and  food 
for  cattle. 

The  hogs,  after  having  picked  up  their  food  for  some  months  in 
the  woods,  are  crammed  with  corn  in  the  fall ;  when  fat  they  are  killed 
and  furnish  a  very  hard  and  clean  pork;  a  good  article  for  the  hus- 
bandman who  gradually  and  in  time  begins  to  purchase  horses  and 
cows  with  the  produce  of  his  grain  and  the  increase  of  his  hogs,  and 
instead  of  a  cellar  as  aforesaid,  builds  good  farm-houses  and  barns.  .  .  . 

The  following  is  the  mode  pursued  by  the  West  India  Company 
in  the  first  planting  of  Bouweries. 

The  Company,  at  their  own  cost  and  in  their  own  ships  conveyed 
several  boors  to  New  Netherland,  and  gave  these  the  following  terms: — 

The  farmer,  being  conveyed  with  his  family  over  sea  to  New 
Netherland,  was  granted  by  the  Company  for  the  term  of  six  years  a 
Bouwerie,  which  was  partly  cleared,  and  a  good  part  of  which  was  fit 
for  the  plough. 

The  Company  furnished  the  farmer  a  house,  barn,  farming  imple- 
ments and  tools,  together  with  four  horses,  four  cows,  sheep  and  pigs 
in  proportion,  the  usufruct  and  enjoyment  of  which  the  husbandman 
should  have  during  the  six  years,  and  on  the  expiration  thereof,  return 
the  number  of  cattle  he  received.  The  entire  increase  remained 
with  the  farmer.  The  farmer  was  bound  to  pay  yearly  one  hundred 
gilders  and  eighty  pounds  of  butter  rent  for  the  cleared  land  and 
bouwerie. 

The  country  people  who  obtained  the  above  mentioned  conditions 
all  prospered  during  their  residence  on  the  Company's  lands. 

Afterwards  the  cattle  belonging  to  the  Company  in  New  Nether- 
land were  distributed  for  some  years  among  those  who  had  no  means 
to  purchase  stock. 

The  risk  of  the  cattle  dying  is  shared  in  common,  and  after  the 
expiration  of  the  contract  the  Company  receives,  if  the  cattle  live, 
the  number  the  husbandman  first  received,  and  the  increase  which 
is  over,  is  divided  half  and  half;  by  these  means  many  people  have 
obtained  stock  and,  even  to  this  day,  the  Company  have  still  con- 
siderable cattle  among  the  Colonists,  who  make  use  on  the  above 
conditions  of  the  horses  in  cultivating  the  farm;  the  cows  serve  for 
the  increase  of  the  stock  and  for  the  support  of  the  family.  .  .  . 


14  READINGS  IN  ECONOMIC  HISTORY 

D.  Advice  to  Immigrants  to  Maryland,  1655* 

After  having  lived  nineteen  years  in  Virginia,  John  Hammond  removed  to 
Maryland,  from  which  place  he  wrote  the  following  account.  It  gives  a  trust- 
worthy description  of  the  conditions,  as  well  as  some  good  advice  to  immigrants. 

When  ye  go  aboard,  expect  the  Ship  somewhat  troubled  and  in 
a  hurliburly,  untill  ye  cleer  the  lands  end,  and  that  the  Ship  is  rum- 
maged, and  things  put  to  rights,  which  many  times  discourages  the 
Passengers,  and  makes  them  wish  the  Voyage  unattempted:  but 
this  is  but  for  a  short  season,  and  washes  off  when  at  Sea,  where  the 
time  is  pleasantly  passed  away,  though  not  with  such  choise  plenty 
as  the  shore  affords. 

But  when  ye  arrive  and  are  settled,  ye  will  find  a  strange  alteration, 
an  abused  Country  giving  the  lye  in  your  own  approbations  to  those 
that  have  calumniated  it,  and  these  infalable  arguments  may  convince 
all  incredible  and  obstinate  opinions,  concerning  the  goodnesse  and 
delightfulnesse  of  the  Country,  that  never  any  servants  of  late  times 
have  gone  thither,  but  in  their  Letters  to  their  Friends  commend  and 
approve  of  the  place,  and  rather  invite  than  disswade  their  acquaint- 
ance from  comming  thither.  .  .  . 

The  labour  servants  are  put  to,  is  not  so  hard  nor  of  such  continu- 
ance as  Husbandmen,  nor  Handecraftmen  are  kept  at  in  England, 
as  I  said  little  or  nothing  is  done  in  winter  time,  none  ever  working 
before  sun  rising  nor  after  sun  set,  in  the  summer  they  rest,  sleep  or 
exercise  themselves  five  houres  in  the  heat  of  the  day,  Saturdayes 
afternoon  is  alwayes  their  own,  the  old  Holidayes  are  observed  and 
the  Sabboath  spent  in  good  exercises. 

The  Women  are  not  (as  is  reported)  put  into  the  ground  to  worke, 
but  occupie  such  domestique  imployments  and  houswifery  as  in 
England,  that  is  dressing  victuals,  righting  up  the  house,  milking, 
imployed  about  dayries,  washing,  sowing,  &c.,  and  both  men  and 
women  have  times  of  recreations,  as  much  or  more  than  in  any  part 
of  the  world  besides,  yet  som  wenches  that  are  nasty,  beastly  and  not 
fit  to  be  so  imployed  are  put  into  the  ground,  for  reason  tells  us,  they 
must  not  at  charge  be  transported  and  then  maintained  for  nothing, 
but  those  that  prove  so  aukward  are  rather  burthensome  then  serv- 
ants desirable  or  usefull. 


1  Leah  and  Rachel,  or,  The  Two  Fruitfull  Sisters  Virginia  and  Mary-land. 
By  John  Hammond  (London,  1656).  Reprinted  in  Force,  Tracts  and  Other 
Papers,  III,  no.  xiv,  11-13,  and  in  Original  Narratives  of  Early  American  History, 
XI,  289-291. 


EXPLORATION  AND   COLONIZATION  15 

The  Country  is  fruitfull,  apt  for  all  and  more  than  England  can 
or  does  produce.  The  usuall  diet  is  such  as  in  England,  for  the 
rivers  afford  innumerable  sortes  of  choyce  fish,  (if  they  will  take  the 
paines  to  make  wyers  or  hier  the  Natives,  who  for  a  small  matter 
will  undertake  it,)  winter  and  summer,  and  that  in  many  places 
sufficient  to  serve  the  use  of  man,  and  to  fatten  hoggs.  Water-fowle 
of  all  sortes  are  (with  admiration  to  be  spoken  of)  plentifull  and  easie 
to  be  killed,  yet  by  many  degrees  more  plentifull  in  some  places  than 
in  othersome.  Deare  all  over  the  Country,  and  in  many  places  so 
many  that  venison  is  accounted  a  tiresom  meat;  wilde  Turkeys  are 
frequent,  and  so  large  that  I  have  seen  some  weigh  neer  threescore 
pounds;  other  beasts  there  are  whose  flesh  is  wholsom  and  savourie, 
such  are  unknowne  to  us;  and  therefore  I  will  not  stuff e  my  book 
with  superfluous  relation  of  their  names;  huge  Oysters  and  store  in 
all  parts  where  the  salt-water  comes. 

The  Country  is  exceedingly  replenished  with  Neat  cattle,  Hoggs, 
Goats  and  Tame- fowle, but  not  many  sheep;  so  that  mutton  is  some- 
what scarce,  but  that  defect  is  supplied  with  store  of  Venison,  other 
flesh  and  fowle.  The  Country  is  full  of  gallant  Orchards,  and  the 
fruit  generally  more  luscious  and  delightfull  than  here,  witnesse  the 
Peach  and  Quince,  the  latter  may  be  eaten  raw  savourily,  the  former 
differs  and  as  much  exceeds  ours  as  the  best  relished  apple  we  have 
doth  the  crabb,  and  of  both  most  excellent  and  comfortable  drinks 
are  made.  Grapes  in  infinite  manners  grow  wilde,  so  do  Walnuts, 
Smalnuts,  Chesnuts  and  abundance  of  excellent  fruits,  Plums  and 
Berries,  not  growing  or  known  in  England;  graine  we  have,  both 
English  and  Indian  for  bread  and  Bear,  and  Pease  besides  English 
of  ten  several  sorts,  all  exceeding  ours  in  England;  the  gallant  root 
of  Potatoes  are  common,  and  so  are  all  sorts  of  rootes,  herbes  and 
Garden  stuff  e. 

E.   An  Invitation  to  Colonists  for  Carolina,  1666  l 

The  following  extract  is  from  a  pamphlet  written  to  attract  colonists, 
setting  forth  the  terms  upon  which  they  will  be  settled  in  the  province  of  Carolina. 
It  will  be  noticed  that  both  free  persons  and  indented  servants  are  welcomed. 

The  chief  of  the  Privileges  are  as  follows. 

First,  There  is  full  and  free  Liberty  of  Conscience  granted  to  all, 
so  that  no  man  is  to  be  molested  or  called  in  question  for  matters  of 

1  A  Brief  Description  of  the  Province  of  Carolina.  By  Robert  Home  (?) 
(London,  1666).  Reprinted  in  Original  Narratives  of  Early  American  History. 
Edited  by  J.  F.  Jameson  (New  York,  1910),  XII,  71-73.  Printed  by  permis- 
sion of  the  editor  and  the  publishers,  Charles  Scribner's  Sons. 


1 6  READINGS  IN  ECONOMIC  HISTORY 

Religious  Concern;  but  every  one  to  be  obedient  to  the  Civil  Govern- 
ment, worshipping  God  after  their  own  way. 

Secondly,  There  is  freedom  from  Custom,  for  all  Wine,  Silk, 
Raisins,  Currance,  Oyl,  Olives,  and  Almonds,  that  shall  be  raised  in 
the  Province  for  7.  years,  after  4  Ton  of  any  of  those  commodities 
shall  be  imported  in  one  Bottom. 

Thirdly,  Every  Free-man  and  Free-woman  that  transport  them- 
selves and  Servants  by  the  25  of  March  next,  being  1667.  shall  have 
for  Himself,  Wife,  Children,  and  Men-servants,  for  each  100  Acres 
of  Land  for  him  and  his  Heirs  forever,  and  for  every  Woman-servant 
and  Slave  50  Acres,  paying  at  most  \d.  per  acre,  per  annum,  in  lieu 
of  all  demands,  to  the  Lords  Proprietors:  Provided  always,  That 
every  Man  be  armed  with  a  good  Musquet  full  bore,  io/.  Powder, 
and  20/.  of  Bullet,  and  six  Months  Provision  for  all,  to  serve  them 
whilst  they  raise  Provision  in  that  Countrey. 

Fourthly,  Every  Man-Servant  at  the  expiration  of  their  time,  is 
to  have  of  the  Country  a  100  Acres  of  Land  to  him  and  his  heirs  for 
ever,  paying  only  \d.  per  Acre,  per  annum,  and  the  Women  50.  Acres 
of  Land  on  the  same  conditions;  their  Masters  also  are  to  allow 
them  two  Suits  of  Apparrel  and  Tools  such  as  he  is  best  able  to 
work  with,  according  to  the  Custom  of  the  Countrey. 

Fifthly,  They  are  to  have  a  Governour  and  Council  appointed 
from  among  themselves,  to  see  the  Laws  of  the  Assembly  put 
in  due  execution ;  but  the  Governour  is  to  rule  but  3  years,  and  then 
learn  to  obey;  also  he  hath  no  power  to  lay  any  tax,  or  make  or 
abrogate  any  Law,  without  the  Consent  of  the  Colony  in  their 
Assembly. 

Sixthly,  They  are  to  choose  annually  from  among  themselves,  a 
certain  Number  of  Men,  according  to  their  divisions,  which  consti- 
tute the  General  Assembly  with  the  Governour  and  his  Council,  and 
have  the  sole  power  of  Making  Laws,  and  Laying  Taxes  for  the 
common  good  when  need  shall  require. 

These  are  the  chief  and  Fundamental  privileges,  but  the  Right 
Honourable  Lords  Proprietors  have  promised  (and  it  is  their  interest 
so  to  do)  to  be  ready  to  grant  what  other  Privileges  may  be  found 
advantageous  for  the  good,  of  the  Colony. 

Is  there  therefore  any  younger  Brother  who  is  born  of  Gentile 
blood,  and  whose  Spirit  is  elevated  above  the  common  sort,  and  yet 
the  hard  usage  of  our  Country  hath  not  allowed  suitable  fortune; 
he  will  not  surely  be  afraid  to  leave  his  Native  Soil  to  advance  his 
Fortunes  equal  to  his  Blood  and  Spirit,  and  so  he  will  avoid  those 


EXPLORATION  AND  COLONIZATION  17 

unlawful  ways  too  many  of  our  young  Gentlemen  take  to  maintain 
themselves  according  to  their  high  education,  having  but  small 
Estates;  here,  with  a  few  Servants  and  a  small  Stock  a  great  Estate 
may  be  raised,  although  his  Birth  have  not  entituled  him  to  any 
of  the  Land  of  his  Ancestors,  yet  his  Industry  may  supply  him  so, 
as  to  make  him  the  head  of  as  famous  a  family.  .  .  . 

If  any  Maid  or  single  Woman  have  a  desire  to  go  over,  they 
will  think  themselves  in  the  Golden  Age,  when  Men  paid  a  Dowry 
for  their  Wives;  for  if  they  be  but  Civil,  and  under  50  years  of 
Age,  some  honest  Man  or  other,  will  purchase  them  for  their 
Wives. 

Those  that  desire  further  advice,  or  Servants  that  would  be 
entertained,  let  them  repair  to  Mr.  Matthew  Wilkinson,  Ironmonger, 
at  the  Sign  of  the  Three  Feathers,  in  Bishopsgate-Street,  where  they 
may  be  informed  when  the  ships  will  be  ready,  and  what  they  must 
carry  with  them. 

F.   Advice  to  Immigrants  to  South  Carolina,  1731 l 

The  author  here  gives  some  specific  directions  and  advice  to  intending  emi- 
grants such  as  would  best  aid  them  in  making  preparations  for  their  departure 
to  a  new  and  unknown  country. 

Proposals  by  Mr.  Peter  Purry,  of  Newfchatel,  for  Encouragement 
of  such  Swiss  Protestants  as  should  agree  to  accompany  him  to 
Carolina,  to  settle  a  New  Colony. 

There  are  only  two  Methods,  viz:  one  for  Persons  to  go  as  Serv- 
ants, the  other  to  settle  on  their  own  Account. 

1.  Those  who  are  desirous  to  go  as  Servants  must  be  Carpenters, 
Vine-planters,  Husbandmen,  or  good  Labourers. 

2.  They  must  be  such  as  are  not  very  Poor,  but  in  a  Condition 
to  carry  with  them  what  is  sufficient   to   support   their  common 
necessity. 

3.  They  must  have  at  least  3  or  4  good  Shirts,  and  a  Suit  of 
Cloathes  each. 

4.  They  are   to  have   each  for  their  Wages  100  Livres  yearly, 
which  make  50  Crowns  of  the  Money  of  Newfchatel  in  Swisserland, 
but  their  Wages  are  not  to  commence  till  the  Day  of  their  arrival 
in  Carolina. 


1  A  Description  of  the  Province  of  South  Carolina,  Drawn  up  at  Charles  Town, 
in  September,  1731.  By  J.  P.  Purry,  et  al.  In  Force,  Tracts  and  Other  Papers 
(Washington,  1836),  II,  no.  xi,  14-16. 


1 8  READINGS  IN  ECONOMIC  HISTORY 

5.  Expert  Carpenters  shall  have  suitable  Encouragement. 

6.  The  time  of  their  Contract  shall  be  3  Years,  reckoning  from 
the  Day  of  their  arrival  in  that  Country. 

7.  They  shall  be  supply 'd  in  part  of  their  Wages  with  Money 
to  come  from  Sivisserland,  till  they  imbark  for  Carolina. 

8.  Their  Wages  shall  be  paid  them  regularly  at  the  end  of  every 
Year;  for  security  whereof  they  shall  have  the  Fruits  of  their  Labour, 
and  generally  all  that  can  be  procured  for  them,  whether  Moveables 
or  Imoveables. 

Q.  Victuals  and  Lodging  from  the  Day  of  their  Imbarkation 
shall  not  be  put  to  their  Account,  nor  their  Passage  by  Sea. 

10.  They,  shall  have  what  Money  they  want  advanced  during 
the  Term  of  their  Service  in  part  of  their  Wages  to  buy  Linnen, 
Clothes,  and  all  other  Necessaries. 

11.  If  they  happen  to  fall  Sick  they  shall  be  lodg'd  and  nourish'd 
Gratis,  but  their  Wages  shall  not  go  on  during  their  Illness,  or  that 
they  are  not  able  to  Work. 

12.  They  shall  serve  after  Recovery,  the  time  they  had  lost 
during  their  Sickness. 

13.  What  goes  to  pay  Physicians  or  Surgeons,  shall  be  put  to  their 
Accompt. 

As  to  those  who  go  to  settle  on  their  own  Account,  they  must 
have  at  least  50  Crowns  each,  because  their  Passage  by  Sea,  and  Vict- 
uals, will  cost  from  20  to  25  Crowns,  and  the  rest  of  the  Money  shall 
go  to  procure  divers  things  which  will  be  absolutely  necessary  for 
the  Voyage. 

It  may  not  be  disagreeable  in  this  Place  to  inform  our  Readers, 
that  Mr.  Purry,  on  his  Return  to  Swisserland,  with  this  Account  of 
Carolina,  soon  prevail'd  on  many  industrious  Persons  and  their 
Families  to  the  Number  of  about  400,  to  go  with  him.  On  the  nth 
of  this  Month  [August,  1732]  they  embarked  at  Calais  in  France, 
on  Board  two  English  Ships,  which  arrived  off  Dover  the  next  Day, 
and  are  now  sailed  on  their  Voyage.  Mr.  Bignion  their  Minister 
came  to  London,  and  received  Episcopal  Ordination:  So  that  the 
Reflections  which  some  have  cast  on  the  Religion  of  these  People, 
are  unjustly  founded. 


EXPLORATION  AND   COLONIZATION  19 

G.   Design  of  Establishing  the  Colony  in  Georgia,  1733 l 

The  colony  of  Georgia  was  planned  as  a  philanthropic  enterprise  to  serve  as 
a  refuge  for  the  poor  and  distressed  in  Europe.  It  was  to  be  managed  by  a  board 
of  trustees.  General  Oglethorpe,  who  was  the  founder  of  the  colony,  was  a  man 
of  the  highest  character  and  motives. 

SOME  ACCOUNT  OF  THE  DESIGNS  OF  THE  TRUSTEES  FOR  ESTABLISHING 
THE   COLONY   OF   GEORGIA   IN   AMERICA. 

In  America  there  are  fertile  lands  sufficient  to  subsist  all  the 
useless  Poor  in  England,  and  distressed  Protestants  in  Europe;  yet 
Thousands  starve  for  want  of  mere  sustenance.  The  distance  makes 
it  difficult  to  get  thither.  The  same  want  that  renders  men  useless 
here,  prevents  their  paying  their  passage;  and  if  others  pay  it  for 
'em,  they  become  servants,  or  rather  slaves  for  years  to  those  who  have 
defrayed  the  expense.  Therefore,  money  for  passage  is  necessary, 
but  is  not  the  only  want;  for  if  people  were  set  down  in  America, 
and  the  land  before  them,  they  must  cut  down  trees,  build  houses, 
fortify  towns,  dig  and  sow  the  land  before  they  can  get  in  a  harvest; 
and  till  then,  they  must  be  provided  with  food,  and  kept  together, 
that  they  may  be  assistant  to  each  other  for  their  natural  support 
and  protection.  .  .  . 

FROM  THE  CHARTER. —  His  Majesty  having  taken  into  his  con- 
sideration, the  miserable  circumstances  of  many  of  his  own  poor 
subjects,  ready  to  perish  for  want:  as  likewise  the  distresses  of  many 
poor  foreigners,  who  would  take  refuge  here  from  persecution;  and 
having  a  Princely  regard  to  the  great  danger  the  southern  frontiers 
of  South  Carolina  are  exposed  to,  by  reason  of  the  small  number  of 
white  inhabitants  there,  hath,  out  of  his  Fatherly  compassion  towards 
his  subjects,  been  graciously  pleased  to  grant  a  charter  for  incor- 
porating a  number  of  gentlemen  by  the  name  of  The  Trustees  for  estab- 
lishing the  Colony  of  Georgia  in  America.  They  are  impowered  to 
collect  benefactions;  and  lay  them  out  in  cloathing,  arming,  sending 
over,  and  supporting  colonies  of  the  poor,  whether  subjects  or  for- 
eigners, in  Georgia.  And  his  Majesty  farther  grants  all  his  lands 
between  the  rivers  Savannah  and  Alatamaha,  which  he  erects  into  a 
Province  by  the  name  of  Georgia,  unto  the  Trustees,  in  trust  for  the 
poor,  and  for  the  better  support  of  the  Colony.  .  .  . 

1  A  Brief  Account  of  the  Establishment  of  the  Colony  of  Georgia  under  Gen. 
James  Oglethorpe  (London,  1783).  In  Force,  Tracts  and  Other  Papers  (Washing- 
ton, 1835),  I,  no.  ii,  4-5. 


20  READINGS  IN  ECONOMIC  HISTORY 

The  Trustees  intend  to  relieve  such  unfortunate  persons  as  cannot 
subsist  here,  and  establish  them  in  an  orderly  manner,  so  as  to  form 
a  well  regulated  town.  As  far  as  their  fund  goes,  they  will  defray 
the  charge  of  their  passage  to  Georgia;  give  them  necessaries,  cattle, 
land,  and  subsistence,  till  such  time  as  they  can  build  their  houses 
and  clear  some  of  their  land.  .  .  . 

H.  Information  to  Those  Who  Would  Remove  to  America,  1760  x 

In  spite  of  a  century  and  a  half  of  colonization  of  America  by  Europeans,  and 
especially  by  Englishmen,  there  was  a  great  deal  of  ignorance  and  misconception 
as  to  actual  conditions  there.  No  one  was  better  fitted  to  describe  the  situation 
and  give  some  needed  advice  than  Franklin,  with  his  sound  judgment  and  thorough 
knowledge. 

Many  persons  in  Europe,  having  directly  or  by  letters,  expressed 
to  the  writer  of  this,  who  is  well  acquainted  with  North  America, 
their  desire  of  transporting  and  establishing  themselves  in  that 
country;  but  who  appear  to  have  formed,  through  ignorance,  mis- 
taken ideas  and  expectations  of  what  is  to  be  obtained  there;  he 
thinks  it  may  be  useful,  and  prevent  inconvenient,  expensive,  and 
fruitless  removals  and  voyages  of  improper  persons,  if  he  gives  some 
clearer  and  truer  notions  of  that  part  of  the  world,  than  appear  to 
have  hitherto  prevailed.  .  .  . 

The  truth  is,  that  though  there  are  in  that  country  few  people  so 
miserable  as  the  poor  of  Europe,  there  are  also  very  few  that  in  Europe 
would  be  called  rich;  it  is  rather  a  general  happy  mediocrity  that 
prevails.  There  are  few  great  proprietors  of  the  soil,  and  few  tenants; 
most  people  cultivate  their  own  lands,  or  follow  some  handicraft  or 
merchandise;  very  few  are  rich  enough  to  live  idly  upon  their  rents 
or  incomes,  or  to  pay  the  highest  prices  given  in  Europe  for  painting, 
statues,  architecture,  and  the  other  works  of  art,  that  are  more  curious 
than  useful.  ...  Of  civil  offices,  or  employments,  there  are  few;  no 
superfluous  ones,  as  in  Europe;  and  it  is  a  rule  established  in  some 
of  the  States,  that  no  office  should  be  so  profitable  as  to  make  it 
desirable.  .  .  . 

These  ideas  prevailing  more  or  less  in  all  the  United  States,  it  can 
not  be  worth  any  man's  while,  who  has  a  means  of  living  at  home,  to 
expatriate  himself,  in  hopes  of  obtaining  a  profitable  civil  office  in 
America;  and,  as  to  military  offices,  they  are  at  an  end  with  the  war, 
the  armies  being  disbanded.  Much  less  is  it  advisable  for  a  person  to 

1  Information  to  those  who  would  Remove  to  America.  By  Benjamin  Franklin. 
In  Works  (Sparks  Edition,  Boston,  1840),  II,  467-472. 


EXPLORATION  AND   COLONIZATION  21 

go  thither,  who  has  no  other  quality  to  recommend  him  but  his  birth. 
In  Europe  it  has  indeed  its  value;  but  it  is  a  commodity  that  cannot 
be  carried  to  a  worse  market  than  that  of  America,  where  people  do  not 
inquire  concerning  a  stranger,  What  is  he?  but,  What  can  he  do  ?  If  he 
has  any  useful  art,  he  is  welcome;  and  if  he  exercises  it,  and  behaves  well 
he  will  be  respected  by  all  that  know  him ;  but  a  mere  man  of  quality 
who,  on  that  account,  wants  to  live  upon  the  public,  by  some  office 
or  salary ,  will  be  despised  and  disregarded.  The  husbandman  is  in  honor 
there,  and  even  the  mechanic,  because  their  employments  are  useful 

With  regard  to  encouragements  for  strangers  from  government, 
they  are  really  only  what  are  derived  from  good  laws  and  liberty. 
Strangers  are  welcome,  because  there  is  room  enough  for  them  all, 
and  therefore  the  old  inhabitants  are  not  jealous  of  them;  the  laws 
protect  them  sufficiently,  so  that  they  have  no  need  of  the  patronage 
of  great  men;  and  everyone  will  enjoy  securely  the  profits  of  his 
industry.  But,  if  he  does  not  bring  a  fortune  with  him,  he  must  work 
and  be  industrious  to  live.  One  or  two  years'  residence  gives  him 
all  the  rights  of  a  citizen;  but  the  government  does  not,  at  present, 
whatever  it  may  have  done  in  former  times,  hire  people  to  become 
settlers,  by  paying  their  passages,  giving  land,  negroes,  utensils, 
stock,  or  any  other  kind  of  emolument  whatsoever.  In  short,  America 
is  the  land  of  labor,  and  by  no  means  what  the  English  call  Lubberland, 
and  the  French  Pays  de  Cocagne,  where  the  streets  are  said  to  be 
paved  with  half-peck  loaves,  the  houses  tiled  with  pancakes,  and 
where  fowls  fly  about  already  roasted,  crying,  Come  eat  me! 

Who  then  are  the  kind  of  persons  to  whom  an  emigration  to 
America  may  be  advantageous?  And  what  are  the  advantages  they 
may  reasonably  expect? 

Land  being  cheap  in  that  country,  from  the  vast  forests  still  void 
of  inhabitants,  and  not  likely  to  be  occupied  in  an  age  to  come,  inso- 
much that  the  propriety  of  an  hundred  acres  of  fertile  soil  full  of 
wood  may  be  obtained  near  the  frontiers,  in  many  places,  for  eight 
or  ten  guineas,  hearty  young  laboring  men,  who  understand  the 
husbandry  of  corn  and  cattle,  which  is  nearly  the  same  in  that  country 
as  in  Europe,  may  easily  establish  themselves  there.  A  little  money 
saved  of  the  good  wages  they  receive  there,  while  they  work  for  others, 
enables  them  to  buy  the  land  and  begin  their  plantation,  in  which 
they  are  assisted  by  the  good-will  of  their  neighbors,  and  some  credit. 
Multitudes  of  poor  people  from  England,  Scotland,  Ireland,  and 
Germany,  have  by  this  means  in  a  few  years  become  wealthy  farmers, 
who,  in  their  own  countries,  where  all  the  lands  are  fully  occupied, 


22  READINGS  IN  ECONOMIC  HISTORY 

and  the  wages  of  labor  low,  could  never  have  emerged  from  the  poor 
condition  wherein  they  were  born. 

From  the  salubrity  of  the  air,  the  healthiness  of  the  climate, 
the  plenty  of  good  provisions,  and  the  encouragement  to  early  mar- 
riages by  the  certainty  of  subsistence  in  cultivating  the  earth, 
the  increase  of  inhabitants  by  natural  generation  is  very  rapid  in 
America,  and  becomes  still  more  so  by  the  accession  of  strangers; 
hence  there  is  a  continual  demand  for  artisans  of  all  the  necessary 
and  useful  kinds,  to  supply  those  cultivators  of  the  earth  with  houses, 
and  with  furniture  and  utensils  of  the  grosser  sorts,  which  cannot 
so  well  be  brought  from  Europe.  Tolerably  good  workmen  in  any 
of  those  mechanic  arts  are  sure  to  find  employ,  and  to  be  well  paid 
for  their  work,  there  being  no  restraints  preventing  strangers  from 
exercising  any  art  they  understand,  nor  any  permission  necessary. 
If  they  are  poor,  they  begin  first  as  servants  or  journeymen;  and  if 
they  are  sober,  industrious,  and  frugal,  they  soon  become  masters, 
establish  themselves  in  business,  marry,  raise  families,  and  become 
respectable  citizens. 

Also,  persons  of  moderate  fortunes  and  capitals,  who,  having  a 
number  of  children  to  provide  for,  are  desirous  of  bringing  them  up 
to  industry,  and  to  secure  estates  for  their  posterity,  have  oppor- 
tunities of  doing  it  in  America,  which  Europe  does  not  afford.  There 
they  may  be  taught  and  practise  profitable  mechanic  arts,  without 
incurring  disgrace  on  that  account,  but  on  the  contrary  acquiring 
respect  by  such  abilities.  There  small  capitals  laid  out  in  lands, 
which  daily  become  more  valuable  by  the  increase  of  people,  afford 
a  solid  prospect  of  ample  fortunes  thereafter  for  those  children. 

III.   GRANTS  or  LAND  AND  LAND  TENURE 
A.   New  England  Laws  on  Inheritance,  1641  * 

These  laws  show  not  merely  the  effect  of  the  Mosaic  law  upon  the  legal  theories 
of  the  early  Pilgrims,  but  also  the  effect  of  common  land  holdings  in  England. 
It  took  some  time  for  them  to  adjust  their  theories  to  the  reality  of  practically 
unlimited  land  and  to  admit  unrestricted  private  property  in  land. 

CHAP.  IV. —  Of  the  right  of  Inheritance. 

i.  First,  Forasmuch  as  the  right  of  disposals  of  the  Inheritance 
of  all  Land?  in  the  Countrey,  lyeth  in  the  Generall  Court,  whatso- 
ever Land?  are  given  and  assigned  by  the  Generall  Court,  to  any 
Town  or  person  shall  belong  and  remaine  as  right  of  Inheritance  to 

1  An  Abstract  of  the  Lames  of  New  England  as  they  are  now  established  (London, 
1641).  In  Force,  Tracts  and  Other  Papers  (Washington,  1844),  III,  no.  ix,  8-10. 


EXPLORATION   AND    COLONIZATION  23 

such  Townes  and  to  their  successors,  and  to  such  persons  and  their 
heires  and  Assignes  as  their  propriety  for  ever. 

Whatsoever  Lands  belong  to  any  Town,  shall  be  given  and  as- 
signed by  the  Town  or  by  such  Officers  therein,  as  they  shall  appoint 
unto  any  person,  the  same  shall  belong  and  remaine,  unto  such  persons 
and  his  heires  and  assignes  as  his  proper  right  for  ever. 

3.  And  in  dividing  of  Lands  to  the  severall  persons  in  each  Town, 
as  regard  is  to  be  had  partly  to  the  number  of  the  persons  in  family: 
To  the  more  assigning  the  greater  allotment,  to  the  fewer  lesse,  and 
partly  by  the  number  of  beasts,  by  the  which  a  man  is  fit  to  occupy 
the  Land  assigned  to  him,  and  subdue  it:    Eminent  respect  (in  this 
case  may  be  given  to  men  of  eminent  quality  and  descent)  in  assign- 
ing unto  them  more  large  and  honorable  accommodations,  in  regard 
of  their  great  disbursements  to  publike  charges. 

4.  Forasmuch  as  all  Civill  affaires  are  to  be  administered  and 
ordered,  so  as  may  best  conduce  to  the  upholding  and  setting  forward 
of  the  worship  of  God  in  Church  fellowship.     It  is  therefore  ordered, 
that  wheresoever  the  Lands  of  any  mans  Inheritance  shall  fall,  yet  no 
man  shall  set  his  dwelling  house  above  the  distance  of  halfe  a  mile  or 
a  mile  at  the  furthest,  from  the  meeting  of  the  Congregation,  where 
the  Church  doth  usually  assemble  for  the  worship  of  God. 

5.  Inheritances  are  to  descend  naturally  to  the  next  of  kinne, 
according  to  the  Law  of  Nature,  delivered  by  God. 

6.  If  a  man  have  more  Sonnes  than  one,  then  a  double  portion 
to  be  assigned,  and  bequeathed  to  the  eldest  Son,  according  to  the 
Law  of  Nature,  unlesse  his  own  demerit  do  deprive  him  of  the  dig- 
nity of  his  Birth  right.  .  .  . 

B.   Advice  on  Granting  Lands,  1665  l 

These  suggestions  as  to  granting  land  in  a  new  country  are  significant,  for 
they  show  the  slight  value  that  attaches  to  the  land  and  the  paramount  necessity 
of  attracting  settlers.  Under  such  conditions  it  was  not  to  be  wondered  at  that 
large  grants  were  frequent.  Woodward  was  surveyor  for  the  proprietors  of 
Carolina. 

...  I  UNDERSTAND  by  Mr  Drummond  and  Mr  Carterett  that 
you  and  the  rest  of  the  Right  Honorable  the  Lords  Proprietors  of 
the  Province  of  Carolina  have  appointed  me  to  be  Surveyor  for 
your  Countie  of  Albemarle.  .  .  .  And  though  I  know  it  befitts  not 
me  to  dispute  your  commands  but  rather  to  operate  them  Coeca 
Obedientia  yet  (by  your  Honors  permission)  I  cannot  omit  to  per- 

1  Colonial  Records  of  North  Carotin*}.  Edited  by  W.  L.  Saunders  (Raleigh, 
1886),  I,  99-100. 


24  READINGS  IN  ECONOMIC  HISTORY 

forme  another  part  of  my  dutie  (so  I  am  though  unworthy)  one  of 
the  counsell  here  to  give  you  my  opinion  concerning  some  passages 
in  the  Instructions  your  Honore  sent  us.  ... 

Next  the  Proportione  of  Land  you  have  allotted  with  the  Rent, 
and  conditione  are  by  most  People  not  well  resented  and  the  very 
Rumor  of  them  dis-courages  many  who  had  intentions  to  have  re- 
moved from  Virginia  hether:  Whilst  my  Lord  Baltamore  allowed 
to  every  persons  imported  but  fif tie  acres ;  Maryland  for  many  yeares 
had  scarce  fiftie  families,  though  there  Rent  was  rather  easier  then  in 
Virginia;  but  when  he  allotted  one  hundred  Acres  for  a  Person,  it 
soone  began  to  People,  and  when  he  found  them  begin  to  increase, 
he  brought  it  to  fiftie  a  head  againe  So  if  your  Lordships  please  to 
give  large  Incouragement  for  some  time  till  the  country  be  more 
fully  Peopled,  your  Honore  may  contract  for  the  future  upon  what 
condition  you  please  But  for  the  Present,  To  thenke  that  any  men 
will  remove  from  Virginia  upon  harder  Conditione  then  they  can 
live  there  will  prove  (I  feare)  a  vaine  Imagination,  It  bein  Land 
only  that  they  come  for.  .  .  . 

And  it  is  my  Opinion,  (which  I  submitt  to  better  Judgments) 
that  it  will  for  some  time  conduce  more  to  your  Lordshipe  Profit 
to  permit  men  to  take  up  what  tracts  of  Land  they  please  at  an 
easie  rate,  then  to  stint  them  to  small  proportions  at  a  great  rent, 
Provided  it  be  according  to  the  custome  of  Virginia  which  is  fifty 
Pole  by  the  river  side,  and  one  mile  into  the  woods  for  every  hundred 
acres;  there  being  no  man  that  will  have  any  great  desire  to  pay- 
Rent  (though  but  a  farthing  an  acre)  for  more  land  than  he  hopes 
to  gaine  by.  Rich  men  (which  Albemarle  stands  in  much  need  of) 
may  perhaps  take  up  great  Tracts;  but  then  they  will  endeavour 
to  procure  Tenants  to  helpe  towards  the  payment  of  their  Rent, 
and  will  at  their  owne  charge  build  howseing  (which  poore  men  can- 
not compasse)  to  invite  them:  .  .  . 

C.   Grants  of  Land  by  Governors,  1774 l 

In  all  the  provinces  grants  of  land  had  been  made  by  the  governors  to 
colonists  and  others,  sometimes  improperly  and  upon  an  enormous  scale.  The 
information  contained  in  this  extract  was  collected  by  the  Board  of  Trade  to 
form  the  basis  of  new  instructions  to  the  governors  in  the  matter  of  granting 
land.  These  instructions  were  issued  in  1774. 

From  the  above  Extracts  and  Observations  it  appears  that  the 
Governors  derive  their  Power  of  granting  Lands  solely  from  their 

1  Public  Record  Office,  London.     Colonial  Office,  Papers,  5.      216.     pp.  5-7. 


EXPLORATION  AND   COLONIZATION  25 

Instructions,  that  these  Powers  differ  according  to  the  Circumstances 
of  the  different  Provinces,  and  that  some  of  the  Governors  have  no 
Power  to  grant  Lands: 

In  Virginia,  which  is  an  Old  and  well  peopled  Province,  the  Gov- 
ernor is  restrained  from  granting  more  than  1000  Acres  in  one  Grant 
to  one  Person.  In  Nova  Scotia  which  is  a  late  settled  Province  and 
where  the  Land  from  its  Northern  Situation  is  reckoned  not  so  valua- 
ble the  Governor  has  the  power  of  granting  the  enormous  Quantity 
of  100,000  Acres:  In  West  Florida  and  East  Florida  the  quantity 
is  20,000  Acres,  And  in  Granada  and  the  ceded  Islands  where  the 
Land  has  been  esteemed  extremely  valuable  the  Govr  has  no  Power 
of  granting  even  an  Acre,  this  Trust  being  thought  worthy  of  a  very 
expensive  manner  of  Sale  by  Commissioners  under  a  Special  Com- 
mission, to  the  Validity  of  whose  Grants  the  Consent  of  the  Governor 
is  however  requisite  in  the  first  Instance,  and  the  Confirmation  of 
the  Lords  Commissioners  of  the  Treasury  in  the  last. 

The  Power  of  granting  Lands  being  therefore  derived  from  the 
Instructions,  a  fresh  Instruction  may  either  increase,  diminish  or 
entirely  annul  the  Governors  Power  of  Granting  Lands. 

Method  of  Granting  Land  in  Pensylvania. 

Dr.  Franklin's  account  of  the  Method  of  granting  Lands  in  Pen- 
silvania. 

The  whole  lands  are  at  the  absolute  Disposal  of  the  Proprietor,  who 
grants  them  in  what  quantities  and  upon  what  Conditions  he  pleases. 
The  Method  which  has  been  generally  followed  hitherto  is  this 

The  Power  to  grant  Lands  has  been  given  to  the  Governor  by  a 
Special  Commission.  When  any  Person  applyes  for  a  Grant  there  is 
a  Warrant  for  a  Survey,  issued  from  the  Land  Office,  returnable  as 
soon  as  the  Lands  are  Surveyed.  The  quantity  expressed  in  the 
Warrant  never  exceeds  300  Acres.  The  patent  ought  to  be  made 
out  immediately  upon  return  of  the  Warrant,  but  this  is  sometimes 
allowed  to  lie  over  till  the  person  is  in  condition  to  pay.  The  Con- 
sideration required  by  the  Proprietor  is  £5  Sterling  per  hundred 
Acres  paid  down  and  8s.  4d.  Sterling  per  Annum  of  perpetual  quit 
rent.  Although  there  are  never  any  more  than  300  Acres  expressed 
in  the  Warrant,  yet  there  is  no  strict  limitation  provided  the  Grantee 
pays  for  the  whole  that  he  takes  up.  There  has  been  to  the  amount 
of  i  loo  Acres  Surveyed  and  held  under  one  Warrant. 

Upon  the  whole  the  Doctor  observes,  that  the  Lands  in  Pensilvania 
are  more  properly  sold  than  granted  by  the  Proprietor. 


26  READINGS  IN  ECONOMIC  HISTORY 


D.   Methods  of  Granting  Lands, 

This  discussion  of  the  older  and  newer  methods  of  granting  lands  in  North 
America  is  contained  in  a  paper  submitted  by  Captain  Williams  to  the  Earl  of 
Dartmouth,  November  18,  1773.  It  points  out  that  the  Crown  had  now  deter 
mined  to  sell  the  vacant  lands  rather  than  any  longer  to  give  them  away.  In  this 
way,  as  well  as  by  means  of  taxes,  the  colonies  were  to  be  made  to  contribute  to 
the  revenues  of  the  mother  country.  It  is  interesting  to  note  this  early  suggestion 
for  the  system  of  rectangular  surveys  afterwards  adopted  by  the  government  of 
the  United  States.  After  survey  and  division  the  lands,  under  this  system,  were 
auctioned  oft.  The  system  was  inaugurated  just  prior  to  the  Revolution,  but  tli3 
results  of  its  working  out  were  obscured  by  the  war. 

The  Spirit  of  emigration  to  North  America  being  now  so  prevail- 
ing in  Europe,  the  Immense  tracts  of  land  which  the  Crown  possesses 
in  that  Continent  are  of  Course  of  the  greatest  Importance,  and 
therefore  every  Step  ought  to  be  taken  to  regulate  every  thing  relative 
to  them,  to  prevent  the  great  Confusion  which  has  hitherto  attended 
the  grants  of  those  lands  and  establish  an  easier  and  more  certain 
Method  of  collecting  the  Quit  rents,  which  have  allways  fallen  short 
in  every  Province  of  what  they  really  ought  to  be. 

There  has  been  two  modes  of  granting  lands  in  North  America; 
In  the  first  and  oldest  the  Patents  only  specified  some  particular 
land  Marks  supposing  to  contain  so  many  acres  within  them  as  were 
intended  to  be  granted  to  the  person  or  persons  who  applied,  but 
they  generally  Contained  a  greater  quantity,  and  the  Quit  rents  of 
those  grants  are  lower  than  those  of  a  later  date; 

In  the  second  and  latest  Mode  an  exact  description  of  the  tract 
granted  is  given  in  the  Patent,  and  it  also  particularly  Specifies  the 
Number  of  acres  granted,  but  these  likewise  generally  contain  a 
greater  quantity  than  is  Specified,  as  Neither  the  Surveyor  General, 
or  his  Deputy  make  an  exact  Survey  of  those  tracts  before  the  Patents 
are  Issued  out;  and  altho'  the  Quit  rents  are  very  Small  in  propor- 
tion to  the  real  value  of  the  lands,  Yet  the  owners  do  Not  by  these 
means  pay  what  they  ought  to  do;  to  obviate  this  and  assertain  the 
exact  quantity  each  land  holder  ought  to  pay  for,  every  old  patent 
should  be  very  exactly  Survey'd  and  upon  such  a  Survey  every 
persons  being  found  to  have  a  greater  quantity  of  land  than  what 
their  "patents  Specify  should  be  obliged  to  give  up  the  overplus  or 
pay  for  every  acre  of  such  overplus  the  price  given  in  the  Province 
for  vacant  lands,  and  ever  afterwards  the  full  quit  rents  for  the  whole, 


Earl  of  Dartmouth  M SS.,  743. 


EXPLORATION  AND   COLONIZATION 


27 


A  Separate  draught  of  each  patent  should  be  Made  out  very  distinct 
and  accurate,  Sworn  to  by  the  Surveyor  General  or  his  Deputy, 
delivered  and  lodged  at  the  Council  Office,  after  which  an  exact  Map 
of  each  Province  distinquishing  every  patent  and  the  quantity  of 
lands  contained  in  each  should  be  made  out  from  the  Several  draughts 
and  delivered  at  the  Council's  Office  by  the  Surveyor  General;  No 
Patent  should  be  Issued  out  from  this  time  for  vacant  lands  but 
what  should  be  very  exactly  Survey'd  and  a  draught  of  such  a  Survey 
particularly  describing  and  Specifying  the  exact  quantity  of  acres  be 
attested  upon  Oath  by  the  Surveyor  General  or  his  Deputy  and 
annexed  to  the  Patent.  .  .  . 

NB,  as  Government  is  Come  to  a  determination  to  dispose  of  all 
vacant  lands  in  North  America  by  way  of  sale,  the  Crown's  revenue 
might  hereafter  be  considerably  encreased  by  having  the  Several 
tracts  laid  out  and  numbered  into  townships  of  twenty  thousand 
acres  each  as  in  the  draught  below,  then  every  other  Number  only 
should  be  disposed  of  at  first  at  a  low  rate,  untill  the  half  of  each 
tract  so  laid  out  is  granted,  keeping  and  reserving  to  the  Crown  the 
remaining  checkered  half  to  be  sold  hereafter,  and  which  the  first 
Settlers  as  well  as  New  ones  would  then  be  glad  to  purchase  at  a 
good  price  and  a  higher  quit  rent,  to  the  great  emolument  of  the 
Crown  who  would  also  by  this  means  settle  much  sooner  every  vacant 
tract  in  each  Province. 


II 


21 


7 


3 


5 


Draught  of  a  tract  of  land 
supposed  to  contain  five  hun- 
dred thousand  acres  devided 
into  twenty  five  townships  of 
twenty  thousand  acres  each 

thirteen  of  which  are  disposed    ^ 

of     Immediately     and     twelve 

reserved  to  be  sold  at  an  advanced  price,  as  for  example  13 
townships  sold  now  at  one  shilling  pr  acre  and  Subject  to  a  quit 
rent  of  f  per  hundred  acres  will  give  £13,000  and  £325  per  annum 
and  Supposing  that  in  ten  years  time  the  twelve  remaining  townships 
sell  only  at  the  rate  of  three  shillings  pr  acre  and  Subject  to  a  quit 
rent  of  three  pence,  will  give  £36,000  and  £3000  per  annum. 


CHAPTER  II 
AGRICULTURE,  INDUSTRY,  AND  TRADE,  1607-1763 

The  occupations  to  which  the  colonists  addressed  themselves  after  their  set- 
tlement in  America  may  be  divided  into  three  groups.  In  the  first  come  agri- 
culture, and  stock  raising  and  the  extractive  industries,  as  lumbering,  the  fur 
trade,  and  fishing.  To  these  the  colonists  turned  as  offering  the  quickest  and  most 
lucrative  reward  for  their  efforts.  The  soil  was  everywhere  rich  and  extremely 
productive,  while  necessity  dictated  resort  to  agriculture  to  secure  a  permanent 
subsistence.  Forest  and  water  teemed  with  life  and  offered  products  that  could 
be  secured  with  a  minimum  of  effort,  and,  what  was  quite  as  important,  with  a 
minimum  application  of  capital.  The  products  thus  obtained  were  moreover  in 
great  demand  in  Europe  and  could  be  easily  exchanged -there  for  the  manufactured 
goods  and  commodities  of  the  Old  World. 

The  second  group  of  occupations  were  those  that  called  for  a  larger  investment 
of  capital  and  more  time  and  labor  for  their  production.  Such  were  shipbuilding, 
manufacturing,  and  the  production  of  naval  stores.  While  the  last  was  closely 
allied  to  the  extractive  industries,  it  involved  considerable  skill  and  capital  to 
develop  it,  while  the  returns  were  rather  uncertain.  Consequently  all  of  these 
industries  were  developed  more  slowly  and  later  than  agriculture  and  the  extractive 
industries.  They  can  nourish  only  after  a  community  has  secured  for  itself  an 
assured  subsistence  and  has  begun  to  accumulate  capital. 

The  third  branch  of  industry  was  that  of  commerce,  or  the  exchange  of  the 
raw  materials  and  natural  products  of  the  New  World  for  the  manufactured  com- 
modities, textiles,  tools,  etc.,  of  the  industrially  more  developed  nations  of  Europe. 
In  this  trade  the  colonists  not  only  offered  their  products  for  exchange,  but  also 
acted  as  carriers  and  earned  large  profits  with  their  ships.  A  most  lucrative  branch 
of  this  trade  consisted  in  the  exchange  of  the  American  continental  products  for 
those  grown  in  the  warmer  climate  of  the  West  Indies. 

AGRICULTURE 
I.   METHODS  or  THE  INDIANS 

Indian  Agriculture  in  Virginia,  1612  1 

The  first  task  that  confronted  the  colonists  was  to  provide  themselves  with 
food,  and  in  solving  this  problem  they  were  greatly  assisted  by  observing  the 
practice  of  the  Indians  and  often  by  friendly  advice  from  them,  as  from  Poco- 
hontas  in  Virginia  and  Squanto  in  New  England.  In  planting  and  cultivating 
maize,  which  was  an  unfamiliar  grain,  but  one  upon  which  they  principally  relied 

1  Description  of  Virginia  and  Proceedings  of  the  Colonie.  By  Captain  John 
Smith  (Oxford,  1612).  In  Original  Narratives  of  Early  American  History.  Edited 
by  J.  F.  Jameson  (New  York,  1910),  IV  95-6-  Printed  by  permission  of  the 
editor  and  the  publishers,  Charles  Scribner's  Sons. 


AGRICULTURE,   INDUSTRY  AND  TRADE  29 

in  the  first  distressful  years,  they  followed  exactly  the  Indian  methods.     These  are 
described  for  us  by  John  Smith  in  Virginia. 

The  greatest  labour  they  take,  is  in  planting  their  corne,  for  the 
country  naturally  is  overgrowne  with  wood.  To  prepare  the  ground 
they  bruise  the  barke  of  the  trees  neare  the  roote,  then  do  they  scortch 
the  roots  with  fire  that  they  grow  no  more.  The  next  yeare  with  a 
crooked  peece  of  wood,  they  beat  up  the  woodes  by  the  rootes;  and 
in  that  moulds,  they  plant  their  corne.  Their  manner  is  this.  They 
make  a  hole  in  the  earth  with  a  sticke,  and  into  it  they  put  4  graines 
of  wheat  and  2  of  beanes.  These  holes  they  make  4  foote  one  from 
another.  Their  women  and  children  do  continually  keepe  it  with 
weeding,  and  when  it  is  growne  midle  high,  they  hill  it  about  like  a 
hop-yard. 

In  Aprill  they  begin  to  plant,  but  their  chiefe  plantation  is  in  May, 
and  so  they  continue  till  the  midst  of  June.  What  they  plant  in 
Aprill  they  reape  in  August,  for  May  in  September,  for  June  in 
October.  Every  stalke  of  their  corne  commonly  beareth  two  eares, 
some  3,  seldome  any  4,  many  but  one,  and  some  none.  Every  eare 
ordinarily  hath  betwixt  200  and  500  graines.  .  .  . 

II.  AGRICULTURE  IN  NEW  ENGLAND 

Poor  Farming  by  New  Englanders ,  177 5  l 

Agriculture  was  the  primary  industry  during  the  whole  of  the  colonial  period 
and  after  the  first  few  years  of  trial  offered  a  certain  and  comfortable  living  to  the 
colonist.  But  since  the  land  was  relatively  so  abundant  as  compared  with  labor 
and  capital  it  was  used  uneconomically  and  wastefully.  The  colonial  system  of 
agriculture  has  generally  been  called  a  system  of  "land  butchery,"  but  it  was 
natural  under  the  circumstances  and  economically  intelligible  if  not  altogether 
justifiable. 

A  careful  survey  of  American  agriculture  from  Nova  Scotia  to  Georgia  was 
made  in  1775  by  t,he  anonymous  author  of  American  Husbandry,  which  furnishes 
the  best  picture  we  have  of  conditions  as  they  existed  toward  the  end  of  the 
colonial  period.  We  may,  however,  accept  them  as  fairly  representative  of  condi- 
tions during  the  larger  part  of  this  period,  for  little  change  had  been  made  and  few 
improvements  introduced.  The  writer  describes  American  practices  carefully  and 
intelligently,  but  with  a  strong  prejudice  for  Old  World  methods.  He  is  most 
severe  in  his  criticism  of  New  England  methods  of  tillage  and  treatment  of  cattle, 
which  are  described  in  the  following  extract. 

The  crops  commonly  cultivated  are,  first  maize,  which  is  the 
grand  product  of  the  country,  and  upon  which  the  inhabitants  prin- 

1  American  Husbandry.  By  an  American  (London,  1775).  I,  50,  51-2, 
55-8,  80-1. 


30  READINGS  IN  ECONOMIC  HISTORY 

cipally  feed.  .  .  .  The  expences  of  this  culture  per  acre  have  been 

thus  stated. 

1.      s.   d. 

Seed o      o    6 

Culture o     n     8 

Harvesting,  &c o      3     6 

Conveyance  to  market o      4    6 

Sundries. .  026 


And  the  value,  straw  included,  amounts  to,  from  505.  to  4!. 
sterling,  per  English  acre,  which  is  certainly  very  considerable:  but 
then  their  management  in  other  respects  renders  the  culture  not  so 
cheap  as  it  may  appear  at  first  sight,  for  the  New  England  farmers 
practice  pretty  much  the  same  system  as  their  brethren  in  Canada; 
they  have  not  a  just  idea  of  the  importance  of  throwing  their  crops 
into  a  proper  arrangement,  so  as  one  may  be  a  preparation  for  another, 
and  thereby  save  the  barren  expence  of  a  mere  fallow.  Maize  is  a 
very  exhausting  crop;  scarce  anything  exhausts  the  land  more.  .  .  . 

Besides  maize,  they  raise  small  quantities  of  common  wheat;  but 
it  does  not  produce  so  much  as  one  would  apprehend  from  the  great 
richness  of  the  soil:  .  .  . 

Barley  and  oats  are  very  poor  crops,  yet  do  they  cultivate  both 
in  all  parts  of  New  England :  the  crops  are  such  as  an  English  farmer, 
used  to  the  husbandry  of  the  eastern  parts  of  the  kingdom,  would 
think  not  worth  standing;  this  I  attribute  entirely  to  climate,  for 
they  have  land  equal  to  the  greatest  productions  of  those  plants. 
Their  common  management  of  these  three  sorts  of  grain,  wheat, 
barley,  and  oats,  is  to  sow  them  chiefly  on  land  that  has  laid  fallow 
for  two  or  three  years,  that  is,  left  undisturbed  for  weeds  and  all 
sorts  of  trumpery  to  grow;  though  at  other  times  they  sow  oats  or 
barley  after  maize,  which  they  are  enabled  to  do  by  the  culture  they 
give  the  latter  plant  while  it  is  growing:  .  .  . 

Pease,  beans,  and  tares,  are  sown  variously  through  the  province, 
but  scarcely  anywhere  managed  as  they  are  in  the  well  cultivated 
parts  of  the  mother  country.  But  every  planter  or  farmer  grows 
£nough  of  the  food  for  fattening  hogs,  for  supplying  his  own  family, 
and  driving  some  fat  ones  to  market.  Hogs  are  throughout  the 
province  in  great  plenty,  and  very  large,  a  considerable  export  from 
the  province  constantly  goes  on  in  barrelled  pork,  besides  the  vast 
demand  there  is  for  the  fishery,  and  the  shipping  in  general. 


AGRICULTURE,   INDUSTRY  AND   TRADE  31 

Apples  may  be  mentioned  as  an  article  of  culture  throughout 
New  England,  for  there  is  no  farmer,  or  even  cottager,  without  a 
large  orchard:  some  of  them  of  such  extent,  that  they  make  three  or 
four  hundred  hogsheads  of  cyder  a  man;  besides  exporting  immense 
quantities  of  apples  from  all  parts  of  the  province.  The  orchards 
in  New  England  are  reckoned  as  profitable  as  any  other  part  of  the 
plantation.  .  .  . 

The  cattle  commonly  kept  here  are  the  same  as  in  Great  Britain: 
cows,  oxen,  horses,  sheep,  and  hogs;  they  have  large  dairies,  which 
succeed  quite  as  well  as  in  Old  England;  oxen  they  fat  to  nearly  as 
great  a  size;  their  mutton  is  good;  and  the  wool  which  their  sheep 
yield  is  long  but  coarse;  but  they  manufacture  it  into  coarse  cloths, 
that  are  the  common  and  only  wear  of  the  province,  except  the  gentry, 
who  purchase  the  fine  cloths  of  Britain:  no  inconsiderable  quantities 
of  these  coarse  New  England  cloths  are  also  exported  to  other  colonies, 
to  the  lower  people  of  whom,  especially  to  the  northward,  they  answer 
better  than  any  we  can  send  them.  The  horses  are  excellent,  being 
the  most  hardy  in  the  world;  very  great  numbers  are  exported  to 
the  West-Indies,  and  elsewhere.  .  .  . 

And  this  mention  of  cattle  leads  me  to  observe,  that  most  of  the 
farmers  in  this  country  are,  in  whatever  concerns  cattle,  the  most 
negligent  ignorant  set  of  men  in  the  world.  Nor  do  I  know  any  coun- 
try in  which  animals  are  wrorse  treated.  Horses  are  in  general, 
even  valuable  ones,  worked  hard,  and  starved:  they  plough,  cart, 
and  ride  them  to  death,  at  the  same  time  that  they  give  very  little 
heed  to  their  food;  after  the  hardest  day's  works,  all  the  nourish- 
ment they  are  like  to  have  is  to  be  turned  into  a  wood,  where  the 
shoots  and  weeds  form  the  chief  of  the  pasture;  unless  it  be  after 
the  hay  is  in,  when  they  get  a  share  of  the  after-grass.  A  New 
Englander  (and  it  is  the  same  quite  to  Pensylvania)  will  ride  his 
horse  full  speed  twenty  or  thirty  miles;  tye  him  to  a  tree,  while  he 
does  his  business,  then  re-mount,  and  gallop  back  again.  This  bad 
treatment  extends  to  draft  oxen;  to  their  cows,  sheep,  and  swine; 
only  in  a  different  manner,  as  may  be  supposed.  There  is  scarce 
any  branch  of  rural  ceconomy  which  more  demands  attention  and 
judgment  than  the  management  of  cattle;  or  one  which,  under  a 
judicious  treatment,  is  attended  with  more  profit  to  the  farmers  in  all 
countries;  but  the  New  England  farmers  have  in  all  this  matter 
the  worst  notions  imaginable. 

I  must,  in  the  next  place,  take  notice  of  their  tillage,  as  being 
weakly  and  insufficiently  given:  worse  ploughing  is  no  where  to  be 


32  READINGS  IN  ECONOMIC  HISTORY 

seen,  yet  the  farmers  get  tolerable  crops;  this  is  owing,  particularly 
in  the  new  settlements,  to  the  looseness  and  fertility  of  old  wood- 
lands, which,  with  very  bad  tillage,  will  yield  excellent  crops:  a 
circumstance  the  rest  of  the  province  is  too  apt  to  be  guided  by, 
for  seeing  the  effects,  they  are  apt  to  suppose  the  same  treatment 
will  do  on  land  long  since  broken  up,  which  is  far  enough  from  being 
the  case.  Thus,  in  most  parts  of  the  province,  is  found  shallow  and 
unlevel  furrows,  which  rather  scratch  than  turn  the  land;  and  of 
this  bad  tillage  the  farmers  are  very  sparing,  rarely  giving  two  plough- 
ings  if  they  think  the  crop  will  do  with  one ;  the  consequence  of  which 
is  their  products  being  seldom  near  so  great  as  they  would  be  under 
a  different  management.  Nor  are  their  implements  well  made,  or 
even  well  calculated  for  the  work  they  are  designed  to  perform:  .  .  . 


III.  AGRICULTURE  IN  THE  MIDDLE  COLONIES 
A.   Agriculture  in  New  York, 


In  the  more  genial  climate  and  richer  soil  of  the  Middle  Colonies  the  returns 
to  man's  cultivation  of  the  land  were  greater  than  they  were  in  New  England, 
and  there  was  a  greater  variety  of  agricultural  products.  The  author  of  American 
Husbandry  seems  impressed  by  these  facts  and  is  less  severe  in  his  criticisms  of 
prevailing  methods. 

Wheat  in  many  parts  of  the  province  [New  York]  yields  a  larger 
produce  than  is  common  in  England:  upon  good  lands  about  Albany, 
where  the  climate  is  the  coldest  in  the  country,  they  sow  two  bushels 
and  better  upon  one  acre,  and  reap  from  20  to  40:  the  latter  quantity, 
however,  is  not  often  had;  but  from  20  to  30  bushels  are  common, 
and  this  with  such  bad  husbandry  as  would  not  yield  the  like  in 
England,  and  much  less  in  Scotland.  This  is  owing  to  the  richness 
and  freshness  of  the  soil.  In  other  parts  of  the  province,  particularly 
adjoining  to  New  Jersey  and  Pensylvania,  the  culture  is  better  and 
the  country  more  generally  settled.  Though  there  are  large  tracts 
of  waste  land  within  twenty  miles  of  the  city  of  New  York. 

Rye  is  a  common  crop  upon  the  inferior  lands,  and  the  sort  they 
produce  is  pretty  good,  though  not  equal  to  the  rye  of  England. 
The  crops  of  it  are  not  so  great  in  produce  as  those  of  wheat  on  the 
better  lands. 

Maize  is  sown  generally  throughout  the  province,  and  they  get 
vast  crops  of  it.  ...  It  is  also  of  great  advantage  in  affording  a  vast 

1  American    Husbandry.      By    an    American    (London,    1775).     I,    98-103. 


AGRICULTURE,   INDUSTRY  AND   TRADE  33 

produce  of  food  for  cattle  in  the  winter,  which  in  this  country  is  a 
matter  of  great  consequence,  where  they  are  obliged  to  keep  all  their 
cattle  housed  from  November  till  the  end  of  March,  with  exception 
indeed  of  unprovident  farmers,  who  trust  some  out  the  chief  of  the 
winter,  to  their  great  hazard. 

Barley  is  much  sown  in  all  the  southern  parts  of  the  province; 
and  the  crops  they  sometimes  get  of  it  are  very  great,  but  the  grain 
is  not  of  a  quality  equal  to  that  of  Europe.  They  make  much  malt 
and  brew  large  quantities  of  beer  from  it  at  New  York,  which  serves 
the  home  consumption,  and  affords  some  also  for  exportation.  Pease 
are  a  common  article  of  culture  here,  and  though  uncertain  in  their 
produce,  yet  are  they  reckoned  very  profitable;  and  the  straw  is 
valued  as  whiter  food.  Thirty  bushels  per  acre  they  consider  as  a 
large  crop,  but  some  times  they  get  scarcely  a  third  of  that.  Oats 
they  sow  in  common,  and  the  products  are  generally  large;  sixty 
bushels  an  acre  have  been  known  on  land  of  but  moderate  fertility. 
Buckwheat  is  everywhere  sown,  and  a  few  crops  are  supposed  to  pay 
the  farmer  better,  at  the  same  tune  that  they  find  it  does  very  little 
prejudice  to  the  ground,  in  which  it  resembles  pease. 

Potatoes  are  not  common  hi  New  England,  but  in  New  York 
many  are  planted;  and  upon  the  black,  loose,  fresh  woodland  they 
get  very  great  crops,  nor  does  any  pay  them  better  if  so  well,  for  at 
the  city  of  New  York  there  is  a  constant  and  ready  market  for  them ; 
I  have  been  assured  that  from  five  to  eight  hundred  bushels  have 
been  often  gained  on  an  acre. 

There  are  many  very  rich  meadows  and  pastures  in  all  parts  of 
the  province;  and  upon  the  brooks  and  rivers,  the  watered  ones 
(for  they  are  well  acquainted  with  that  branch  of  husbandry)  are 
mown  twice  and  yield  large  crops  of  hay.  In  their  marshes  they  get 
large  crops  also,  but  it  is  a  coarse  bad  sort;  not  however  to  a  degree, 
as  to  make  cattle  refuse  it,  on  the  contrary,  the  farmers  find  it  of 
great  use  in  the  winter  support  of  their  lean  cattle,  young  stock,  and 
cows.  .  .  .  The  fruits  in  this  province  are  much  superior  to  those 
in  New  England;  and  they  have  some,  as  peaches  and  nectarines, 
which  will  not  thrive  there.  Immense  quantities  of  melons,  and  water 
melons  are  cultivated  in  the  fields  near  New  York,  where  they  come 
to  as  great  perfection  as  in  Spain  and  Italy ;  nor  can  it  well  be  conceived 
how  much  of  these  fruits  and  peaches,  &c.  all  ranks  of  people  eat  here, 
and  without  receiving  any  ill  consequence  from  the  practice.  This 
is  an  agreeableness  far  superior  to  any  thing  we  have  in  England; 
and  indeed,  the  same  superiority  runs  through  all  their  fruits,  and 


34 

several  articles  of  the  kitchen  garden,  which  are  here  raised  without 
trouble,  and  in  profusion.  Every  planter  and  even  the  smallest 
farmers  have  all  an  orchard  near  their  house  of  some  acres,  by  means 
of  which  they  command  a  great  quantity  of  cyder,  and  export  apples 
by  ship  loads  to  the  West  Indies.  Nor  is  this  an  improper  place  to 
observe  that  the  rivers  in  this  province  and  the  sea  upon  the  coast 
are  richly  furnished  with  excellent  fish;  oysters  and  lobsters  are  no 
where  in  greater  plenty  than  in  New  York.  I  am  of  opinion  they 
are  more  plentiful  than  at  any  other  place  on  the  globe;  for  very 
many  poor  families  have  no  other  subsistence  than  oysters  and  bread. 
Nor  is  this  the  only  instance  of  the  natural  plenty  that  distinguishes 
this  country:  the  woods  are  full  of  game,  and  wifd  turkies  are  very 
plentiful;  in  these  particulars  New  York  much  exceeds  New 
England. 

B.   Agriculture  in  New  Jersey,  1749  l 

The  same  wasteful  methods  that  characterized  colonial  agriculture  elsewhere 
were  noted  by  Peter  Kalm  in  New  Jersey  and  Pennsylvania.  Kalm  was  a  Swedish 
botanist  and  professor  of  economics  who  traveled  in  America  during  the  years 
1748  to  1751.  He  was  a  trained  and  accurate  observer  and  his  reports  are  the  most 
trustworthy  that  we  have. 

The  rye  grows  very  ill  in  most  of  the  fields  [m  New  Jersey],  which 
is  chiefly  owing  to  the  carelessness  hi  agriculture,  and  to  the  poorness 
of  the  fields,  which  are  seldom  or  never  manured.  After  the  inhabi- 
tants have  converted  a  tract  of  land  into  fields,  which  had  been  a 
forest  for  many  centuries  together,  and  which  consequently  had  a 
very  fine  soil,  tjiey  use  it  as  such,  as  long  as  it  will  bear  any  corn; 
and  when  it  ceases  to  bear  any,  they  turn  it  into  pastures  for  the 
cattle,  and  rake  new  corn-fields  in  another  place,  where  a  fine  soil  can 
be  met  with,  and  where  it  has  never  been  made  use  of  for  this  purpose. 
This  kind  of  agriculture  will  do  for  some  time;  but  it  will  afterwards 
have  bad  consequences,  as  every  one  may  clearly  see.  A  few  of 
the  inhabitants,  however,  treated  their  fields  a  little  better :  the  English 
in  general  have  carried  agriculture  to  a  higher  degree  of  perfection 
than  any  other  nation.  But  the  depth  and  richness  of  the  soil, 
which  those  found  here  who  came  over  from  England,  (as  they  were 
preparing  land  for  ploughing  which  had  been  covered  with  woods 
from  times  immemorial)  misled  them,  and  made  them  careless  hus- 


1  Travels  into  North  America.     By  Peter  Kalm.      (2d  ed.,  London,  1772.)     In 
Pinkerton's  Voyages  and  Travels,  XIII,  564-5,  410,  401. 


AGRICULTURE,   INDUSTRY  AND   TRADE  35 

bandmen.  .  .  .  They  had  nothing  to  do  but  to  cut  down  the  wood, 
put  it  up  in  heaps,  and  to  clear  the  dead  leaves  away.  They  could 
then  immediately  proceed  to  ploughing,  which  in  such  loose  ground 
is  very  easy;  and  having  sown  their  corn,  they  got  a  most  plentiful 
harvest.  This  easy  method  of  getting  a  rich  crop  has  spoiled  the 
English  and  other  European  inhabitants,  and  induced  them  to  adopt 
the  same  method  of  agriculture  which  the  Indians  make  use  of;  that 
is,  to  sow  uncultivated  grounds,  as  long  as  they  will  produce  a  crop 
without  manuring,  but  to  turn  them  into  pastures  as  soon  as  they  can 
bear  no  more,  and  to  take  in  hand  new  spots  of  ground,  covered  since 
time  immemorial  with  woods,  which  have  been  spared  by  the  fire 
or  the  hatchet  ever  since  the  creation.  This  is  likewise  the  reason 
why  agriculture,  and  the  knowledge  of  this  useful  branch,  is  so  im- 
perfect here,  that  one  can  learn  nothing  in  a  great  tract  of  land, 
neither  of  the  English,  nor  of  the  Swedes,  Germans,  Dutch,  and  French; 
except  that,  from  their  gross  mistakes  and  carelessness  for  futurity, 
one  finds  opportunities  every  day  of  making  all  sorts  of  observations, 
and  of  growing  wise  at  the  expence  of  other  people.  In  a  word, 
the  corn-fields,  the  meadows,  the  forests,  the  cattle,  &c.  are  treated 
with  great  carelessness  by  the  inhabitants.  We  can  hardly  be  more 
lavish  of  our  woods  in  Sweden  and  Finland  than  they  are  here :  their 
eyes  are  fixed  upon  the  present  gain,  and  they  are  blind  to  futurity. 
Every  day  their  cattle  are  harrassed  by  labour,  and  each  generation 
decreases  in  goodness  and  size,  by  being  kept  short  of  food,  as  I  have 
before  mentioned.  .  .  . 

IV.  AGRICULTURE  IN  THE  SOUTH 

A.   A  Colonial  Plantation,  1686  l 

The  following  description  of  a  Virginia  plantation  at  the  end  of  the  iyth  century 
was  written  by  Colonel  William  Fitzhugh,  a  prosperous  planter,  lawyer,  and  mer- 
chant. When  he  died  in  1701,  he  left  54,000  acres  of  land  and  many  slaves.  The 
importance  of  tobacco  is  clearly  shown  in  the  account  of  the  income  to  be  derived 
from  this  plantation. 

April  22nd,  1686. 
Doctr.  Ralph  Smith 

In  order  to  the  Exchange  you  promised  to  make  for  me  &  I  desire 
you  to  proceed  therein,  to  say  to  Exchange  an  Estate  of  Inheritance 

1  Letters  of  William  Fitzhugh.  In  the  Virginia  Magazine  of  History  and 
Biography  (Richmond,  1893),  I,  395-6.  Printed  by  permission  of  the  publisher, 
the  Virginia  Historical  Society. 


36  READINGS  IN  ECONOMIC  HISTORY 

in  land  there  [i.  e.  England]  of  two  or  three  hundred  pound  a  year, 
or  in  houses  in  any  town  of  three  or  four  hundred  pound  a  year,  I 
shall  be  something  particular  in  the  relation  of  my  concerns  here  that 
is  to  go  in  return  thereof.  As  first  the  Plantation  where  I  now  live 
contains  a  thousand  acres,  at  least  70x3  acres  of  it  being  rich  thicket, 
the  remainder  good  hearty  plantable  land,  without  any  waste  either 
by  marshes  or  great  swamps  the  commodiousness,  conveniency,  & 
pleasantness  yourself  well  knows,  upon  it  there  is  three  quarters  well 
furnished  with  all  necessary  houses;  grounds  and  fencing,  together 
with  a  choice  crew  of  negro's  at  each  plantation,  most  of  them  this 
country  born,  the  remainder  as  likely  as  most  in  Virginia,  there 
being  twenty  nine  in  all,  with  stocks  of  cattle  &  hogs  at  each  quarter, 
upon  the  same  land,  is  my  own  Dwelling  house  furnished  with  all 
accommodations  for  a  comfortable  &  gentile  living,  as  a  very  good 
dwelling  house  with  rooms  in  it,  four  of  the  best  of  them  hung  & 
nine  of  them  plentifully  furnished  with  all  things  necessary  &  con- 
venient, &  all  houses  for  use  furnished  with  brick  chimneys,  four 
good  Cellars,  a  Dairy,  Dovecot,  Stable,  Barn,  Henhouse,  Kitchen  & 
all  other  conveniencys  &  all  in  a  manner  new,  a  large  Orchard,  of 
about  2500  Aple  trees  most  grafted,  well  fenced  with  a  Locust  fence, 
which  is  as  durable  as  most  brick  walls,  a  Garden,  a  hundred  foot 
square,  well  pailed  in,  a  Yeard  wherein  is  most  of  the  foresaid  neces- 
sary houses,  pallizado'd  in  with  locust  Punchens,  which  is  as  good 
as  if  it  were  walled  in  &  more  lasting  than  any  of  our  bricks,  together 
with  a  good  Stock  of  Cattle,  hogs,  horses,  mares,  sheep,  &c.,  neces- 
sary servants  belonging  to  it,  for  the  supply  and  support  thereof. 
About  a  mile  &  half  distance  a  good  water  Grist  miln,  whose  tole  I 
find  sufficient  to  find  my  own  family  with  wheat  &  Indian  corn  for 
our  necessitys  &  occasions  up  the  River  in  this  country  three  tracts 
of  land  more,  one  of  them  contains  21996  acres,  another  500  acres,  & 
one  other  1000  acres,  all  good  convenient  &  commodious  Seats,  & 
wch  in  few  years  will  yield  a  considerable  annual  Income.  A  stock 
of  Tob°  with  the  crops  and  good  debts  lying  out  of  about  25oooolb 
besides  sufficient  of  almost  all  sorts  of  goods,  to  supply  the  family s  & 
the  Quarter's  occasion  for  two  if  not  three  years.  Thus  I  have  given 
you  some  particulars,  which  I  thus  deduce  the  yearly  crops  of  Corn 
and  Tob°  together  with  the  surplusage  of  meat  more  than  will  serve 
the  family's  use,  will  amount  annually  to  6oooolb  Tob°  Wch  at  10  shil- 
lings p  Cos  3oo£  p  annum,  &  the  negroes  increase  being  all  young  & 
a  considerable  parcel  of  breeders  will  keep  that  stock  good  for  ever. 
The  stock  of  Tob°  managed  with  an  inland  trade  will  yearly  yield 


AGRICULTURE,   INDUSTRY  AND   TRADE  37 

6oooolb  Tob°  without  hazard  or  risque,  which  will  be  both  clear 
without  charge  of  house  keeping  or  disbursements  for  servants  cloth- 
ing. The  Orchard  in  a  very  few  years  will  yield  a  large  supply  to 
plentifull  house  keeping  or  if  better  husbanded  yield  at  least  ioooolb 
Tob°  annual  income.  .  .  . 

To  Doctr.  Ralph  Smith  in  Bristol 

B.    Tobacco  Cultivation  in  Virginia,  1650  1 

As  early  as  the  middle  of  the  ryth  century  the  main  features  which  characterized 
the  growing  of  tobacco  were  evident  in  Virginia.  These  were  the  exhaustion  of  the 
soil,  the  lack  of  rotation  of  crops  or  of  fertilization  of  the  soil,  the  dispersion  of  the 
population,  and  the  necessity  of  a  large  amount  of  fresh  land  to  replace  that  which 
was  worn  out.  Clayton  was  an  English  clergyman  and  has  given  an  unusually 
intelligent  account  of  Virginia. 

But  not  to  ramble  after  here-say,  and  other  Matters;  but  to  return 
to  the  parts  of  Virginia  inhabited  by  the  English,  which  in  general 
is  a  very  fertile  Soil,  far  surpassing  England,  ...  for  the  generality 
of  Virginia  is  a  sandy  Land  with  a  shallow  Soil:  so  that  after  they 
have  clear'd  a  fresh  piece  of  Ground  out  of  the  Woods,  it  will  not 
bear  Tobacco  past  two  or  three  Years,  unless  Cow-pened;  for  they 
manure  their  Ground  by  keeping  their  Cattle,  as  in  the  South  you 
do  your  Sheep,  every  Night  confining  them  within  Hurdles,  which 
they  remove  when  they  sufficiently  dung'd  one  spot  of  Ground;  but 
alas!  they  cannot  improve  much  thus,  besides  it  produces  a  strong 
sort  of  Tobacco,  in  which  the  Smoakers  say  they  can  plainly  taste 
the  fulsomness  of  the  Dung.  Therefore  every  three  or  four  Years 
they  must  be  for  clearing  a  new  piece  of  Ground  out  of  Woods, 
which  requires  much  Labour  and  Toil,  it  being  so  thick  grown  all 
over  with  massy  Timber.  Thus  their  Plantations  run  over  vast 
Tracts  of  Ground,  each  ambitious  of  engrossing  as  much  as  they  can, 
that  they  may  be  sure  to  have  enough  to  plant,  and  for  their  Stocks 
and  Herds  of  Cattle  to  range  and  to  feed  in;  that  Plantations  of 
looo,  2000,  or  3000  Acres  are  common,  whereby  the  Country  is  thinly 
inhabited;  the  Living  solitary  and  unsociable;  Trading  confused 
and  dispersed;  besides  other  Inconveniences:  Whereas  they  might 
improve  200  or  300  Acres  to  more  Advantage,  and  would  make  the 
Country  much  more  healthy;  for  those  that  have  3000  Acres,  have 

1  A  Letter  from  Mr.  John  Clayton,  Rector  of  Crofton  at  Wakefield  in  Yorkshire, 
to  the  Royal  Society,  May  12, 1688.  In  Force,  Tracts  and  Other  Papers  (Washington, 
1844),  III,  no.  xii,  20-23,  passim. 


38  READINGS  IN  ECONOMIC  HISTORY 

scarce  cleared  600  Acres  thereof,  which  is  peculiarly  term'd  the 
Plantation,  being  surrounded  with  2400  Acres  of  Wood:  .  .  .  Now, 
you  must  know  they  top  their  Tobacco,  that  is,  take  away  the  little 
top  bud,  when  the  Plant  has  put  forth  as  many  Leaves  as  they  think 
the  richness  of  the  Ground  will  bring  to  a  Substance;  but  generally 
when  it  has  shot  forth  four  or  six  Leaves.  And  when  the  top-bud  is 
gone,  it  puts  forth  no  more  Leaves,  but  Side-branches,  which  they 
call  Suckers,  which  they  are  careful  ever  to  take  away,  that  they  may 
not  impoverish  the  Leaves. 

C.   Tobacco  the  Sole  Crop  in  Virginia,  1703 l 

For  a  century  after  the  settlement  of  Virginia  tobacco  was  cultivated  almost 
to  the  exclusion  of  every  other  agricultural  product. 

Colonel  Robert  Quary  to  the  Lords  of  Trade 

....  The  People  are  very  numerous  —  dispersed  through  the 
whole  province  [oi.  Virginia]  —  Their  almost  sole  business  is  plant- 
ing and  improving  Tobacco,  even  to  that  degree  that  most  of  them 
scarce  allow  themselves  time  to  produce  their  necessary  provision, 
and  consequently  take  little  leisure  to  busy  themselves  about  matters 
of  State.  .  .  . 

Your  Lordshipps' 

Most  obedient  servant 

(signed)  ROBT  QUARY 

D.   Diversified  Agriculture  in  Virginia,  1775  z 

By  the  second  third  of  the  i8th  century  the  exhaustion  of  the  tobacco  lands  of 
Virginia  and  Maryland  led  to  a  decline  in  the  cultivation  of  tobacco  and  the  adoption 
of  more  diversified  general  farming. 

As  to  fruit  trees,  they  have  all  those  which  are  known  to  us  in 
Europe  or  Pensylvania;  particularly,  apples,  pears,  cherries,  quinces, 
plums,  grapes,  peaches,  and  nectarines,  in  the  same  plenty  as  in 
Pensylvania,  so  as  to  be  applied  to  the  same  use  of  feeding  hogs  as 
there.  All  other  fruits  are  produced  here,  as  may  from  the  climate  be 
supposed. 


1  Documents  relative  to  the  Colonial  History  of  New  York.     Edited  by  E.  B. 
O'Callaghan  (Albany,  1856-87),  IV,  1051. 

2  American  Husbandry.     By  an  American    (London,  1775);  I,  219-20. 


AGRICULTURE,  INDUSTRY  AND  TRADE  39 

Besides  tobacco,  which  is  the  staple  of  these  colonies,  and  of  which 
I  shall  speak  more  by-and-by,  wheat  and  all  our  other  kinds  of  grain 
and  pulse  thrive  here  equally,  if  not  in  a  superior  degree,  to  any  of 
our  other  colonies;  .  .  .  and  in  these  articles  of  common  hus- 
bandry the  planters  have  increased  much  more  than  in  tobacco, 
for  reasons  which  I  shall  explain  hereafter. 

No  part  of  America,  or  indeed  of  the  world,  boasts  more  plentiful 
or  more  general  production  of  all  sorts  of  garden  vegetables;  and  in 
a  state  of  excellence  that  is  proportioned  to  the  heat  of  the  climate. 
The  same  remark  may  also  be  made  of  their  fish  and  fowl,  having 
every  sort  that  is  found  in  Pensylvania,  with  others  that  are  peculiar 
to  the  country;  being  in  all  respects  of  food  as  plentiful  as  any 
territory  in  the  world. 

E.   Cattle  in  South  Carolina,  77 j/  1 

Cattle  multiplied  rapidly,  even  when  uncared  for,  in  the  mild  climate  and 
plentiful  pasturage  of  South  Carolina.  Herds  of  a  thousand  cattle  or  more  were 
not  infrequent. 

The  Cattle  of  Carolina  are  very  fat  in  Summer,  but  as  lean  in 
Winter,  because  they  can  find  very  little  to  eat,  and  have  no  Cover 
to  shelter  them  from  the  cold  Rains,  Frosts,  and  Snows,  which  lasts 
sometimes  3  or  4  Days:  Only  the  Cattle  design'd  for  the  Butchery 
are  fed,  and  they  bad  enough,  with  Potatoes,  Straw,  and  Grain; 
but  they  always  lie  in  the  open  Field,  for  there  is  not  one  Hovel  in 
all  the  Country,  either  for  Oxen  or  Cows.  If  you  object  this  to  the 
Planters,  they  answer,  that  such  Houses  or  Hovels  would  do  very 
well,  but  that  they  have  too  many  other  Affairs  to  think  of  that. 
The  last  Winter  being  very  severe  about  10,000  horned  Cattle  died 
of  Hunger  and  Cold.  Notwithstanding  this,  the  People  will  not 
change  their  Conduct,  because  they  do  not  understand  the  manner 
of  ordering  Cattle,  nor  even  know  how  to  mow  the  Grass,  in  order 
to  make  it  into  Hay,  of  which  they  might  have  great  Plenty  for  Fodder. 
Their  Ignorance  in  this  respect  is  very  great,  which  is  the  Reason  that 
Butter  is  always  dear,  being  sold  last  Winter  at  75.  6d.  per  Pound, 
and  in  January  and  February  last  it  was  sold  at  Charles  Town  for 
125.  per  Pound:  In  a  word,  nothing  would  be  more  easy  than  for 
Persons  who  understand  Country  Affairs  to  grow  rich  in  a  little  time. 
There  is  so  great  a  number  of  Cattle,  that  a  certain  Planter  had  last 

1  A  Description  of  the  Province  of  South  Carolina.  By  J.  P.  Purry  et  al.  In 
Force,  Tracts  and  Other  Papers  (Washington,  1837),  II,  no.  xi,  8-9. 


40  READINGS  IN  ECONOMIC  HISTORY 

Spring  200  Calves  marked,  which  he  let  run  in  the  Woods  with 
other  Cattle;  Nobody  looks  after  them,  or  takes  any  other  Care, 
but  to  bring  them  together  in  the  Evening  to  He  hi  a  Park  near  the 
House. 

At  certain  times  they  kill  a  great  many  to  send  the  Flesh  salted 
to  several  other  Colonies,  where  there  is  little  Pasturage,  particularly 
to  the  Isles  of  Antilles,  and  in  general  to  all  those  of  the  Torrid 
Zone, 

Horses,  the  best  Kind  in  the  World,  are  so  plentiful,  that  you 
seldom  see  any  body  travel  on  foot,  except  Negroes,  and  they  oftner 
on  horseback;  so  that  when  a  Taylor,  a  Shoemaker,  or  any  other 
Tradesman,  is  obliged  to  go  but  3  Miles  from  his  House,  it  would  be 
very  extraordinary  to  see  him  travel  on  foot. 

There  is  likewise  in  this  Country  a  prodigious  number  of  Swine, 
which  multiply  infinitely,  and  are  kept  with  very  little  Charge, 
because  they  find  almost  all  the  Year  Acorns,  of  which  there  is  5  or  6 
sorts,  as  also  Nuts,  Walnuts,  Chesnuts,  Herbs,  Roots,  6*c.  in  the 
Woods:  So  that  if  you  give  them  neverso  little  at  Home  they  become 
fat;  after  which  you  may  salt  and  send  great  quantities  of  them  to 
the  Isles  of  Barbadoes,  St.  Christophers,  Jamaica,  &c.  which  produced 
very  good  Returns  either  in  Money  or  Merchandizes. 

Of  all  Animals  in  that  Country,  none  are  a  less  Charge  than  Sheep, 
for  they  subsist  only  on  what  they  find  in  the  Fields;  yet  are  always 
in  good  Case,  and  bring  forth  their  Lambs  regularly;  and  there  is 
a  particular  sort,  whose  Wool  is  not  inferiour  to  the  finest  Spanish 
Wool. 

F.   Agriculture  and  Stock-raising  in  North  Carolina,  1775  1 

The  practice  of  an  orderly  agriculture  had  not  progressed  very  far  in  North 
Carolina,  even  by  the  end  of  the  colonial  period.  The  bounty  of  nature  and  the 
vast  extent  of  land  made  careful  and  systematic  methods  of  culture  or  care  of  cattle 
seem  unnecessary  to  the  colonist,  and  he  consequently  adopted  wasteful  and 
extravagant  practices.  These  are  described  by  our  best  if  severest  critic. 

The  products  of  North  Carolina  are  rice,  tobacco,  indigo,  cotton, 
wheat,  peas,  beans,  Indian  corn,  and  all  sorts  of  roots,  especially 
potatoes.  Rice  is  not  so  much  cultivated  here  as  in  South  Carolina; 
but  in  the  latter  they  raise  no  tobacco,  whereas  in  North  Carolina 
it  is  one  of  their  chief  articles.  It  grows  in  the  northerly  parts  of  the 

1  American  Hmbandry.  By  an  American  (London,  1775),  I,  331-2,  337-8, 
349- 


AGRICULTURE,   INDUSTRY  AND   TRADE  41 

province,  on  the  frontiers  of  Virginia,  from  which  colony  it  is  ex- 
ported. Indigo  grows  very  well  in  the  province,  particularly  in  the 
southern  parts,  and  proves  a  most  profitable  branch  of  culture. 
Cotton  does  very  well,  and  the  sort  is  so  excellent,  that  it  is  much  to 
be  wished  they  had  made  a  greater  progress  in  it.  The  greatest 
articles  of  their  produce  which  is  exported  are  tar,  pitch,  turpentine, 
and  every  species  of  lumber,  in  astonishing  quantities.  .  .  . 

The  two  great  circumstances  which  give  the  farmers  of  North 
Carolina  such  a  superiority  over  those  of  most  other  colonies,  are, 
first,  the  plenty  of  land;  and,  secondly,  the  vast  herds  of  cattle 
kept  by  the  planters.  The  want  of  ports,  as  I  said,  kept  numbers 
from  settling  here,  and  this  made  the  land  of  less  value,  consequently 
every  settler  got  large  grants;  and,  falling  to  the  business  of  breeding 
cattle,  their  herds  became  so  great,  that  the  profit  from  them  alone 
is  exceeding  great.  It  is  not  an  uncommon  thing  to  see  one  man 
the  master  of  from  300  to  1200,  and  even  to  2000  cows,  bulls,  oxen, 
and  young  cattle;  hogs  also  in  prodigious  numbers.  Their  manage- 
ment is  to  let  them  run  loose  in  the  woods  all  day,  and  to  bring  them 
up  at  night  by  the  sound  of  a  horn:  sometimes,  particularly  in 
winter,  they  keep  them  during  the  night  in  enclosures,  giving  them 
a  little  food,  and  letting  the  cows  and  sows  to  the  calves  and  pigs; 
this  makes  them  come  home  the  more  regularly.  Such  herds  of  cattle 
and  swine  are  to  be  found  in  no  other  colonies;  and  when  this  is 
better  settled,  they  will  not  be  so  common  here;  for  at  present  the 
woods  are  all  in  common,  and  people's  property  has  no  other  boundary 
or  distinction  than  marks  cut  in  trees,  so  that  the  cattle  have  an 
unbounded  range;  but  when  the  country  becomes  more  cultivated, 
estates  will  be  surrounded  by  enclosures,  and  consequently  the  numbers 
of  cattle  kept  by  the  planters  will  be  proportioned  to  their  own  lands 
only.  .  .  . 

The  system  pursued  here  is  as  faulty  as  in  most  other  parts  of 
America;  it  consists  in  cropping  the  land  with  tobacco  as  long  as  it 
will  bear  it;  then  they  will  take  two  crops  of  maize,  and  after  that 
throw  in  wheat,  peas,  &c.  for  several  years  longer;  after  which  they 
leave  the  land  to  become  forest  again;  as  fast  as  they  want  more, 
they  take  it  from  the  old  woodland,  serving  it  in  the  same  manner. 
It  is  owing  to  this  wretched  system  that  many  of  their  corn-fields 
are  so  full  of  weeds,  that  in  some  it  is  difficult  to  know  what  is 
the  crop. 


42  READINGS  IN  ECONOMIC  HISTORY 

INDUSTRY 
I.   GENERAL  DESCRIPTION 

State  of  the  British  Plantations  in  America,  in  1721 l 

A  detailed  account  of  the  boundaries,  government,  population,  products, 
industries,  militia,  and  revenue  of  the  various  American  colonies  for  the  year  1721 
was  furnished  in  an  elaborate  report  of  the  Lords  Commissioners  for  Trade  and 
Plantations.  Those  parts  only  which  relate  to  the  population,  products,  and 
industries  are  here  reprinted. 

Copy  of  a  Representation  of  the  Lords  Commissioners  for  Trade 
and  Plantations  to  the  King  upon  the  State  of  His  Majesties 
Colonies  &  Plantations  on  the  Continent  of  North  America, 
dated  September  the  8th  1721. 

To  the  KING'S  MOST  EXCELLENT  MAJESTY. 
May  it  please  your  Majesty. 

In  obedience  to  your  Majesty's  commands,  we  have  prepared 
the  following  state  of  your  Majesty's  Plantations  on  the  Continent 
of  America;  wherein  we  have  distinguished  their  respective  situations, 
Governments,  strengths  and  Trade,  and  have  observed  of  what 
importance  their  Commerce  is  to  Great  Britain,  .  .  . 

Your  Majesty's  Plantations  on  the  Continent  of  America, 
beginning  from  the  North,  are  Nova  Scotia,  New  Hampshire, 
Massachusetts,  Rhode  Island,  Connecticut,  New  York,  New  Jersey, 
Pensylvania,  Maryland,  Virginia,  &  Carolina.  .  .  . 

NEW  HAMPSHIRE 

....  Lumber,  Fish,  Masts  for  the  Royal  Navy,  &  Turpentine  are 
the  chief  produce  of  this  Province;  they  build  some  ships,  but  not 
so  many  since  the  last  war  as  before;  they  have  some  mines,  which 
produce  very  good  Iron,  tho'  but  little  of  it  hath  been  hitherto  forged; 
there  are  likewise  great  quantities  of  Stone,  in  which  'tis  believed 
there  may  be  silver.  The  annual  produce  of  these  commodities  is 
very  uncertain,  the  price  falling  &  rising  according  to  the  demand 
there  is  for  them,  seldom  exceeding  £50,000  per  Annum  of  New 
England  money. 

This  Province  would  produce  hemp  &  flax  if  proper  encourage- 
ment were  given  for  it,  &  the  people  had  good  seed  for  the  first  sowing. 

1  Documents  relative  to  the  Colonial  History  of  the  State  of  New  York.  Edited 
by  E.  B.  O'Callaghan  (Albany,  1855),  V,  591-630. 


AGRICULTURE,   INDUSTRY  AND  TRADE  43 

They  export  their  Lumber,  &  some  part  of  their  fish  to  the  neigh- 
bouring Governments  of  the  West  Indies,  &  to  the  Western  Islands, 
from  whence  they  get  their  Wines.  They  likewise  have  sent  some 
Lumber,  tar  &  Turpentine  of  late  to  this  Kingdom,  in  exchange  for 
linnen  &  woolen  manufactures;  but  they  have  some  supplies  of  this 
kind  from  Ireland  also,  either  directly  or  by  way  of  other  plantations. 
Their  best  &  most  merchantable  fish  is  exported  to  Portugal  &  Italy 
&  the  produce  of  it  generally  remitted  to  this  Kingdom  except  what  is 
returned  in  Salt  for  the  fishery. 

Their  fishing  is  much  increased  since  the  Peace  with  France,  but 
the  Lumber  trade  decreased,  by  reason  of  the  low  price  it  bears  in 
the  West  Indies,  &  the  little  encouragement  there  is  to  send  it  to  this 
Kingdom,  because  of  the  duties  on  that  commodity  here. 

The  Ships,  trading  directly  from  this  Province  to  foreign  parts, 
are  now  very  few,  not  exceeding  20  in  number,  but  they  have  about 
loo  fishing  vessels,  &  the  number  of  sea  faring  men  is  near  400,  tho' 
many  of  them  not  settled  Inhabitants  there;  and  there  are  no  manu- 
factures carried  on  in  this  Province.  . 


....  The  products  of  this  Country  proper  for  the  consumption 
of  this  Kingdom,  are  timber,  turpentine,  tar  &  pitch,  masts,  pipe  & 
hogshead  staves,  whale  fins  &  oil,  &  some  furs.  They  supply  Spain, 
Portugal,  &  the  West  Indies  with  considerable  quantities  of  fish  & 
Lumber.  We  are  likewise  informed,  that  they  have  mines  of  several 
kinds,  which  might  be  wrought  upon  proper  encouragement. 

Their  Trade  to  the  foreign  plantations  in  America  consists  chiefly 
in  the  Exportation  of  Horses  to  Surinam,  and  (as  we  are  informed)  to 
Martinico,  &  the  other  french  Islands,  which  is  a  very  great  discour- 
agement to  the  Sugar  planters  hi  the  British  Islands;  for  without 
these  supplies,  neither  the  french  nor  the  Dutch  could  carry  on  their 
sugar  works  to  any  great  degree;  &  in  return  for  their  Horses,  they 
receive  Sugar,  molasses  &  rum. 

In  this  Province  there  are  all  sorts  of  Common  Manufactures. 
The  Inhabitants  have  always  worked  up  their  own  wool  into  coarse 
Cloths,  druggets,  &  serges;  but  these,  as  well  as  their  homespun  lin- 
nen, which  is  generally  half  cotton,  serve  only  for  the  use  of  the 
meanest  sort  of  people.  A  great  part  of  the  Leather  used  in  the 
Country  is  also  manufactured  among  themselves;  some  hatters  have 
lately  set  up  their  trade  in  the  principal  Towns;  &  several  Irish 
families,  not  long  since  arrived,  &  settled,  to  the  Eastward,  make 


44  READINGS  IN  ECONOMIC  HISTORY 

good  Linnen  &  diaper;  however,  the  excessive  price  of  labour  enhances 
the  value  of  all  their  manufactures. 

It  is  therefore  to  be  presumed  that  necessity,  &  not  choice,  has 
put  them  upon  erecting  manufactures;  not  having  sufficient  commodi- 
ties of  their  own  to  give  hi  exchange  for  those  they  do  receive  already 
from  Great  Britain;  &  the  most  natural  method  of  curing  this  evil 
would  be  to  allow  them  all  proper  encouragement  for  the  Importation 
of  Naval  Stores,  &  minerals  of  all  kinds. 

The  branch  of  Trade  which  is  of  the  greatest  importance  to  them, 
&  which  they  are  best  enabled  to  carry  on,  is  the  building  of  Ships, 
Sloops,  &c.  And  according  to  our  advices  from  thence,  they  have 
annually  launched  from  140  to  160  vessels  of  all  sorts,  which  at  40 
tons  one  with  another,  amount  to  6000  Tons;  &  altho'  the  greatest 
part  are  built  for  account  of,  or  sold  to  the  Merchants  of  this  King- 
dom, &  in  the  plantations,  nevertheless  there  belongs  to  this  Province 
about  190  sail,- which  may  contain  8,000  tons,  &  are  navigated  with 
about  1,100  men,  besides  150  boats,  with  600  men,  employed  in  the 
fisheries  on  their  own  Coast. 

Their  Iron  works  which  were  erected  many  years  past,  furnish 
them  with  small  quantities  of  iron  for  common  use,  but  the  iron 
imported  from  this  Kingdom,  being  esteemed  much  better,  is  generally 
used  in  their  shipping.  .  .  . 

RHODE   ISLAND 

....  As  to  the  number  of  inhabitants  in  this  Colony  their 
trade  &  state  of  their  Government,  we  have  but  very  imperfect 
accounts;  &  indeed  the  Misfeazances  of  this  &  most  of  the  other 
proprietary  Governments  are  so  numerous,  that  we  shall  not  trouble 
your  Majesty  with  them  in  this  place,  but  will  take  leave  to  give  our 
humble  opinion  concerning  them  in  the  concluding  part  of  this 
representation. 

CONNECTICUT 

....  This  government  is  upon  the  same  foot  as  Rhode  Island, 
under  the  same  regulations  of  Government,  &  liable  to  the  same 
inconveniences. 

NEW   YORK 

....  The  natural  produce  of  this  Country  consists  in  provisions, 
which  are  sent  to  the  British  Islands  in  the  West  Indies;  in  Horses 
sent  to  Surinam,  Curacoa,  &  S*  Thomas,  &  in  Whale-oil,  &  peltry  tc 
this  Kingdom;  besides  some  Naval  stores,  which  this  Country  is 


AGRICULTURE,   INDUSTRY  AND  TRADE  45 

capable  of  producing  in  very  great  quantities,  if  proper  measures 
were  taken  for  this  purpose.  .  .  . 

This  province  could  likewise  furnish  iron  in  great  quantities.  It 
has  some  Copper  &  lead,  but  at  a  great  distance  from  the  British, 
&  amongst  the  Indian  Settlements.  There  are  Coal  Mines  in  Long 
Island,  which  has  not  yet  been  wrought. 

The  several  Commodities,  exported  from  this  Kingdom  to  New 
York,  have  at  a  medium  of  three  years,  commonly  amounted  to  about 
£50,000  a  year.  The  imports  from  thence  have  not,  upon  the  same 
medium,  risen  higher  than  £16,000  a  year;  so  that  the  balance  in 
favour  of  this  Kingdom,  as  far  as  can  be  judged  of  it  by  the  Custom 
house  accounts,  has  been  upwards  of  £25,000  a  year. 

The  Vessels  belonging  to  this  province  are  small,  &  not  consider- 
able in  number;  being  employed  only  in  carrying  provisions l  to 
the  Southern  Islands,  and  in  the  coasting  trade  to  the  Neighbouring 
colonies  on  the  Continent. 

The  number  of  the  inhabitants  in  this  province  increases  daily; 
chiefly  from  New  England,  &  from  the  North  of  Ireland.  The 
militia  consists  of  6000  men.  .  .  . 

NEW  JERSEY 

....  This  province  produces  all  sorts  of  grain  or  corn,  the 
inhabitants  likewise  breed  all  sorts  of  Cattle,  in  great  quantities, 
with  which  they  supply  the  Merchants  of  New  York  &  Philadelphia, 
to  carry  on  their  trade,  to  all  the  American  Islands;  but  were  they 
a  distinct  Government,  (having  very  good  harbours)  merchants 


1  [A  later  report  (New  York  Col.  Doc.,  V,  686.)  explained  more  fully  what 
was  included  in  this  item,  "provisions":] 

The  Staple  Commodity  of  the  Province  is  Flower  &  Bread,  which  is  sent  to  all 
Parts  of  the  West  Indies  we  are  allowed  to  trade  with,  Besides  Wheat,  Pipe  Staves 
&  a  little  Bees  Wax  to  Madeira.  We  send  likewise  a  considerable  quantity  of  Pork, 
Bacon,  Hogshead  Staves,  some  Beef  Butter  &  a  few  Candles  to  the  West  Indies. 
The  great  bulk  of  our  Commoditys  in  proportion  to  their  value,  is  the  reason  we 
cannot  Trade  directly  to  the  Spanish  Coast  as  they  do  from  the  West  Indies  it  being 
necessary  to  employ  armed  vessels  to  prevent  Injuries  from  the  Spaniards  &  Pirates 
but  we  sometimes  send  vessels  into  the  Bays  of  Campechie  &  Honduras,  to  purchase 
Logwood  &  we  have  it  imported  from  thence  frequently  by  Strangers.  This 
commodity  is  entirely  exported  again  for  England.  .  .  . 

Several  of  our  Neighbours  up  on  the  continent  cannot  well  subsist  without 
our  assistance  as  to  Provisions  for  we  yearly  send  Wheat  &  Flower  to  Boston  & 
Road  Island  as  well  as  to  South  Carolina  tho  in  any  great  quantity  Pensylvania 
only  rivals  us  in  our  Trade  to  the  West  Indies,  but  they  have  not  that  Credit  in 
their  Manufactures  that  this  Province  has. 


46  READINGS  IN  ECONOMIC  HISTORY 

would  be  encouraged  to  settle  amongst  them,  &  they  might  become 
a  considerable  trading  people;  whereas,  at  present,  they  have  few 
or  no  ships,  but  coasting  vessels,  &  they  are  supplied  from  New  York 
&  Philadelphia  with  English  Manufactures  having  none  of  their 
own. 

The  Inhabitants  daily  increase  in  great  numbers  from  New  Eng- 
land &  Ireland;  and  before  this  increase,  the  militia  consisted  of 
about  3000  men.  .  .  . 

PENNSYLVANIA 

....  The  natural  produce  of  this  Country  is  wheat,  beef,  pork, 
&  lumber.  Their  Trade  consequently  consists  chiefly  in  the  exporta- 
tion of  these  to  the  several  parts  of  the  west  Indies,  &  Madieras; 
from  whence;  in  return,  they  take  rum,  sugar,  Cotton,  Spanish 
money,  &  wine.  They  likewise  build  many  Brigantines  &  Sloops 
for  sale;  but  having  few  or  no  manufactures  of  their  own,  they  are 
supplied  therewith  from  Great  Britain,  to  the  yearly  value  of  about 
2o,ooo£.  And  as  this  province  does  greatly  abound  in  iron,  so 
we  have  good  grounds  to  believe,  that,  if  proper  encouragement 
was  given  in  Great  Britain,  to  take  off  that,  &  their  timber,  the  people 
would  thereby  be  diverted  from  the  thoughts  of  setting  up  any  manu- 
factures of  their  own,  &  consequently  the  consumption  of  those  of 
Great  Britain  considerably  advanced.  For  it  must  be  observed,  that 
this  Plantation  .is  in  a  very  flourishing  condition;  greatly  increased  in 
its  inhabitants;  &  altho'  the  informations  we  have  received  touching 
their  numbers,  differ  extremely,  some  computing  them  at  about 
60,000  whites  &  5,000  blacks,  &  others  not  above  half  that  number; 
yet  they  all  agree  in  their  opinion,  concerning  the  flourishing  state  of 
this  Colony,  &  that  the  produce  of  their  commodities  may  well  be 
reckoned  at  ioo,ooo£  per  Annum. 

Four  fifths  of  the  inhabitants  of  this  province  being  Quakers, 
there  is  little  care  taken  of  their  Military  affairs.  .  .  . 

MARYLAND 

....  The  number  of  Inhabitants  was  computed  in  the  year 
1704.  to  be  30,537  men,  women  &  children,  &  4,475  slaves  young  & 
old,  in  all  35,012. 

In  the  year  1710  was  computed  34,796,  whites,  &  7,935  negroes, 
in  all  42,741. 

And  in  the  year  1719.  was  computed  55,000  white  inhabitants, 
&  25,000  blacks,  in  all  80,000. 


AGRICULTURE,   INDUSTRY  AND   TRADE  47 

From  whence  it  appears,  that  the  Inhabitants  of  this  province 
have  increased  to  above  double  the  number  in  15  years,  &  altho' 
some  part  of  this  increase  may  have  been  occasioned  by  the  trans- 
portation of  the  rebels  from  Preston,  by  the  purchase  of  slaves,  as 
well  as  by  the  arrival  of  several  convict  persons,  &  of  many  poor 
families,  who  have  transported  themselves  from  Ireland;  yet  it  must 
be  allowed,  that  Maryland  is  one  of  the  most  flourishing  provinces 
upon  the  Continent  of  America.  .  .  . 

Tobacco  is  the  staple  commodity  of  this  province  of  which  about 
30.  or  35,000  hogsheads  are  yearly  exported  to  Great  Britain.  The 
inhabitants  export  some  tobacco  to  the  other  plantations,  as  also 
grain,  beef,  pork,  &  lumber,  for  which  they  have  in  return  rum  & 
sugar. 

They  likewise  send  some  corn  to  the  Madeiras  for  wine,  but  the 
most  part  of  the  wine  they  have  from  thence  is  purchased  by  bills 
of  Exchange. 

Whilst  tobacco  answers,  in  its  price,  the  planter's  labour,  all 
manufactures,  &  all  other  trade,  that  might  arise  from  the  product 
of  the  Country  are  laid  aside. 

The  Inhabitants  wear  the  like  cloathing,  &  have  the  same  furni- 
ture within  their  houses  with  those  in  this  Kingdom.  The  Slaves 
are  cloathed  with  Cottons,  Kerseys,  flannel,  &  coarse  linnens,  all 
imported;  &  it  is  computed  that  this  province  consumes  of  British 
Manufactures  to  the  value  of  £20,000  per  annum. 

No  mines  are  yet  discovered  here,  except  iron,  which  are  very 
common,  but  not  wrought,  for  want  of  a  sufficient  stock,  &  persons 
of  skill  to  engage  in  such  an  undertaking. 

The  number  of  ships  belonging  to  this  province,  are  only  four  small 
Brigantines,  &  not  more  than  20  Sloops  for  the  Sea;  the  inhabitants 
not  being  inclined  to  navigation,  but  depending  upon  British  bot- 
toms for  the  exportation  &  importation  of  the  bulk  of  their  trade; 
&  there  has  been  employed  of  late  years  above  100  sail  of  ships  from 
Great  Britain. 

VIRGINIA 

....  The  principal  product  of  Virginia  is  tobacco;  &  in  general 
it's  of  a  better  quality  than  that  of  Maryland.  Before  the  conclusion 
of  the  last  peace  with  France,  the  Virginia  planters  exported  to  this 
Kingdom  at  least  30,000  hogsheads  per  Annum;  but  about  that  time, 
the  trade  declining,  for  want  of  foreign  consumption,  an  Act  was 
passed  in  the  12th  of  Her  late  Majesty's  reign  for  encouraging  the 


48  READINGS  IN  ECONOMIC  HISTORY 

tobacco  trade,  &  your  Majesty  hath  been  since  graciously  pleased 
to  give  your  Royal  Assent  to  an  Act  for  continuing  the  same.  .  .  . 

The  other  branches  of  the  trade  between  this  kingdom  &  Virginia 
consist  in  pitch  &  tar,  pipe  &  hogshead  staves,  skins  &  furrs,  &  a  few 
drugs.  They  also  export  to  the  other  Plantations  some  small  quanti- 
ties of  tobacco,  provisions,  &  lumber;  but  then:  dependence  is  almost 
wholly  on  the  produce  of  tobacco.  .  .  . 

NORTH  CAROLINA 

....  There  are  great  tracts  of  good  land  in  this  Province,  &  it 
is  a  very  healthy  country;  but  the  situation  renders  it  forever  in- 
capable of  being  a  place  of  considerable  trade,  by  reason  of  a  great 
Sound  near  sixty  miles  over,  that  lies  between  the  Coast  &  the  Sea, 
barred  by  a  vast  Chain  of  Sand-banks,  so  very  shallow  &  shifting, 
that  sloops,  drawing  only  five  foot  water,  run  great  risk  in  crossing 
them. 

The  little  Commerce  therefore  driven  to  this  Colony,  is  carried 
on  by  very  small  Sloops,  chiefly  from  New  England;  who  bring  them 
Clothing  &  Iron  ware,  in  exchange  for  their  pork  &  Corn:  but  of 
late,  they  have  made  small  quantities  of  pitch  &  tar,  which  are  first 
exported  to  New  England,  &  thence  to  Great  Britain. 

We  are  not  thoroughly  informed  of  the  number  of  inhabitants; 
but  according  to  the  best  accounts  we  could  get,  the  number  of  persons 
in  their  tythables,  or  poll-tax,  were  not  long  since  above  1600,  of  which 
about  one  third  were  blacks.  .  .  . 

SOUTH   CAROLINA 

....  The  trade  of  this  Province,  with  respect  to  their  own  ship- 
ping is  not  hitherto  very  considerable;  the  inhabitants  not  having 
above  20  sail  of  their  own,  amounting  to  about  1500  ton;  &  as  they 
chiefly  apply  themselves  to  the  plantation  work,  they  have  not  many 
sea  faring  men,  but  then-  trade  is  carried  on  by  the  Merchants  of 
Great  Britain,  who  reap  a  considerable  advantage  thereby. 

The  commodities  the  people  of  Carolina  take  from  Great  Britain, 
are  all  manner  of  Cloathing,  woollen  linnen,  iron  ware,  brass  &  pewter, 
&  all  sorts  of  household  goods,  having  no  manufactures  of  their  own; 
&  their  southerly  situation  will  make  them  always  dependent  on 
Great  Britain  for  a  supply  of  these  commodities,  whose  consumption 
may  be  computed  at  about  £23,000  per  Annum;  besides  the  cost 
of  a  considerable  number  of  Negroes,  with  which  the  British  Mer- 


AGRICULTURE,   INDUSTRY  AND   TRADE  49 

chants  have  for  some  time  furnished  them  yearly,  taking  their  returns 
in  rice,  &  naval  stores. 

There  is  a  small  trade  carried  on  between  Carolina  &  the  Madeiras 
for  wine;  &  the  Commissioners  of  the  Customs  have  a  Surveyor 
General,  a  Collector,  a  Comptroller,  a  Searcher,  a  Waiter,  &  a  Naval 
Officer,  to  put  the  laws  of  trade  &  Navigation  in  execution  here: 
But  daily  experience  shews,  that  illegal  trade  is  not  to  be  prevented 
in  a  proprietary  Government. 

The  natural  produce  of  this  Country  is  Rice,  pitch,  tar,  turpentine, 
buck-skins,  furs,  corn,  beef,  pork,  soap,  myrtle-wax,  candles,  various 
sorts  of  lumber,  as  Masts,  cedar-boards,  staves,  shingles,  and  hoop- 
poles;  but  the  soil  is  thought  capable  of  producing  wine,  oil,  silk, 
indigo,  pot-ashes,  iron,  hemp,  &  flax. 

The  number  of  white  inhabitants  in  this  province  has  some  time 
since  been  computed  at  9000;  &  the  blacks  at  12,000,  But  the  fre- 
quent massacres  committed  of  late  years  by  the  neighbouring  Indians, 
at  the  instigation  of  the  French  &  Spaniards,  have  diminished  the 
white  men,  whilest  the  manufacture  of  pitch  &  tar  has  given  occasion 
to  increase  the  number  of  black  slaves,  who  have  lately  attempted, 
and  were  very  near  succeeding  in  a  new  revolution,  which  would 
probably  have  been  attended  by  the  utter  extirpation  of  all  your 
Majesty's  subjects  in  this  province;  &  therefore  it  may  be  neces- 
sary for  your  Majesty's  service,  that  the  Governor  should  be  in- 
structed to  propose  some  law  to  the  Assembly  there,  for  encouraging 
the  entertainment  of  more  white  servants  for  the  future.  . 


THE  CONSEQUENCE  OF  THE  PLANTATION  TRADE 

Thus  having  gone  through  the  several  Colonies  on  the  Continent, 
in  order  to  demonstrate  the  consequence  their  trade  is  of  to  Great 
Britain;  we  have  drawn  out  from  the  Custom  House  books  an  Ac- 
count N°  i.  containing  the  total  amount  or  value  of  all  goods  im- 
ported from,  &  exported  to  the  said  Colonies,  communibus  Annis, 
on  a  medium  of  three  years  from  Christmas  1714  to  Christmas 

1717-  •  •  . 

From  this  Account  it  will  appear,  that  the  plantations  in  America 
take  from  hence  yearly  to  the  value  of  one  million  sterling,  in  British 
products  &  Manufactures,  &  foreign  goods. 

And  although  the  exports  charged  in  this  account  to  the  several 
Colonies  on  the  continent,  amount  to  no  more  than  £431,027.  i6s.  5d 
yet  as  the  Continent  has  undoubtedly  a  great  share  in  the  General 


50  READINGS  IN  ECONOMIC  HISTORY 

article  of  entry  to  the  West  Indies,  as  well  as  in  the  articles  of  entry 
to  Africa  and  the  Madeiras,  the  exports  to  the  Continent  may  well 
be  computed  at  £500,000. 

But  before  we  enter  into  the  particular  circumstances  of  the 
plantation  trade  on  the  Continent,  it  will  be  necessary  to  ascertain 
the  principal  commodities,  wherein  their  trade  consists,  &  how 
much  they  respectively  amount  to;  which  will  appear,  Ac- 
count N°  2. 

It  may  be  observed  from  this  Account,  that  the  exports  to  the 
Continent  of  America  exceed  the  imports  from  thence  about  £200,000 
per  annum;  which  debt  falls  upon  the  provinces  to  the  Northward 
of  Maryland;  who  probably  are  enabled  to  discharge  the  same,  by 
the  trade  they  are  permitted  to  carry  on  in  America,  &  to  Europe, 
in  commodities  not  enumerated  in  the  Acts  of  Trade,  .  .  . 

There  still  remains  to  be  considered  another  great  advantage 
that  arises  to  this  Kingdom  from  the  plantation  trade,  which  is,  the 
constant  employment  it  gives  to  our  British  Shipping.  .  .  . 

It  is  very  probable,  that  the  trade  which  is  carried  on  between 
England  and  the  American  plantations  employs  at  least  one  fourth 
part  of  the  Shipping  annually  cleared  from  this  kingdom. 

And  upon  casting  up  the  tonnage  of  the  plantation  products  re- 
exported  in  the  year  1717,  it  appears  there  was  employed  near 
half  as  much  Shipping,  hi  transporting  these  goods  from  hence  to 
Germany,  Holland,  &  other  foreign  countries,  as  was  employed  in 
the  trade  directly  from  the  British  Colonies  in  America. 

Consequently  therefore  it  may  be  concluded,  that  about  one 
third  part  of  the  Shipping  employed  in  the  foreign  trade  of  this 
Kingdom  is  maintained  by  the  plantation  trade. 

But  notwithstanding  the  advantages,  at  present  arising  from  the 
Plantation  trade,  are  so  very  considerable,  it  is  not  to  be  doubted, 
but  that  they  might  still  be  rendered  much  more  useful,  if  sufficient 
encouragement  were  given  to  induce  them  to  turn  their  industry  to 
the  production  of  Naval  Stores,  of  all  kinds,  &  of  such  other  commodi- 
ties as  our  necessities  require,  &  which  are  purchased  by  us  with  great 
disadvantage  from  foreign  Countries;  from  whence  this  convenience, 
amongst  many  others,  would  naturally  result, —  That  the  more  North- 
ern Colonies  would  be  thereby  enabled  to  pay  their  balance  to  England, 
without  lying  under  the  necessity  of  carrying  on  a  trade  to  foreign 
parts,  in  some  respects  detrimental  to  their  mother  Kingdom. 


AGRICULTURE,   INDUSTRY  AND   TRADE 


No.   i. 


The    total    value    of 

the 

The    total    value    of 

the 

Imports  from 

Exports  to 

£                 s 

d 

£                  s 

d 

65,016            7 
22,607           16 
5,051             7 

2 

4 
oo 

New  England 
New  York 
Pennsylvania 

139,269          14 
50,314            6 
20,176           14 

6 
6 

2 

92,675           10 

6 

209,760           15 

2 

250,094           10 
38,906           1  6 

6 
i 

Virginia  &  Maryland 
Carolina 

198,276             4 
22,987           16 

9 
6 

No. 


2. 


The  principal  imports  from  New  England,  New  York,  Pennsyl- 
vania, Virginia,  Maryland,  and  Carolina,  are  as  follows. 


In  skins  &  f  urrs  

17,340 

14 

IO 

Products  of  the  Indian  Trade 

Turpentine  

12,082 

19 

5  > 

Pitch  and  tar 

74..QQO 

OO 

oo 

Train  oil 

7,680 

l8 

7 

i     of  the  sd  Plantations 

Whalefins 

14 

•2 

Tobacco  .        .   . 

6'     gg 

18 

I 

Rice  

IQ,2o6 

18 

4 

Sugar,  brown  ...                   .    . 

Q.&T.A. 

7 

•2 

of  foreign  Plantations 

Logwood  

2I,o6o 

6 

4 

of  Campeche 

In  all  other  Goods 

362,464 
20,  112 

17 
oo 

I 
oo 

The    total    import    according 

to  the  aforesd  Genl  account  .  . 
But  the  Tobacco  being  over- 
valued about                      .  .    . 

382,576 
8o,OOO 

17 
oo 

i 
oo 

per  annum 

The      said     import      cannot 

amount  to  more  than 302,576     17       i      per  annum 


52  READINGS  IN  ECONOMIC  HISTORY 

No.  3. 

And  the  principal  exports  to  the  said  provinces  are  as  follows. 

In  British  Manufacture  &  Products,  £  s  d 

Woollen  Manufactures 147,438  n       7 

Silk  wrought  &  thrown 18,468  7       i 

Linnens  &  sail  cloth 1 1 ,464  9  oo 

Cordage 11,284  5      9 

Gunpowder 2,392  15       5 

Leather  wrought,  &  saddles 15,161  12       6 

Brass  &  copper  wrought 2,565  6       7 

Iron  wrought  &  nails 35,631  13       6 

Lead  &  shot 2,850  9       3 

Pewter 3,687  6  n 

In  many  other  goods 43,941  _s  _6 

294,886  3       i 

In  Foreign  Goods. 

Linnens 86,413  oo  oo 

Callicoes 10,102  4  oo 

Prohibited  East  India  Goods 10,523  12       9 

Wrought  Silks 1,189  II       I 

Iron  &  Hemp 6,152  5  u 

In  other  foreign  goods 21,760  19      9 

Foreign  Goods 136,141  13       6 

British  Goods 294,886  3       i 

The  said  Exports  amounts  to  according  to  the  aforesaid    

general  account  (per  annum) 431,027  16       7 

But  as  it  has  been  always  mentioned,  the  total  export  might 

probably  amount  to  at  least  (per  annum) 500,000  oo  oo 

All  which  is  most  humbly  submitted. 

J.  Chetwynd. 

P.  Doeminique. 

Whitehall  M.  Bladen. 

Sepr  8.  1721  E.  Ashe. 


AGRICULTURE,   INDUSTRY  AND   TRADE  53 

II.   EXTRACTIVE  INDUSTRIES 

A.   Products  of  the  Forest,  1650  1 

To  the  pioneer  settler  the  clearing  of  the  densely  wooded  land  presented  a  task 
of  overwhelming  proportions.  While  we  regard  the  forests  today  as  a  source  of 
wealth  which  we  are  beginning  to  conserve  more  carefully,  to  the  colonist  they  were 
a  hindrance  to  be  got  rid  of  as  soon  and  as  thoroughly  as  possible.  The  author 
of  the  tract  from  which  the  following  extract  is  taken  was  trying  to  persuade  settlers 
to  emigrate  to  America,  so  he  pointed  out  some  of  the  ways  in  which  the  forest 
products  could  be  turned  to  account  in  the  process  of  clearing  the  land. 

The  objection,  that  the  Countrey  is  overgrowne  with  Woods,  and 
consequently  not  in  many  Yeares  to  bee  penetrable  for  the  Plough, 
carries  a  great  feeblenesse  with  it.  For  there  are  an  immense  quan- 
tity of  Indian  fields  cleared  already  to  our  hand  by  the  Natives,  which 
till  wee  grow  over  populous  may  every  way  be  abundantly  sufficient, 
but  that  the  very  clearing  of  ground  carries  an  extraodinary  benefit 
with  it,  I  will  make  apparent  by  these  following  Reasons. 

i.  If  wee  consider  the  benefit  of  Pot-ashes  growne  from  ten  to 
fifty  pound  in  the  Tunne,  within  these  twenty  Yeares,  and  in  all 
probability  likely  to  encrease  by  reason  of  interdicting  Trade  be- 
twixt us  and  the  Muscovite,  from  whence  we  used  to  supply  our 
selves;  We  shall  finde  the  employment  of  that  very  Staple  will  raise 
a  considerable  summe  of  Money,  and  no  man  so  imployed  can  (if 
industrious)  make  his  labour  less  than  one  hundred  pound,  per  annum: 
'For  if  wee  consider  that  those  who  labour  about  this  in  England  give 
twelve  pence  the  bushell  for  Ashes,  if  wee  consider  to  how  many 
severall  parts  of  the  Countrey  they  are  compelled  to  send  man  and 
horse  before  they  can  procure  any  quantity  to  fall  to  worke  upon; 
if  wee  consider  some  of  the  thriftiest,  and  wise,  and  understanding 
men,  sell  Wood  on  purpose  for  this  Commodity,  and  yet  notwith- 
standing this  Brigade  of  difficulties  finde  their  Adventures  and  La- 
bours answered  with  a  large  returne  of  profit,  wee  who  have  all  these 
things  already  at  our  owne  doore  without  cost,  may  with  a  confi- 
dence grounded  upon  reason  expect  an  advantage  much  greater,  and 
clearer  profit. 

Nor  can  wee  admit  in  discretion,  that  a  large  quantity  of  those 
should  not  finde  a  speedy  Market,  since  the  decay  of  Tymber  is 
a  defect  growne  universall  in  Europe,  and  the  Commodity  such  a 
necessary  Staple,  that  no  civill  Nation  can  be  conveniently  without  it. 

1  Virginia.  By  E.  -W.  Gent  (London,  1650).  In  Force,  Tracts  and  Other 
Papers  (Washington,  1844,  4  vols.),  Ill,  no.  xl,  13-14. 


54  READINGS  IN  ECONOMIC  HISTORY 

Nor  are  Pipestaves  and  Clapboard  a  despicable  commodity,  of 
which  one  man  may  with  ease  make  fifteen  thousand  yearely,  which 
in  the  countrey  it  selfe  are  sold  for  4  1.  in  the  Canaries  for  twenty 
pound  the  thousand,  and  by  this  means  the  labour  of  one  man  will 
yeeld  him  60  1.  per  annum,  at  the  lowest  Market.  If  all  this  be  not 
sufficient  to  remove  the  incumbrance  of  Woods,  the  Saw  mill  may  be 
taken  into  consideration,  which  is  in  every  respect  highly  beneficiall 
by  this  Timber  for  building  houses,  and  shipping  may  be  more 
speedily  prepared,  and  in  greater  quantity  by  the  labour  of  two  or 
three  men,  then  by  a  hundred  hands  after  the  usuall  manner  of 
sawing. 

The  Plankes  of  Walnut-trees  for  Tables  or  Cubbords,  Cedar  and 
Cypresse,  for  Chests,  Cabinets,  and  the  adorning  magnificent  build- 
ings, thus  prepared  will  be  easily  transported  into  England,  and 
sold  at  a  very  considerable  value. 

But  that  in  which  there  will  be  an  extraordinary  use  of  our  woods 
is  the  Iron  mills,  which  if  once  erected  will  be  an  undecaying  Staple, 
and  of  this  forty  servants  will  by  their  labour  raise  to  the  Adven- 
turer foure  thousand  pound  yearely:  Which  may  easily  be  appre- 
hended if  wee  consider  the  deerenesse  of  Wood  in  England,  where 
notwithstanding  this  great  clog  of  difficulty,  the  Master  of  the  Mill 
gaines  so  much  yearely,  that  he  cannot  but  reckon  himselfe  a  provi- 
dent Saver. 

B.   A7 aval  Stores  in  South  Carolina,  1699  1 

Edward  Randolph  was  sent  over  to  America  by  the  king  as  a  special  agent  to 
report  on  the  acts  of  trade.  In  this  report  he  urges  the  encouragement  of  naval 
stores  in  South  Carolina. 

....  My  Lords,  I  did  formerly  present  Your  Lordships  with 
proposals  for  supplying  England  with  Pitch  &  Tar,  Masts  &  all  or 
Naval  Stores  from  New  England.  I  observed  when  I  were  at  Yrork 
in  Septr.  last,  abundance  of  Tar  bro*.  down  Hudson's  River  to  be 
sold  at  New  York,  as  also  Turpentine  &  Tar  in  great  quantities  from 
the  Colony  of  Connecticut,  I  was  told  if  they  had  encouragement 
they  could  load  several  Ships  yearly  for  England.  But  since  my 
arrival  here  I  find  I  am  come  into  the  only  place  for  such  commodi- 
ties upon  the  Continent  of  America;  some  persons  have  offered  to 
deliver  in  Charlestown  Bay  upon  their  own  account  1000  Barrels  of 

1  A  Sketch  of  the  History  of  South  Carolina.  By  W.  J.  Rivers.  (Charleston, 
1 856),  445-6. 


AGRICULTURE,   INDUSTRY   AND   TRADE  55 

Pitch  and  as  much  Tar,  others  greater  quantities  provided  they 
were  paid  for  it  in  Charles  Town  in  Lyon  Dollars  passing  here  at 
5s.  pr.  piece,  Tar  at  8s.  pr.  Barrel,  and  very  good  Pitch  at  12s.  pr.  Bar- 
rel, &  much  cheaper  if  it  once  became  a  Trade.  The  season  for  making 
those  Commodities  in  this  Province  being  6  mos,  longer  than  in 
Virginia  and  more  Northern  Plantations;  a  planter  can  make  more 
tar  in  any  one  year  here  with  50  slaves  than  they  can  do  with  double 
the  number  in  those  places,  their  slaves  here  living  at  very  easy 
rates  and  with  few  clothes. 

C.   Shipbuilding  in  Massachusetts,  1607-1724 1 

There  are  many  references  in  contemporary  writings  to  the  growth  of  ship- 
building in  New  England  during  the  colonial  period,  but  nowhere  do  we  find  a 
description  of  this  industry.  Thus  we  read  in  Rev.  William  Hubbard's  quaint 
General  History  of  New  England,  written  about  1680,  that  "the  people  of  New 
England  at  this  time  [1646]  began  to  flourish  much  in  building  of  ships  and 
trafficking  abroad,  and  had  prospered  very  well  in  those  affairs,"  but  no  further 
details  are  given.  The  following  extract  brings  together  much  of  the  available 
information  on  this  subject.  The  author  was  a  captain  in  the  United  States 
navy. 

Undoubtedly  the  first  vessel  of  size  sufficient  to  navigate  the 
ocean,  launched  from  the  shores  of  New  England,  was  "a  faire  pinnace 
of  thirty  tons,"  called  the  Virginia,  which,  according  to  Strachey, 
was  built  by  the  Popham  colony  at  the  mouth  of  the  Kennebec  in 
1607,  thirteen  years  before  the  landing  of  the  pilgrims  at  Plymouth, 
and  which  made  a  successful  voyage  across  the  Atlantic  the  same 
year. 

Twenty-four  years  after  this,  on  the  4th  of  July,  1631,  was  launched 
the  Blessing  of  the  Bay,  the  first  vessel  built  in  the  colony  of 
Plymouth.  .  .  . 

Ten  years  later,  viz.,  Jan.  24,  1641,  Edward  Banks  launched  at 
Plymouth  a  bark  of  40  or  50  tons,  estimated  to  cost  £200,  and  which 
is  recorded  as  the  first  vessel  of  size  built  in  that  colony.  Hence  the 
Blessing  of  the  Bay  must  have  been  of  less  tonnage.  .  .  . 

The  importance  of  ship-building  to  the  colony,  immediately 
following  the  launch  of  Bang's  vessel,  received  the  attention  of 
the  pilgrim  fathers,  and  accordingly  on  the  4th  of  October,  1641,  the 
same  year  that  witnessed  her  launch,  we  find  them  enacting  the 
following  law: 

1  Early  Ship-building  in  Massachusetts.  By  George  Henry  Preble.  In  The 
New-England  Historical  and  Genealogical  Register  and  Antiquarian  Journal 
(Boston,  1869),  XXIII,  38-41;  XXV,  15-16,  127. 


56  READINGS  IN  ECONOMIC  HISTORY 

"Whereas  the  building  of  ships  is  a  business  of  great  importance 
for  the  common  good,  and  therefore  suitable  care  ought  to  be  taken 
that  it  be  well  performed,  according  to  the  commendable  course  of 
England  and  other  places:  It  is  therefore  ordered  by  this  court  and 
the  authority  thereof;  that  when  any  ship  is  to  be  built  within  this 
jurisdiction,  or  any  vessel  above  thirty  tons,  the  owner,  or  builder  in 
his  absence,  shall  before  they  begin  to  plank,  repair  to  the  governor 
or  deputy  governor,  or  any  two  magistrates,  upon  the  penalty  of  ten 
pounds,  who  shall  appoint  some  able  man  to  survey  the  work  and 
workmen  from  time  to  time  as  is  usual  in  England,  and  the  same  so 
appointed  shall  have  such  liberty  and  power  as  belongs  to  his 
office.  .  .  . 

"And  those  viewers  shall  have  power  to  cause  any  bad  timber, 
or  other  insufficient  work  or  material  to  be  taken  out  and  amended 
at  the  charge  of  them  through  whose  default  it  grows."  1  .  .  . 

These  vessels  were  all  ships  of  size  for  those  days,  though  they 
would  be  but  the  merest  cockle-shells  of  our  times.  We  of  the  present 
generation  cannot  realize  the  little  cock  boats  in  which  navigators 
traversed  the  ocean  between  two  and  three  centuries  ago.  Could 
the  navigators  of  those  days  revisit  the  earth,  they  would  be  amazed 
at  the  improvements  in  size,  construction,  comfort  and  security  of 
the  ships  of  our  time.  Hume  relates  that,  in  1582,  of  twelve  hundred 
and  thirty-two  vessels  belonging  to  the  kingdom  of  Great-Britain, 
but  two  hundred  and  seventeen  were  over  eighty  tons  burthen.  A 
vessel  of  forty  tons,  he  says,  was  considered  a  large  vessel,  and  in 
1587  there  were  not  five  vessels  in  all  England  whose  size  exceeded 
200  tons.  Only  one  of  the  vessels  which  composed  the  squadron  of 
Columbus,  in  1492,  had  a  deck,  and  the  remainder,  according  to 
Irving,  were  not  superior  to  the  smallest  class  of  modern  coasting 
vessels.  On  his  third  voyage,  when  coasting  the  gulf  of  Para,  Colum- 
bus complained  of  the  size  of  his  ship,  it  being  nearly  100  tons  burthen. 
The  Mayflower,  which  in  1620  brought  over  the  Pilgrim  fathers,  was 
but  180  tons,  and  the  Half  Moon,  as  the  boat  in  which  Henrick 
Hudson  discovered  New- York  bay  in  1609  was  called,  was  but  80 
tons.  .  .  . 

In  1676,  there  had  been,  according  to  Hutchinson,  constructed  in 
Boston  and  its  vicinity,  and  then  belonged  to  ports  in  its  neighbor- 
hood :  — 


1  Ancient  Laws  and  Charter  of  Massachusetts  Bay,  published  by  order  of  the 
General  Court,  ed.  of  1814,  p.  189. 


AGRICULTURE,  INDUSTRY  AND  TRADE  57 

30    vessels  of  between  100  and  250  tons, 
200       "        "  50     "    100      " 

200          "  "  "  30       "       50        » 

300  6  10 

In  1714-17,  Massachusetts  had  492  vessels,  with  an  aggregate  of 
25,406  tons,  and  employing  3,493  seafaring  men.  .  .  . 

There  is  no  subject  connected  with  the  first  century  of  the  history 
of  New-England,  about  which  so  little  is  known  as  of  the  small  ves- 
sels employed  in  navigating  its  waters.  Of  the  small  craft  employed 
by  our  ancestors  in  their  coasting,  fishing  and  trading  voyages,  our 
information  is  hardly  sufficient  even  to  enable  the  imagination  to 
represent  satisfactorily  their  form  and  appearance  when  under  sail. 
We  know  that  they  had  shallops,  sloops,  pinnaces,  barks  and  ketches; 
but  concerning  the  masts,  spars,  rigging  and  sails  of  these  vessels,  it 
may  be  said  we  know  nothing  .  .  . 

In  1698  Lord  Bellomont  says:  "Last  year  I  examined  the  Registers 
of  all  the  vessels  in  the  three  provinces  of  my  government;  and  found 
there  then  belonged  to  the  town  of  Boston  25  ships  from  100  tons 
to  300;  ships  about  100  tons  and  under,  38;  brigantines,  50;  ketches, 
13;  and  sloops,  67;  in  all,  194  vessels.  To  New-Hampshire  at  that 
time  ii  ships  of  good  burthen,  5  brigantines,  4  ketches  and  4  sloops." 
.  .  .  "I  believe  I  may  venture  to  say  there  are  more  good  vessels 
belonging  to  the  town  of  Boston,  than  to  all  Scotland  and  Ireland, 
unless  one  should  reckon  the  small  craft,  such  as  herring  boats."  l  .  .  . 

Various  attempts  were  made  to  counteract  ship-building  in  the 
province.  Oct.  19,  1724,  a  petition  was  laid  before  the  Lords  of 
Plantations  by  sixteen  master  builders,  against  the  encouragement 
of  ship-building  in  New-England.  Of  their  reasons,  one  was,  that 
their  journeymen  were  drawn  to  this  country;  and  another,  that 
there  would  not  be  a  sufficiency  of  ships  for  the  royal  navy,  in  case 
of  need.  The  petitioners  belonged  to  London. 

D.   Fur  Trade  Gained  by  the  French,  1755  * 

With  the  increase  of  population  and  the  killing  off  of  the  fur-bearing  animals 
in  the  region  east  of  the  Alleghanies,  the  French  were  able  to  secure  to  themselves 


1  Bellomont  Papers,  p.  790.  —  See  Provincial  Papers,  New-Hampshire.    Vol. 
II.    Part  i.     1628-1722. 

2  Observations  on  the  late  and  present  conduct  of  the  French,  with  regard  to  their 
encroachments  upon  the  British  Colonies  in  North  America.     By  William  Clarke 
(Boston,  1755),  14-16. 


58  READINGS  IN  ECONOMIC  HISTORY 

the  larger  part  of  the  fur  trade  with  the  Indians  in  the  Mississippi  country.  The 
rivalry  over  the  fur  trade  was  indeed  one  of  the  immediate  causes  which  led  to  the 
French  and  Indian  War  in  1756. 

But  to  return  from  these  occasional  Remarks,  and  to  point  out 
the  Consequences  of  the  present  Measures  of  the  French,  if  they  are 
suffered  to  pursue  them: 

The  first  and  most  immediate  will  be  the  engrossing  the  whole 
Furr  and  Pelt  Trade.  The  Furrs  and  Pelts  imported  into  England, 
have  been  commuted  to  amount  to  about  90,000  /.  Sterling  per  Annum, 
besides  what  are  used  in  the  Plantations,  which  is  no  inconsiderable 
Quantity,  but  I  believe  greatly  exceed  that  Sum.  What  Part  is 
imported  from  North- America,  and  what  from  the  Northern  Parts 
of  Europe,fl  cannot  tell.  The  whole  Indian  Trade  of  North- America 
is  carried  on  entirely  by  Barter;  and  that  chiefly,  and  indeed  almost 
wholly  for  Strouds,  Duffils,  Blankets,  and  other  Manufactures  of 
Great-Britain.  .  .  . 

The  Pelts  and  Furrs  imported  into  France,  amounted  some  Years 
ago  to  no  less  than  135,000  /.  Sterling  per  Annum;  and  since  that 
Time  the  French  Trade  in  those  Commodities  has  been  continually 
encreasing,  whilst  that  of  the  English  has  been  diminishing;  and  in 
a  little  Time  will,  very  probably,  nay,  must  necessarily  be  entirely 
lost  to  the  English  and  gained  by  the  French,  if  the  latter  are  suf- 
fered to  continue  possessed  of  their  present  Encroachments,  and  to 
strengthen  themselves  in  them. 

E.   Fishing  in  New  England,  1624  l 

That  the  wealth  of  the  colonists  of  New  England  lay  in  the  fishing  industry 
rather  than  in  cultivating  a  sterile  soil  or  in  trying  to  develop  artificial  industries 
was  early  seen  by  such  a  shrewd  observer  as  Captain  John  Smith.  All  the  early 
writers  agree  in  describing  the  enormous  quantities  of  fish  in  American  waters,  and 
the  following  extract  probably  does  not  exaggerate  the  situation. 

The  main  staple  from  hence  to  be  extracted  for  the  present,  to  pro- 
duce the  rest,  is  fish,  which  howbeit  may  seem  a  mean  and  a  base 
commodity,  yet  who  will  but  truly  take  the  pains  and  consider  the 
sequel,  I  think  will  allow  it  well  worth  the  labour.  .  .  . 

In  March,  April,  May,  and  half  June,  here  is  cod  in  abundance; 
in  May,  June,  July,  and  August,  mullet  and  sturgeon,  whose  roes 
does  make  caviary  and  puttargo,  herring  if  any  desire  them;  I  have 

1  Generall  Historic  of  Virginia,  New  England  and  the  Summer  Isles,  1584-1624. 
By  Captein  John  Smith  (London,  1624).  In  Pinkerton,  Voyages  and  Travels, 
XIII,  213,  215-6. 


AGRICULTURE,   INDUSTRY  AND  TRADE  59 

taken  many  out  of  the  bellies  of  cods,  some  in  nets;  but  the  savages 
compare  the  store  in  the  sea  with  the  hairs  of  their  heads ;  and  surely 
there  are  an  incredible  abundance  upon  this  coast.  In  the  end  of 
August,  September,  October  and  November,  you  may  have  cod  again 
to  make  core-fish  or  poor-John;  hake  you  may  have  when  the  cod 
fails  in  summer,  if  you  will  fish  in  the  night,  which  is  better  than  cod. 
Now  each  hundred  you  take  here  is  as  good  as  two  or  three  hundred 
in  Newfoundland;  so  that  half  the  labour  in  hooking,  splitting  and 
towing  is  saved :  and  you  may  have  your  fish  at  what  market  you  will, 
before  they  have  any  in  Newfoundland,  where  their  fishing  is  chiefly 
but  in  June  and  July,  where  it  is  here  in  March,  April,  May,  Septem- 
ber, October,  and  November,  as  is  said;  so  that  by  reason  of  this 
plantation,  the  merchants  may  have  their  freight  both  out  and  home, 
which  yield  an  advantage  worth  consideration.  Your  core-fish  you 
may  in  like  manner  transport  as  you  see  cause,  to  serve  the  ports  in 
Portugal,  as  Lisbon,  Avera,  Porta-Port,  and  divers  others  (or  what 
market  you  please),  before  your  islanders  return:  they  being  tied 
to  the  season  in  the  open  sea,  and  you  having  a  double  season,  and 
fishing  before  your  doors,  may  every  night  sleep  quietly  ashore  with 
good  cheer,  and  what  fires  you  will,  or  when  you  please,  with  your 
wives  and  family:  they  only  and  their  ships  in  the  main  ocean,  that 
must  carry  and  contain  all  they  use,  besides  their  freight.  The 
mullets  here  are  in  that  abundance  you  may  take  them  with  nets 
sometimes  by  hundreds,  where  at  Cape  Blank  they  hook  them;  yet 
those  are  but  a  foot  and  a  half  in  length;  these  two,  three,  r  four,  as 
oft  I  have  measured,  which  makes  me  suspect  they  are  some  other 
kind  of  fish,  though  they  seem  the  same,  both  in  fashion  and  good- 
ness. Much  salmon  some  have  found  up  the  rivers  as  they  have 
passed,  and  here  the  air  is  so  temperate  as  all  these  at  any  time  may 
be  preserved.  Now,  young  boys  and  girls,  savages,  or  any  other, 
be  they  never  such  idlers,  may  turn,  carry,  or  return  a  fish,  without 
either  shame,  or  any  great  pain:  he  is  very  idle,  that  is  past  twelve 
years  of  age,  and  cannot  do  so  much;  and  she  is  very  old,  that  cannot 
spin  a  thread  to  make  engines  to  catch  a  fish. 

F.  Advantages  of  American  Fisheries,  ippo1 

The  close  proximity  to  the  United  States  of  the  Newfoundland  Banks,  where 
the  best  fishing  was  to  be  had,  gave  the  American  fisheries  an  initial  advantage 

1  Statistical  Annals  .  .  .  of  the  United  States  of  America.    By  Adam  Seybert. 
(Philadelphia,  1818),  335-6. 


60  READINGS  IN  ECONOMIC  HISTORY 

over  all  competitors  except  the  Canadians,  but  other  factors  which  are  enumerated 
in  the  following  extract,  made  us  probably  the  foremost  fishing  nation  in  the  world 
at  the  end  of  the  eighteenth  century. 

...  It  was  supposed,  that  the  people  of  the  United  States 
possessed  many  advantages  over  those  of  other  nations;  in  some 
respects  this  was  true;  and  as  such,  the  Secretary  of  State  [Thomas 
Jefferson^,  enumerated  the  following;  viz. 

1.  The  neighbourhood  of  the  great  fisheries,  which  permits  our 
fishermen  to  bring  home  their  fish,  to  be  salted  by  their  wives  and 
children. 

2.  The  shore  fisheries,  so  near  at  hand  as  to  enable  vessels  to  run 
into  port  in  a  storm,  and  to  lessen  the  risk,  for  which  distant  nations 
must  pay  an  insurance. 

3.  The   winter   fisheries,   which,    like   household   manufactures, 
employ  portions  of  time  which  would  otherwise  be  useless. 

4.  The  smallness  of  the  vessels  which  the  shortness  of  the  voyage 
enables  us  to  employ;  and  which,  consequently,  requires  but  a  small 
capital. 

5.  The  cheapness  of  our  vessels;    which  do  not  cost  above  the 
half  of  the  Baltic  fir  vessels,  computing  price  and  duration. 

6.  Their  excellence  as  sea  boats;  which  decreases  the  risk,  and 
facilitates  the  returns. 

7.  The  superiority  of  our  mariners,  in  skill,  activity,  enterprise, 
sobriety,  and  order. 

8.  The  cheapness  of  provisions. 

9.  The  cheapness  of  casks;  which,  of  itself,  is  said  to  be  equal  to 
an  extra  profit  of  15  per  cent. 

III.  MANUFACTURING  INDUSTRIES 
A.    Colonial  Manufactures,  1732  1 

The  English  Board  of  Trade  and  Plantations  every  few  years  sent  a  long  list  of 
queries  to  the  colonial  governors  concerning,  among  other  things,  the  trade  and 
manufactures  of  the  colonies.  The  answers  to  these  questions  probably  constitute 
our  most  valuable  source  of  information  as  to  the  commerce  and  industrial  develop- 
ment of  the  various  colonies.  A  much  condensed  account  of  colonial  manufactures 
for  the  year  1732  is  herewith  presented. 

Pursuant  to  an  order  of  the  British  House  of  Commons,  directed 
to  the  Lords  Commissioners  of  Trade  and  Plantations,  in  the  latter 

1  Report  of  the  Lords  Commissioners  for  Trade  and  Plantations  to  the  House  of 
Commons,  1732.    In  Anderson,  An  Historical  and  Chronological  Deduction  of 
Origin  of  Commerce  (4  ^o/fe.,  London,  1787),  III.  iqo-4. 


AGRICULTURE,   INDUSTRY  AND  TRADE  61 

end  of  the  last  or  the  beginning  of  this  same  year  1732,  relating  to 
the  dispute  still  subsisting  between  the  sugar  colonies  and  the  north- 
ern continental  colonies  of  America;  the  said  board  reported,  with 
respect  to  any  laws  made,  manufactures  set  up,  or  trade  carried  on 
there,  detrimental  to  the  trade,  navigation,  or  manufactures  of  Great 
Britain,  as  follows,  viz.  .  .  . 

"That  in  New  England,  New  York,  Connecticut,  Rhode  Island, 
Pennsylvania,  and  in  the  county  of  Somerset  in  Maryland,  they  had 
fallen  into  the  manufacture  of  woollen  cloth  and  linen  cloth,  for 
the  use  of  their  own  families  only. 

"For,  first,  The  product  of  those  colonies  being  chiefly  stock," 
i.  e.  cattle,  "and  grain,  the  estates  of  the  inhabitants  depended  wholly 
on  farming,  which  could  not  be  managed  without  a  certain  quan- 
tity of  sheep,  so  that  their  wool  would  be  entirely  lost  were  not 
their  servants  employed  during  the  winter  in  manufacturing  it  for 
the  use  of  their  families. 

"Secondly,  That  flax  and  hemp  being  likewise  easily  raised,  the 
inhabitants  manufactured  them  into  a  coarse  sort  of  cloth  bags, 
traces,  and  halters,  for  their  horses;  which  they  found  did  more 
service  than  those  they  had  from  any  part  of  Europe.  That,  how- 
ever, the  height  of  wages  and  high  price  of  labour  in  general 
in  America  rendered  it  impracticable  for  people  there  to  manufac- 
ture their  linen  cloth  at  less  than  twenty  per  cent,  more  than  the 
rate  in  England,  or  woollen  cloth  at  less  than  fifty  per  cent,  dearer 
than  that  which  is  exported  from  hence  for  sale.  It  were  to  be  wished, 
that  some  expedient  might  be  fallen  upon  to  divert  their  thoughts 
from  undertakings  of  this  nature:  so  much  the  rather,  because 
those  manufactures,  hi  process  of  time,  may  be  carried  on  in  a  greater 
degree,  unless  an  early  stop  be  put  to  their  progress,  by  employing 
them  in  naval  stores.  .  .  . 

"I.     New  Hampshire. 

"The  governor,  in  his  answer,  said,  That  there  were  no  settled 
manufactures  in  that  province,  and  that  their  trade  principally 
consisted  in  lumber  and  fish. 

"II.  Massachusetts  Bay,  in  New  England. 

"The  governor  informed  us,  that  in  some  parts  of  this  province, 
the  inhabitants  worked  up  their  wool  and  flax  into  an  ordinary 
coarse  cloth,  for  their  own  use;  but  did  not  export  any.  That  the 
greatest  part  of  both  woollen  and  linen  cloathing  worn  in  this  prov- 


62  READINGS  IN  ECONOMIC  HISTORY 

ince  was  imported  from  Great  Britain,  and  sometimes  from  Ireland. 
But,  considering  the  excessive  price  of  labour  in  New  England, 
the  merchants  could  afford  what  was  imported  cheaper  than  what 
was  made  in  that  country. 

"That  there  were  also  a  few  hatters  set  up  in  the  maritime  towns: 
and  that  the  greater  part  of  the  leather  used  in  that  country  was 
manufactured  amongst  themselves.  That  there  had  been  for  many 
years  some  iron-works  in  that  province,  which  had  afforded  the 
people  iron  for  some  of  their  necessary  occasions;  but  that  the  iron 
imported  from  Great  Britain  was  esteemed  much  the  best,  and  wholly 
used  by  the  shipping.  And  that  the  iron  works  of  that  province 
were  not  able  to  supply  the  twentieth  part  of  what  was  necessary 
for  the  use  of  the  country. 

"in.   New  York. 

"That  they  had  no  manufactures  in  that  province  that  deserved 
mentioning;  their  trade  consisting  chiefly  hi  furs,  whale-bone,  oil, 
pitch,  tar,  and  provisions. 

"IV.   New  Jersey. 

"No  manufactures  here  that  deserve  mentioning:  their  trade 
being  chiefly  in  provisions  exported  to  New  York  and  Pennsylvania. 

"V.   Pennsylvania. 

"Its  chief  trade  lay  in  the  exportation  of  provisions  and  lumber; 
having  no  manufactures  established;  their  cloathing  and  utensils 
for  their  houses  being  all  imported  from  Great  Britain. 

"VI.   From  New  Hampshire,  further  advices,  viz. 

"That  the  woollen  manufacture  of  this  province  is  much  less 
than  formerly;  the  common  lands  on  which  the  sheep  used  to  feed, 
being  now  divided  into  particular  properties,  and  the  people  almost 
wholly  cloathed  with  woollen  from  Great  Britain.  That  the  manu- 
facturing of  flax  into  linen  (some  coarser,  some  finer)  daily  increased 
by  the  great  resort  of  people  from  Ireland  thither,  who  are  well 
skilled  in  that  business.  And  that  the  chief  trade  of  this  province 
continued,  as  for  many  years  past,  in  the  exportation  of  naval 
stores,  lumber,  and  fish. 

"VII.  Later  accounts  from  Massachusetts  Bay,  in  New  Eng- 
land, viz. 

"The  assembly  have  voted  a  bounty  of  thirty  shillings  for  every 
piece  of  duck  or  canvas  to  be  made  in  this  province.  —  Some  other 


AGRICULTURE,  INDUSTRY  AND  TRADE  63 

manufactures  are  carried  on  there;  as  the  making  of  brown  Hol- 
lands, for  womens  wear;  which  lessens  the  importation  of  calicoes, 
and  some  other  softs  of  East  India  goods.  —  They  also  make  some 
small  quantities  of  cloth  made  of  linen  and  cotton,  for  ordinary 
shirting  and  sheeting.  —  By  a  paper-mill,  set  up  three  years  ago, 
they  make  to  the  value  of  two  hundred  pounds  yearly.  —  There  are 
also  several  forges  for  making  of  bar  iron,  and  some  furnaces  for 
cast  iron,  or  hollow  wares,  and  one  slitting  mill:  —  and  a  manu- 
facture of  nails. 

"The  governor  writes,  concerning  the  woollen  manufacture,  that 
the  country  people  who  used  formerly  to  make  most  of  their  cloath- 
ing  out  of  their  own  wool,  do  not  now  make  a  third  part  of  what 
they  wear,  but  are  mostly  cloathed  with  British  manufactures. — 
The  governor  (Belcher)  by  some  of  his  letters  of  an  older  date, 
in  answer  to  our  annual  queries,  writes,  that  there  are  some  few 
copper  mines  in  this  province,  but  so  far  distant  from  water  car- 
riage, and  the  ore  so  poor,  that  it  is  not  worth  the  digging.  —  The 
Surveyor  General  of  his  Majesty's  woods  writes,  that  they  have 
in  New  England  six  furnaces  and  nineteen  forges  for  making  of 
iron :  —  and  that  in  this  province  many  ships  are  built  for  the  French 
and  Spaniards,  in  return  for  rum,  melasses,  wines,  and  silk,  which 
they  truck  there  by  connivance.  —  Great  quantities  of  hats  are 
made  in  New  England,  of  which  the  Company  of  Hatters  of  London 
have  likewise  lately  complained  to  us.  —  That  great  quantities 
of  those  hats  are  exported  to  Spain,  Portugal,  and  our  West  India 
islands.  —  They  also  make  all  sorts  of  iron-work  for  shipping. — 
That  there  are  several  still-houses  and  sugar  bakers  established 
in  New  England. 

"VHI.  Later  advices  from  New  York,  viz, 

"There  are  no  manufactures  here  that  can  affect  the  manufactures 
of  Great  Britain.  —  There  is  yearly  imported  into  New  York  a  very 
large  quantity  of  the  woollen  manufactures  of  this  kingdom,  for 
their  cloathing,  which,  'as  the  President  of  the  Council  of  this 
province  writes,'  they  would  be  rendered  incapable  to  pay  for, 
and  would  be  reduced  to  the  necessity  of  making  for  themselves, 
if  they  were  prohibited  from  receiving  from  the  foreign  sugar  colonies, 
the  money,  rum,  sugar,  melasses,  cocoa,  cotton-wool,  &c.  which 
they  at  present  take  in  return  for  provisions,  horses,  and  lumber, 
the  produce  of  that  province  and  of  New  Jersey;  of  which,  he 
affirms,  the  British  sugar  colonies  do  not  take  off  above  one-half. 


64  READINGS  IN  ECONOMIC  HISTORY 

But  the  Company  of  Hatters  of  London  have  since  informed  us,  that 
hats  are  manufactured  in  great  quantities  in  this  province. 

"IX.   New  Jersey. 

"No  particular  returns  from  this  province. 

"X.   From  Pennsylvania,  later  advices,  viz. 

"The  deputy-governor  writes,  that  he  does  not  know  of  any 
trade  carried  on  in  that  province  that  can  be  injurious  to  this  king- 
dom: and  that  they  do  not  export  any  woollen  or  linen  manufac- 
tures: all  that  they  make,  which  are  of  a  coarse  sort,  being  for 
their  own  use.  We  are  further  informed,  that  in  this  province 
are  built  many  brigantines  and  small  sloops,  which  they  sell  to 
the  West  Indies. 

"XI.   Rhode  Island. 

"The  governor  informs  us,  in  answer  to  our  queries,  that  there 
are  iron  mines  there;  but  not  a  fourth  part  iron  enough  to  serve 
their  own  use.  But  he  takes  no  notice  of  any  sort  of  manufactures 
established  there. 

' '  XII .   Connecticut. 

"No  return  from  the  governor  of  this  province."  .  .  .  "But," 
says  this  report  of  the  Board  of  Trade,  "we  find  by  some  accounts, 
that  the  produce  of  this  colony  is  timber,  boards,  all  sorts  of  English 
grain,  hemp,  flax,  sheep,  black  cattle,  swine,  horses,  goats,  and  to- 
bacco. —  That  they  export  horses  and  lumber  to  the  West  Indies, 
and  receive  in  return  sugar,  salt,  melasses,  and  rum.  —  We  like- 
wise find,  that  their  manufactures  are  very  inconsiderable;  the 
people  there  being  generally  employed  in  tillage;  some  few  in 
tanning,  shoe-making,  and  other  handicrafts;  others  in  building, 
joiners,  taylors  and  smiths  work,  without  which  they  could  not 
subsist." 

"No  report  is  made  concerning  Carolina,  the  Bahama,  nor  the 
Bermuda  isles:  and  as  for  Newfoundland,  it  is  scarcely  to  be  called 
a  plantation,  and  Hudson's  Bay  not  at  all.  .  .  . 

"From  the  foregoing  state,"  continues  the  report,  "it  is  observ- 
able that  there  are  more  trades  carried  on  and  manufactures  set 
up  in  the  provinces  on  the  continent  of  America  to  the  northward 
of  Virginia,  prejudicial  to  the  trade  and  manufactures  of  Great 
Britain,  particularly  in  New  England,  than  in  any  other  of  the 
British  colonies;  which  is  not  to  be  wondered  at;  for  their  climate, 


AGRICULTURE,   INDUSTRY  AND  TRADE  65 

soil,  and  produce,  being  pretty  near  the  same  with  ours,  they  have 
no  staple  commodities  of  their  own  growth  to  exchange  for  our 
manufactures;  which  puts  them  under  greater  necessity,  as  well 
as  under  greater  temptation  of  providing  for  themselves  at  home: 
to  which  may  be  added,  in  the  charter  governments,  the  little 
dependence  they  have  upon  their  mother-country,  and  consequently 
the  small  restraints  they  are  under  in  any  matters  detrimental 
to  her  interests. 

"And  therefore,  we  would  humbly  beg  leave  to  report  and  submit 
to  the  wisdom  of  this  Honourable  House,  the  substance  of  what 
we  formerly  proposed  in  our  report  on  the  silk,  linen,  and  woollen 
manufactures  herein  before  recited;  namely,  whether  it  might  not 
be  expedient  to  give  those  colonies  proper  encouragements  for  turn- 
ing their  industry  to  such  manufactures  and  products  as  might 
be  of  service  to  Great  Britain,  and  more  particularly  to  the  pro- 
duction of  all  kinds  of  naval  stores. 

"Whitehall,  Feb.  15,  1731-2.  PAUL  DOCKMINIQUE,  &c." 

B.   Few  Manufactures  in  New  York,  1732  v 

The  following  extract  is  a  good  example  of  a  report  from  a  governor  who  was 
friendly  to  the  colonists  and  who  minimized  the  growth  of  manufacturing  in  the 
colonies  and  the  infraction  of  the  acts  of  trade.  Cosby  was  governor  of  New  York. 

New  York.  18.  Decr  1732. 
My  Lords,  .  .  . 

I  acknowledge  the  receipt  of  your  LordppS  to  me  of  the  i6th  of  June 
last,  and  in  pursuance  of  His  Majty>s  directions  to  Your  Lordpps's  Board 
have  made  the  strictest  enquiry  in  respect  to  Manufacturers  sett  up, 
and  Trade  carryed  on  in  this  Province  of  New  York  and  can  discover 
none  that  may  in  any  way  affect  or  prejudice  the  Trade,  Navigation 
and  Manufactures  of  the  Kingdom  of  Great  Brittain;  .  .  .  The  In- 
habitants here  are  more  lazy  and  unactive  that  the  world  generally 
supposes,  and  their  manufacture  extends  no  further  then  what  is  con- 
sumed in  their  own  famillys,  a  few  coarse  Lindsey  Woolseys  for  cloath- 
ing,  and  linen  for  their  own  wear;  the  hatt  makeing  trade  here  seemed 
to  promise  to  make  the  greatest  advances  to  the  prejudice  of  Great 
Brittain,  but  that  the  Parliament  having  already  taken  into  their  con- 
sideration, needs  no  more  mention,  whatever  new  springs  up  that  may 
in  the  least  affect  and  prejudice  the  Trade  or  Navigation  of  Great 

1  Documents  relative  to  the  Colonial  History  of  the  State  of  New  York.  Edited 
by  E.  B.  O'Callaghan  (Albany,  1855),  V,  937-8. 


66  READINGS  IN  ECONOMIC  HISTORY 

Brittain  shall  be  narrowly  inspected  and  Annual  returns  of  Your 
Lordpps  Querries  constantly  sent  —  In  the  mean  time  I  have  the 
honour  to  be  with  the  greatest  respect  imaginable  —  My  Lords, 

Your  Lordpps  most  obedient 

and  most  humble  servant. 

(signed).  W  COSBY 

C.   Manufactures  in  New  York,  1767  l 

The  slight  development  of  manufacturing  establishments  and  the  difficulties 
which  the  manager  of  such  enterprises  had  to  cope  with  in  the  uncertainty  of 
labor  and  the  competition  of  the  cheaper  and  better  English  goods  are  clearly 
brought  out  in  this  report  of  Governor  H.  Moore  of  New  York  to  the  Lords  of 
Trade. 

There  is  a  small  Manufactory  of  Linen  in  this  City  under  the 
Conduct  of  one  Wells,  and  supported  chiefly  by  the  Subscriptions  of 
a  set  of  men  who  call  themselves  the  Society  of  Arts  and  Agriculture. 
No  more  than  fourteen  Looms  are  employed  in  it,  and  it  was  estab- 
lished in  order  to  give  Bread  to  several  poor  families  which  were  a 
considerable  charge  to  the  City,  and  are  now  comfortably  supported 
by  their  own  daily  Labour  in  spinning  of  Flax.  It  does  not  appear, 
that  there  is  any  established  fabric  of  Broad  cloth  here;  and  some 
poor  Weavers  from  Yorkshire,  who  came  over  lately  in  expectation 
of  being  engaged  to  make  Broad  cloths,  could  find  no  Employment. 
But  there  is  a  general  Manufactory  of  Woollen  carried  on  here,  and 
consists  of  two  sorts,  the  first  a  coarse  cloth  entirely  woollen  f  of  a 
yard  wide;  and  the  other  a  Stuff  which  they  call  Linsey  Woollsey. 
The  Warp  of  this  Linen  and  the  Woof  Woollen;  and  a  very  small 
quantity  of  it  is  ever  sent  to  market.  Last  year  when  the  Riots  and 
Disorders  here  were  at  their  height,  on  the  occasion  of  the  Stamp 
Act,  these  manufactures  were  greatly  boasted  of,  and  the  Quantity 
then  made  greatly  magnified  by  those,  who  were  desirous  of  dis- 
tinguishing themselves  as  American  Patriots,  and  would  wear  nothing 
else;  they  were  sometimes  sold  for  three  times  their  value;  but  the 
manufacturers  themselves  shewed,  that  they  had  more  good  sense 
than  the  persons  who  employed  them;  for  they  never  cloathed 
themselves  with  the  work  of  their  own  hands,  but  readily  brought 
it  to  market,  and  selling  it  at  an  extravagant  price  there,  bought 
English  cloth  for  themselves  and  their  families.  The  custom  of 
making  these  coarse  cloths  in  private  families  prevails  throughout 

1  Documents  relative  to  the  Colonial  History  of  New  York.  Edited  by  E.  B. 
O'Callaghan.  (Albany,  1856-1887),  VII,  888-9. 


AGRICULTURE,   INDUSTRY  AND  TRADE  67 

the  whole  Province,  and  almost  in  every  house  a  sufficient  quantity 
is  manufactured  for  the  use  of  the  Family,  without  the  least  design 
of  sending  any  of  it  to  market.  This  I  had  an  opportunity  of  seeing 
during  the  late  Tour  I  made,  and  had  the  same  Accounts  given  me 
by  all  those  persons,  of  whom  I  made  any  enquiries,  for  every  house 
swarms  with  children,  who  are  set  to  work  as  soon  as  they  are  able 
to  Spin  and  card;  and  as  every  family  is  furnished  with  a  Loom, 
the  Itinerant  Weavers  who  travel  about  the  Country,  put  the  finish- 
ing hand  to  the  work. 

There  is  a  Manufactory  of  Hats  in  this  City,  which  is  very  con- 
siderable; for  the  Hats  are  not  so  good  as  those  made  in  England, 
and  are  infinitely  dearer.  Under  such  Disadvantages  as  these  it 
is  easy  to  imagine  with  what  difficulty  it  is  supported,  and  how  short 
the  duration  of  it  is  like  to  be;  the  Price  of  Labour  is  so  great  in  this 
part  of  the  World  that  it  will  always  prove  the  greatest  obstacle  to 
any  manufactures  attempted  to  be  set  up  here,  and  the  genius  of  the 
People  in  a  Country  where  every  one  can  have  Land  to  work  upon 
leads  them  so  naturally  into  Agriculture  that  it  prevails  over  every 
other  occupation.  There  can  be  no  stronger  Instances  of  this,  than 
in  the  servants  Imported  from  Europe  of  different  Trades;  as  soon 
as  the  Time  stipulated  in  their  Indentures  is  expired,  they  immedi- 
ately quit  their  Masters  and  get  a  small  tract  of  Land  in  settling 
which  for  the  first  three  or  four  years  they  lead  miserable  lives,  and 
in  the  most  abject  Poverty;  but  all  this  is  patiently  borne  and  sub- 
mitted to  with  the  greatest  cheerfulness,  the  Satisfaction  of  being 
Land  holders  smooths  every  difficulty,  and  makes  them  prefer  this 
manner  of  living  to  that  comfortable  subsistance  which  they  could 
procure  for  themselves  and  their  families  by  working  at  the  Trades 
in  which  they  were  brought  up. 

The  Master  of  a  Glass-house;  which  was  set  up  here  a  few  years 
ago,  now  a  Bankrupt,  assured  me  that  his  ruin  was  owing  to  no 
other  cause  than  being  deserted  in  this  manner  by  his  servants, 
which  he  had  Imported  at  a  great  expence;  and  that  many  others 
had  suffered  and  been  reduced  as  he  was  by  the  same  Kind  of  Mis- 
fortune. 

The  little  Foundry  lately  set  up  near  this  Town,  for  making  small 
Iron  Potts  is  under  the  direction  of  a  few  private  persons,  and  as  yet 
very  inconsiderable. 

As  to  the  Foundaries  which  Mr  Hansenclaver  has  set  up  in  the 
different  parts  of  this  Country,  I  do  not  mention  them,  as  he  will  be 
able  to  give  your  Lordships  a  full  account  of  them  and  of  the  progress 


68  READINGS  IN  ECONOMIC  HISTORY 

he  has  already  made;  I  can  only  say  that  I  think  this  Province  is 
under  very  great  obligations  to  him  for  the  large  Sums  of  Money  he 
has  paid  out  here  in  promoting  the  cultivation  of  Hemp  and  introdu- 
cing the  valuable  manufactures  of  Iron  and  Pot-Ash. 

D.  Domestic  Manufacturing  in  New  England,  1761 l 

Many  of  the  industries  which  are  now  carried  on  in  factories  and  which  produce 
by  machinery  hi  large  quantities  for  sale  hi  a  market,  were  at  one  tune  carried  on 
within  the  household  by  hand  methods  and  for  family  consumption.  The  so-called 
domestic  manufactures  of  the  colonies  were  of  this  kind,  and  were  widespread, 
especially  hi  New  England  and  the  middle  colonies.  The  English  government 
never  objected  to  domestic  production  for  family  use,  though  it  did  forbid  manu- 
facturing textiles,  hats,  or  iron  and  steel  for  sale.  Consequently  the  colonists 
throughout  the  entire  colonial  period  carried  on  these  household  industries,  of 
which  the  textile  industry  was  the  most  important. 

They  are  almost  the  only  one  of  our  colonies  which  have  much 
of  the  woollen  and  linen  manufactures.  Of  the  former  they  have 
nearly  as  much  as  suffices  for  their  own  cloathing.  It  is  a  close  and 
strong,  but  a  coarse  and  stubborn  sort  of  cloth.  A  number  of  Pres- 
byterians from  the  North  of  Ireland,  driven  thence,  as  it  is  said,  by 
the  severity  of  their  landlords,  from  an  affinity  hi  religious  sentiments 
chose  New-England  as  their  place  of  refuge.  Those  people  brought 
with  them  their  skill  in  the  linen  manufactures,  and  meeting  with 
very  large  encouragement,  they  exercised  it  to  the  great  advantage 
of  this  colony.  At  present  they  make  large  quantities,  and  of  a  very 
good  kind;  their  principal  settlement  is  in  a  town,  which  in  compli- 
ment to  them  is  called  Londonderry.  Hats  are  made  in  New-England, 
which,  in  a  clandestine  way,  find  a  good  vent  in  all  the  other  colonies. 
The  setting  up  of  these  manufactures  has  been  in  a  great  measure 
matter  necessary  to  them ;  for  as  they  have  not  been  properly  encour- 
aged in  some  staple  commodity,  by  which  they  might  communicate 
with  their  mother  country,  while  they  were  cut  off  from  all  other  re 
sources,  they  must  either  have  abandoned  the  country,  or  have  founc 
means  of  employing  their  own  skill  and  industry  to  draw  out  of  it 
the  necessaries  of  life.  The  same  necessity,  together  with  the 
convenience  for  building  and  manning  ships,  has  made  them 
carriers  for  the  other  colonies. 


1  European  Settlements  in  America.    By  Edmund  Burke  (London,  1761), 
174-5- 


AGRICULTURE,   INDUSTRY  AND  TRADE  6g 

TRADE 
I.  TRADE  BETWEEN  ENGLAND  AND  BRITISH  COLONIES  IN  AMERICA 

An  Early  View  of  Colonial  Trade,  1729  1 

The  difference  between  the  southern  and  northern  colonies  in  their  relation  to 
English  trade  is  clearly  indicated  in  this  selection.  The  tobacco  plantations  and 
other  southern  colonies  sent  to  England  staples  which  she  desired  for  herself  or 
which  furnished  the  basis  for  a  lucrative  trade  with  Europe  —  "the  surest  way  of 
enriching  this  Kingdom."  The  northern  colonies,  on  the  other  hand,  while  they 
bought  largely  from  England,  could  send  few  of  their  own  products  in  return  and 
were  therefore  forced  to  secure  the  means  of  payment  by  trade  with  other  countries, 
or  to  manufacture  for  themselves.  Consequently  the  southern  colonies  were  pre- 
ferred during  the  earlier  colonial  period,  when  the  colonies  were  regarded  chiefly  as  a 
source  of  materials.  The  writer  was  a  Mercantilist,  who  believed  in  the  regulation 
of  trade  and  industry  by  the  government. 

CHAP.  XV. 

TRADE  between  England  and  the  Tobacco  Plantations. 

THE  Tobacco  Plantations  take  from  England  their  Cloathing, 
Household  Goods,  Iron  Manufactures  of  all  Sorts,  Saddles,  Bridles, 
Brass  and  Copper  Wares,  and  notwithstanding  their  dwelling  among 
the  Woods,  they  take  their  very  Turner's  Wares,  and  almost  every 
Thing  else  that  may  be  called  the  Manufacture  of  England:  So  that 
indeed  it  is  a  very  great  Number  of  People  that  are  employed  to  pro- 
vide a  sufficient  Supply  of  Goods  for  them. 

ENGLAND  takes  from  them  not  only  what  Tobacco  we  consume 
at  Home,  but  very  great  Quantities  for  Re-exportation,  which  may 
properly  be  said  to  be  the  surest  Way  of  enriching  this  Kingdom. 

CHAP.  XVI. 

TRADE  between  England  and  Carolina. 

CAROLINA  lies  in  as  happy  a  Climate  as  any  in  the  World,  from 
32  to  36  Degrees  of  Northern  Latitude.  The  Soil  is  generally  fertile: 
The  Rice  it  produces  is  said  to  be  the  best  in  the  World,  and  no 
Country  affords  better  Silk  than  has  been  brought  from  thence, 
though  for  Want  of  sufficient  Encouragement  the  Quantity  imported 
is  very  small.  .  .  .  The  Rice  Trade,  since  it  hath  been  made  an 
enumerated  Commodity,  is  under  great  Discouragement;  for  it  can- 

1  The  Trade  atid  Navigation  of  Great  Britain  considered:  shewing  that  the  surest 
way  for  a  Nation  to  increase  in  Riches,  is  to  prevent  the  Importation  of  such  Foreign 
Commodities  as  may  be  rais'd  at  Home.  By  Joshua  Gee  (London,  1729),  20-25. 


7o  READINGS  IN  ECONOMIC  HISTORY 

not  be  sent  directly  to  Portugal  and  Spain  as  formerly;  and  it  will 
not  bear  the  Charge  of  bringing  home  and  Re-shipping,  unless  it  be 
at  a  Time  when  the  Crops  in  the  Milanese  and  Egypt  prove  bad.  .  .  . 

CHAP.  XVII. 

TRADE  between  England  and  Pensilvania. 

PENSILVANIA  within  Forty  Years  has  made  wonderful  In- 
provements;  they  have  built  a  large  and  regular  City,  they  have 
cleared  great  Tracts  of  Land,  and  raised  very  great  Quantities  of 
Wheat  and  other  Provisions,  and  they  have  by  Way  of  Jamaica  beat 
out  a  very  great  Trade  for  their  Corn  and  Provisions 'to  the  Spanish 
West-Indies;  and  if  this  Trade  be  properly  nurs'd  up,  it  may  draw 
the  Spanish  Coast  very  much  to  depend  on  us  for  a  Supply  of  Flower, 
Bisket,  &°c.  which  may  be  of  great  Advantage  to  us. 

It  is  already  attended  with  that  good  Consequence,  that  it  hath 
supplied  them  with  Gold  and  Silver,  which  is  frequently  brought 
home  by  our  trading  Ships  from  thence,  and  has  very  much  enlarged 
their  Demands  upon  us  for  Broad-cloth,  Kersies,  Druggets,  Serges, 
Stuffs,  and  Manufactures  of  all  Sorts. 

THEY  supply  the  Sugar  Plantations  with  Pipes  and  Barrel- 
Staves,  and  other  Lumber,  with  Flower,  Bisket,  Pork,  &c.  But  this 
is  not  sufficient  for  their  Cloathing,  and  therefore  are  forced  to  make 
something  by  their  own  Labour  and  Industry  to  answer  that  End. 

CHAP.  XVIII. 

TRADE  between  England,  New- Jersey  and  New- York. 

THE  Provinces  of  New- Jersey  and  New-York  produce  much  the 
same  with  Pensilvania,  and  their  Traffic  is  much  the  same;  we  have 
what  Money  they  can  raise  to  buy  our  Manufactures  for  their  Cloath- 
ing, and  what  they  further  want,  they  are  forced  to  manufacture  for 
themselves  as  the  aforesaid  Colonies  do. 

CHAP.  XIX. 

TRADE  between  England  and  New-England. 

NEW-ENGLAND  takes  from  us  all  Sorts  of  Woollen  Manufac- 
tures, Linnen,  Haberdashery,  6°c.  To  raise  Money  to  pay  for  what  they 
take  of  us,  they  are  forced  to  visit  the  Spanish  Coasts,  where  they  pick 
up  any  commodity  they  can  trade  for:  They  carry  Lumber  and  Pro- 
visions to  the  Sugar  Plantations,  exchange  Provision  for  Logwood 
with  the  Logwood  Cutters  at  Campeachey.  They  send  Pipe  and  Barrel- 


AGRICULTURE,   INDUSTRY  AND  TRADE  71 

Staves  and  Fish  to  Spain,  Portugal,  and  the  Streights.  They  send 
Pitch,  Tar  and  Turpentine  to  England,  with  some  Skins:  But  all 
those  Commodities  fall  very  short  of  purchasing  their  Cloathing  in 
England;  and  therefore  what  other  Necessaries  they  want,  they  are 
forced  to  manufacture  for  themselves,  as  the  aforementioned 
Colonies. 

II.    NEW  ENGLAND 
A.   Commerce  of  New  England,  1748  l 

Owing  partly  to  the  sterility  of  the  soil  and  partly  to  the  colonial  policy  of  the 
mother  country,  by  which  the  natural  products  of  the  country  were  denied  access  to 
English  ports,  the  energies  of  New  England  were  diverted  from  the  channels  of 
agriculture  to  those  of  commerce.  Since  this  section  of  the  American  colonies  lay 
in  the  same  climatic  zone  as  England  itself,  and  therefore  produced  much  the  same 
things,  the  natural  products  of  New  England  were  for  the  most  part  placed  among 
the  non-enumerated  articles,  which  could  not  be  sent  to  England.  The  residents 
of  New  England  were  forced,  consequently,  either  to  find  other  markets  for  their 
goods,  or  to  engage  in  other  industries.  In  the  fisheries,  shipbuilding,  and  the 
carrying  trade  they  found  the  most  profitable  occupations,  and  with  the  profits 
from  these  were  able  to  purchase  large  quantities  of  manufactured  goods  from 
England.  The  following  extract  gives  a  brief  account  of  New  England  commerce, 
showing  the  important  products. 

The  goods  which  are  shipped  to  London  from  New  England  are 
the  following:  all  sorts  of  fish  caught  near  Newfoundland  and  else- 
where; train-oil  of  several  sorts;  whalebone,  tar,  pitch,  masts,  new 
ships,  of  which  a  great  number  is  annually  built,  a  few  hides,  and 
sometimes  some  sorts  of  wood.  The  English  islands  in  America, 
as  Jamaica  and  Barbadoes,  get  from  New  England,  fish,  flesh,  butter, 
cheese,  tallow,  horses,  cattle;  all  sorts  of  lumber,  such  as  pails, 
buckets,  and  hogsheads;  and  have  returns  made  in  rum,  sugar, 
molasses,  and  other  produces  of  the  country,  or  in  cash,  the  greatest 
part  of  all  which  they  send  to  London  (the  money  especially)  in  pay- 
ment of  the  goods  received  from  thence;  and  yet  all  this  is  insuffi- 
cient to  pay  off  the  debt. 

B.   Carrying  Trade  of  New  England,  1761 2 

In  this  extract  there  is  emphasized  the  part  which  the  shipping  of  New  England 
played  in  the  carrying  trade.  The  profits  of  New  England  ship  builders  and  owners 

1  Travels  into  North  America.     By  Peter  Kalm  (London,  1771).     In  Pinkerton, 
Voyages  and  Travels  (London,  1812),  XIII,  439. 

2  European  Settlements  in  America.     By  Edmund  Burke  (London,  1761),  II. 
173-7,  passim. 


72  READINGS  IN  ECONOMIC  HISTORY 

came  from  the  sale  of  their  vessels  and  also  from  their  use  as  carriers.  Burke 
justifies  this  trade  on  the  ground  that  the  profits  were  ultimately  spent  for  English 
manufactures,  which  otherwise  could  not  have  been  bought. 

That  we  may  be  enabled  to  form  some  judgment  of  the  wealth 
of  this  city,  ^Boston]  we  must  observe  that  from  Christmas  1747,  to 
Christmas  1748,  five  hundred  vessels  cleared  out  from  this  port  only, 
for  a  foreign  trade;  and  four  hundred  and  thirty  were  entered  inwards; 
to  say  nothing  of  coasting  and  fishing  vessels,  both  of  which  are 
extremely  numerous,  and  said  to  be  equal  in  number  to  the  others. 
Indeed  the  trade  of  New-England  is  great,  as  it  supplies  a  large  quan- 
tity of  goods  from  within  itself;  but  it  is  yet  greater,  as  the  people  of 
this  country  are  in  a  manner  the  carriers  for  all  the  colonies  of  North 
America  and  the  West-Indies,  and  even  for  some  parts  of  Europe. 
They  may  be  considered  in  this  respect  as  the  Dutch  of  America. 

The  commodities  which  the  country  yields  are  principally  masts 
and  yards,  for  which  they  contract  largely  with  the  royal  navy;  pitch, 
tar,  and  turpentine;  staves,  lumber,  boards;  all  sorts  of  provisions, 
beef,  pork,  butter  and  cheese  in  large  quantities;  horses  and  live  cattle; 
Indian  corn  and  pease;  cyder,  apples,  hemp  and  flax.  Their  peltry  trade 
is  not  very  considerable.  They  have  a  very  noble  cod  fishery  upon  their 
coast,  which  employs  a  vast  number  of  their  people :  they  are  enabled 
by  this  to  export  annually  above  thirty-two  thousand  quintals  of 
choice  cod  fish,  to  Spain,  Italy,  and  the  Mediterranean,  and  about 
nineteen  thousand  quintals  of  the  refuse  sort  to  the  West-Indies,  as 
food  for  the  negroes.  The  quantity  of  spirits,  which  they  distil 
in  Boston  from  the  molasses  they  bring  in  from  all  parts  of  the  West- 
Indies,  is  as  surprising  as  the  cheap  rate  at  which  they  vend  it,  which 
is  under  two  shillings  a  gallon.  With  this  they  supply  almost  all 
the  consumption  of  our  Colonies  in  North  America,  the  Indian  trade 
there,  the  vast  demands  of  their  own  and  the  Newfoundland  fishery, 
and  in  great  measure  those  of  the  African  trade;  but  they  are  more 
famous  for  the  quantity  and  cheapness,  than  for  the  excellency  of 
their  rum.  .  .  . 

The  business  of  ship-building  is  one  of  the  most  considerable 
which  Boston  or  the  other  sea-port  towns  in  New-England  carry  on. 
Ships  are  sometimes  built  here  upon  commission;  but  frequently, 
the  merchants  of  New  England  have  them  constructed  upon  their 
own  account;  and  loading  them  with  the  produce  of  the  colony, 
naval  stores,  fish,  and  fish-oil  principally,  they  send  them  out  upon  a 
trading  voyage  to  Spain,  Portugal,  or  the  Mediterranean;  where, 
having  disposed  of  their  cargo,  they  make  what  advantage  they 


AGRICULTURE,  INDUSTRY  AND  TRADE  73 

can  by  freight,  until  such  time  as  they  can  sell  the  vessel  herself  to 
advantage,  which  they  seldom  fail  to  do  in  a  reasonable  time.  They 
receive  the  value  of  the  vessel,  as  well  as  of  the  freight  of  the  goods, 
which  from  time  to  time  they  carried,  and  of  the  cargo  with  which 
they  sailed  originally,  in  bills  of  exchange  upon  London;  for  as  the 
people  of  New  England  have  no  commodity  to  return  for  the  value 
of  above  a  hundred  thousand  pounds,  which  they  take  in  various 
sorts  of  goods  from  England,  but  some  naval  stores,  and  those  in  no 
great  quantities,  they  are  obliged  to  keep  the  balance  somewhat  even 
by  this  circuitous  commerce,  which,  though  not  carried  on  with  Great 
Britain  nor  with  British  vessels,  yet  centers  in  its  profits,  where  all  the 
money  which  the  colonies  can  make  in  any  manner  must  center  at  last. 
I  know  that  complaints  have  been  made  of  this  trade,  principally 
because  the  people  of  New-England,  not  satisfied  with  carrying  out 
their  own  produce,  become  carriers  for  the  other  colonies,  particu- 
larly for  Virginia  and  Maryland,  from  whom  they  take  tobacco, 
which  in  contempt  of  the  act  of  navigation,  they  carry  directly  to 
the  foreign  market.  Where  not  having  the  duty  and  accumulated 
charges  to  which  the  British  merchant  is  liable  to  pay,  they  in  a  man- 
ner wholly  out  him  of  the  trade.  Again,  our  sugar  colonies  complain 
as  loudly,  that  the  vast  trade  which  New  England  drives  in  lumber, 
live  stock,  and  provisions,  with  the  French  and  Dutch  sugar  islands, 
particularly  with  the  former,  enables  these  islands,  together  with  the 
internal  advantages  they  possess,  greatly  to  undersell  the  English 
plantations.  That,  the  returns  which  the  people  of  New  England 
make  from  these  islands  being  in  sugar,  or  the  productions  of  sugar, 
syrups,  and  molasses,  the  rum  which  is  thence  distilled  prevents  the 
sale  of  our  West-India  rum.  That  this  trade  proves  doubly  disad- 
vantageous to  our  sugar  islands;  first,  as  it  enables  the  French  to 
sell  their  sugars  cheaper  than  they  could  otherwise  afford  to  do;  and 
then  as  it  finds  them  a  market  for  their  molasses,  and  other  refuse 
of  sugars,  for  which  otherwise  they  could  find  no  market  at  all;  be- 
cause rum  interferes  with  brandy,  a  considerable  manufacture  of 
Old  France. 

C.   Exports  of  New  England,  1763  l 

The  extent  to  which  the  fisheries  contributed  to  the  wealth  of  New  England, 
and  its  importance  in  the  foreign  trade  of  that  section  are  both  shown  by  this  extract. 

I  shall  conclude  this  account,  with  a  table  of  the  exports  of  this 
province  since  the  peace  [of  1763]. 

1  American  Husbandry.     By  an  American  (London,  1775),  I,  59-61. 


74  READINGS  IN  ECONOMIC  HISTORY 

Cod-fish  dried,  10,000  tons,  at  10  1 £100,000 

Whale  and  cod-oil,  8500  tons,  at  15  1 127,500 

Whale-bone,  28  tons,  at  300  1 8,400 

Pickled  mackerel  and  shads,  15,000  barrels  at  205...  15,000 

Masts,  boards,  staves,  shingles,  &c 75,000 

Ships  about  70  sail,  at  700  1 49,000 

Turpentine,  tar,  and  pitch,  1500  barrels,  at  8s 600 

Horses,  and  live  stock, 37,ooo 

Pot-ash,  14,000  barrels,  at  503 35,ooo 

Pickled  beef  and  pork,  19,000  barrels,  at  303 28,500 

Bees-wax,  and  sundries, 9,000 

Total  £485,000 

Upon  this  table  I  must  observe,  that  the  fishery  amounts  to 
250,900  1.  of  it;  or  rather  more  than  half  the  total,  which  shews  what 
a  great  proportion  of  the  people  of  this  colony  are  employed  in  it. 
The  other  half  is  the  produce  of  their  lands,  for  so  both  ships  and 
pot-ash  must  be  esteemed;  Cattle  and  beef,  pork,  &c.  came  to  65,500 1. 
all  the  rest  is  timber  or  what  is  made  of  timber;  this  is  a  proportion 
that  gives  us  at  once  a  tolerable  idea  of  the  colony.  We  are  not 
from  hence  to  suppose,  that  the  great  body  of  the  landed  interests 
in  this  country  has,  like  Canada,  no  other  resource  to  purchase  for- 
eign commodities  with,  than  this  small  export.  The  case  is  very 
different,  New  England  enjoys  a  vast  fishery,  and  a  great  trade,  which 
brings  in  no  slight  portion  of  wealth.  The  most  considerable  commer- 
cial town  in  all  America  is  in  this  province ;  and  another  circumstance 
is  the  increase  of  population.  These  causes  operate  so  as  to  keep 
up  a  considerable  circulation  within  the  colony.  Boston  and  the 
shipping  are  a  market  which  enriches  the  country  interest  far  more 
than  the  above  mentioned  export,  which,  for  so  numerous  a  people, 
is  very  inconsiderable.  By  means  of  this  internal  circulation,  the 
farmers  and  country  gentlemen  are  enabled  very  amply  to  purchase 
whatever  they  want  from  abroad. 

III.   MIDDLE  COLONIES 
A.   Foreign  Trade  of  New  York,  1748 1 

The  commerce  of  the  middle  colonies  steadily  increased,  and  in  time  both  New 
York  and  Philadelphia  passed  Boston  as  important  seaports.  The  middle  colonies 
carried  on  a  trade  as  extensive  as  that  of  New  England,  but  made  up  to  a  greater 
extent  of  agricultural  products,  such  as  provisions  of  every  sort.  Peter  Kalm,  with 
his  characteristic  thoroughness,  gives  a  clear  picture  of  the  foreign  trade  of  New 
York  in  the  middle  of  the  i8th  century. 

1  Travels  into  North  America.  By  Peter  Kalm  (London,  1771).  In  Pinkerton, 
Voyages  and  Travels  (London,  1812),  XIII,  458-9. 


AGRICULTURE,   INDUSTRY  AND   TRADE  75 

New  York  probably  carries  on  a  more  extensive  commerce  than  any 
town  in  the  English  North  American  provinces;  at  least  it  may  be 
said  to  equal  them;  Boston  and  Philadelphia  however  come  very 
near  up  to  it.  The  trade  of  New  York  extends  to  many  places;  and 
it  is  said  they  send  more  ships  from  thence  to  London  than  they  do 
from  Philadelphia.  They  export  to  that  capital  all  the  various  sorts 
of  skins  which  they  buy  of  the  Indians,  sugar,  logwood,  and  other 
dying  woods,  rum,  mahogany,  and  many  other  goods  which  are  the 
produce  of  the  West  Indies;  together  with  all  the  specie  which  they 
get  in  the  course  of  trade.  Every  year  they  build  several  ships  here, 
which  are  sent  to  London,  and  there  sold;  and  of  late  years  they 
have  shipped  a  quantity  of  iron  to  England.  In  return  for  these, 
they  import  from  London  stuffs,  and  every  other  article  of  English 
growth  or  manufacture,  together  with  all  sorts  of  foreign  goods.  Eng- 
land, and  especially  London,  profits  immensely  by  its  trade  with  the 
American  colonies;  for  not  only  New  York,  but  likewise  all  the  other 
English  towns  on  the  continent,  import  so  many  articles  from  England, 
that  all  their  specie,  together  with  the  goods  which  they  get  in  other 
countries,  must  altogether  go  to  Old  England,  in  order  to  pay  the 
amount,  to  which  they  are  however  insufficient.  From  hence  it  ap- 
pears how  much  a  well-regulated  colony  contributes  to  the  increase 
and  welfare  of  its  mother  country. 

New  York  sends  many  ships  to  the  West  Indies,  with  flour,  corn, 
biscuit,  timber,  tuns,  boards,  flesh,  fish,  butter,  and  other  provisions; 
together  with  some  of  the  few  fruits  that  grow  here.  Many  ships 
go  to  Boston  in  New  England,  with  corn  and  flour;  and  take  in 
exchange,  flesh,  butter,  timber,  different  sorts  of  fish,  and  other 
articles,  which  they  carry  further  to  the  West  Indies.  They  now 
and  then  take  rum  from  thence,  which  is  distilled  there  in  great 
quantities,  and  sell  it  here  with  a  considerable  advantage.  Some- 
times they  send  yachts  with  goods  from  New  York  to  Philadelphia, 
and  at  other  times  yachts  are  sent  from  Philadelphia  to  New  York, 
which  is  only  done,  as  appears  from  the  gazettes,  because  certain 
articles  are  cheaper  at  one  place  than  at  the  other.  They  send 
ships  to  Ireland  every  year,  laden  with  all  kinds  of  West  India  goods, 
but  especially  with  linseed,  which  is  reaped  in  this  province.  I 
have  been  assured  that  in  some  years  no  less  than  ten  ships  have  been 
sent  to  Ireland,  laden  with  nothing  but  linseed,  because  it  is  said  the 
flax  in  Ireland  does  not  afford  good  seed;  but  probably  the  true  reason 
is  this;  the  people  of  Ireland,  in  order  to  have  the  better  flax,  make 
use  of  the  plant  before  the  seed  is  ripe,  and  therefore  are  obliged  to 


76  READINGS  IN  ECONOMIC  HISTORY 

send  for  foreign  seed ;   and  hence  it  becomes  one  of  the  chief  articles 
in  trade. 

At  this  time  a  bushel  of  linseed  is  sold  for  eight  shillings  of  New 
York  currency,  or  exactly  a  piece  of  eight. 

The  goods  which  are  shipped  to  the  West  Indies  are  sometimes 
paid  for  with  ready  money,  and  sometimes  with  West  India  goods, 
which  are  either  first  brought  to  New  York,  or  immediately  sent  to 
England  or  Holland.  If  a  ship  does  not  chuse  to  take  in  West  India 
goods  in  its  return  to  New  York,  or  if  nobody  will  freight  it,  it  often 
goes  to  Newcastle  in  England,  to  take  in  coals  for  ballast,  which  when 
brought  home  sell  for  a  pretty  good  price.  In  many  parts  of  the  town 
coals  are  made  use  of,  both  for  kitchen  fires,  and  in  rooms,  because 
they  are  reckoned  cheaper  than  wood,  which  at  present  costs  thirty 
shillings  of  New  York  currency  per  fathom;  of  which  measure  I  have 
before  made  mention.  New  York  has  likewise  some  intercourse  with 
South  Carolina;  to  which  it  sends  corn,  flour,  sugar,  rum,  and  other 
goods,  and  takes  rice  in  return,  which  is  almost  the  only  commodity 
exported  from  South  Carolina. 

The  goods  with  which  the  province  of  New  York  trades  are  not 
very  numerous.  They  chiefly  export  the  skins  of  animals  which  are 
bought  of  the  Indians  about  Oswego ;  great  quantities  of  boards,  com- 
ing for  the  most  part  from  Albany;  timber  and  ready-made  lumber, 
from  that  part  of  the  country  which  lies  about  the  river  Hudson ;  and 
lastly,  wheat,  flour,  barley,  oats,  and  other  kinds  of  corn,  which  are 
brought  from  New  Jersey  and  the  cultivated  parts  of  this  province. 
I  have  seen  yachts  from  New  Brunswick,  laden  with  wheat  which  lay 
loose  on  board,  and  with  flour  packed  up  in  tuns;  and  also  with  great 
quantities  of  linseed.  New  York  likewise  exports  some  flesh  and 
other  provisions  out  of  its  own  province,  but  they  are  very  few;  nor  is 
the  quantity  of  pease,  which  the  people  about  Albany  bring,  much 
greater.  Iron  however  may  be  had  more  plentifully,  as  it  is  found  in 
several  parts  of  this  province,  and  is  of  a  considerable  goodness;  but 
all  the  other  products  of  this  country  are  of  little  account. 

Most  of  the  wine,  which  is  drank  here  and  in  the  other  colonies, 
is  brought  from  the  isle  of  Madeira,  and  is  very  strong  and  fiery. 

No  manufactures  of  note  have  as  yet  been  established  here;  at 
present  they  get  all  manufactured  goods,  such  as  woollen  and  linen 
cloth,  &c.  from  England,  and  especially  from  London. 

The  river  Hudson  is  very  convenient  for  the  commerce  of  this 
city;  as  it  is  navigable  for  near  an  hundred  and  fifty  English  miles 
up  the  country,  and  falls  into  the  bay  not  far  from  the  town,  on  its 


AGRICULTURE,   INDUSTRY  AND  TRADE  77 

western  side.  During  eight  months  of  the  year  this  river  is  full  of 
yachts,  and  other  greater  and  lesser  vessels,  either  going  to  New  York 
or  returning  from  thence,  laden  either  with  inland  or  foreign  goods. 
I  cannot  make  a  just  estimate  of  the  ships  that  annually  come  to 
this  town  or  sail  from  it.  But  I  have  found,  by  the  Pensylvania 
gazettes,  that  from  the  first  of  December  in  1729,  to  the  fifth  of  De- 
cember in  the  next  year,  two  hundred  and  eleven  ships  entered  the 
port  of  New  York,  and  two  hundred  and  twenty- two  cleared  it;  and 
since  that  time  there  has  been  a  great  increase  of  trade  here. 

B.   Exports  of  New  York  and  Pennsylvania,  1763-1766  l 

An  interesting  and  probably  fairly  reliable  estimate  of  the  actual  value  of  the 
exports  from  New  York  after  the  conclusion  of  the  Seven  Years'  War  is  here  given. 
It  should  be  noted  that  practically  everything  is  the  product  of  the  extractive 
industries,  and  four-fifths  are  derived  from  agriculture. 

I  shall  next  lay  before  the  reader  the  exports  of  this  province  [New 
York]  as  taken  on  an  average  of  three  years  since  the  peace  [of  1763], 

Flour  and  biscuit  250,000  barrels,  at  205 £250,000 

Wheat  70,000  qrs 70,000 

Beans,  pease,  oats,  Indian  corn  and  other  grains,. .          40,000 

Salt  beef,  pork,  hams,  bacon,  and  venison, 18,000 

Bees  wax,  30,000  Ib.  at  is 1,500 

Tongues,  butter,  and  cheese, 8,000 

Flax  seed,  7000  hhds.  at  403 14,000 

Horses  and  live  stock 1 7,000 

Product  of  cultivated  lands, 418,500 

Timber  planks,  masts,  boards,  staves,  and  shingles         25,000 

Pot  ash,  7000  hhds 14,000 

Ships  built  for  sale,  20,  at  £700 14,000 

Copper  ore,  and  iron  in  bars  and  pigs 20,000 

£526,000 

Let  me  upon  this  table  observe,  that  far  the  greater  part  of  this 
export  is  the  produce  of  the  lands  including  timber;  and  even  the 
metals  may  be  reckoned  in  the  same  class;  this  shews  us  that  agri- 
culture in  New  York  is  of  such  importance  as  to  support  the  most 
considerable  part  of  the  province  without  the  assistance  of  either 
the  fishery  or  of  commerce;  not  that  the  city  of  New  York  has  not 
traded  largely,  perhaps  equal  to  Boston,  but  the  effects  of  that  trade 
have  been  chiefly  the  introduction  of  money  by  the  means  of  barter, 
besides  the  exportation  of  their  own  products:  whereas  New  England's 
exports  consist  five  parts  in  six  of  fish,  and  the  other  products  of 

1  American  Husbandry.    By  an  American  (London,  1775),  1, 124-5, 181-2. 


78  READINGS  IN  ECONOMIC  HISTORY 

the  fishery;  a  strong  proof  that  agriculture  is  far  more  profitable  in 
one  country,  than  in  the  other;  for  settlers  in  colonies  will  never  take 
to  the  sea,  in  a  country  whose  agriculture  yields  well;  but  in  very  bad 
climates,  and  such  as  destroy  instead  of  cherishing  the  products  of  the 

earth,  any  branch  of  industry  pays  better  than  cultivating  the  earth 

Before  I  conclude  this  chapter,  I  shall  insert  a  table  of  the  exports 
of  the  province  [^Pennsylvania]. 

Biscuit  flour,  350,000  barrels,  at  205 £350,000 

Wheat,  100,000  qrs.  at  205 100,000 

Beans,  pease,  oats,  Indian  corn,  and  other  grain,. .  12,000 

Salt  beef,  pork,  hams,  bacon,  and  venison, 45,000 

Bees  wax,  20,000  Ib.  at  is 1,000 

Tongues,  butter,  and  cheese, 10,000 

Deer,  and  sundry  other  sorts  of  skins, 50,000 

Live  stock  and  horses, 20,000 

Flax  seed,  15,000  hhds.  at  405 30,000 

Timber  plank,  masts,  boards,  staves,  and  shingles  35,ooo 

Ships  built  for  sale,  25,  at  £700 17,500 

Copper  ore,  and  iron  in  pigs  and  bars, 35,ooo 

Total  £705,500 

Upon  this  account  I  must  observe,  that  far  the  greatest  part  is  the 
cultivated  produce  of  the  land;  which  is  the  very  contrary  to  New 
England,  whose  lands  yield  nothing  to  export.  In  proportion  to  this 
circumstance,  is  the  value  of  a  colony,  for  it  is  the  nature  of  coloniza- 
tion, that  the  people  ought,  on  first  principles,  to  support  them- 
selves by  agriculture  alone.  Wheat  appears  to  be  the  grand  export 
of  this  province:  that,  and  other  articles  of  food,  amount  to  above 
half  a  million,  which  is  a  vast  sum  of  money  to  export  regularly, 
besides  feeding  every  rank  of  people  in  the  utmost  plenty;  but  of  late 
years  this  has  risen  to  much  more,  for  wheat,  instead  of  being  at  2os. 
a  quarter,  is  at  above  305.  No  circumstance  in  the  world  can  be  more 
strong,  in  proof  of  the  temperature,  moderation  and  healthiness  of  the 
climate,  than  this  of  exporting  such  quantities  of  wheat,  which  through- 
out the  globe,  thrives  nowhere  in  climates  insalubrious  to  mankind: . . . 

IV.   SOUTHERN  COLONIES 
A.   Report  on  Virginia,  1671 l 

A  forceful  and  characteristic  report  was  made  by  Governor  William  Berkele> 
in  response  to  a  request  from  the  British  Lords  Commissioners  of  Trade  anc 
Plantations  for  information  as  to  conditions  in  Virginia  in  1671.  Berkeley 
well  qualified  to  speak,  for  he  was  governor  of  that  province  from  1641  to  1677. 

1  Statutes  at  Large;  being  a  Collection  of  A II  the  Laws  of  Virginia.     By  W. 
Hening  (New  York,  1823),  II,  514-7. 


AGRICULTURE,   INDUSTRY  AND  TRADE  79 

12.  What  commodities  are  there  of  the  production,  growth  and 
manufacture  of  your  plantation;  and  particularly,  what  materials 
are  there  already  growing,  or  may  be  produced  for  shipping  in  the 
same? 

Answer.  Commodities  of  the  growth  of  our  country,  we  never 
had  any  but  tobacco,  which  in  this  yet  is  considerable,  that  it 
yields  his  majesty  a  great  revenue;  but  of  late,  we  have  begun  to 
make  silk,  and  so  many  mulberry  trees  are  planted,  and  planting, 
that  if  we  had  skilfull  men  from  Naples  or  Sicily  to  teach  us  the  art 
of  making  it  perfectly,  in  less  than  half  an  age,  we  should  make  as 
much  silk  in  an  year  as  England  did  yearly  expend  three  score  years 
since;  but  now  we  hear  it  is  grown  to  a  greater  excess,  and  more  com- 
mon and  vulgar  usage.  Now,  for  shipping,  we  have  admirable  masts 
and  very  good  oaks;  but  for  iron  ore  I  dare  not  say  there  is  sufficient 
to  keep  one  iron  mill  going  for  seven  years.  .  .  . 

1 8.  What  number  of  ships  do  trade  yearly  to  and  from  your 
plantation,  and  of  what  burthen  are  they? 

Answer.  English  ships,  near  eighty  come  out  of  England  and 
Ireland  every  year  for  tobacco;  few  New  England  ketches;  but  of 
our  own,  we  never  yet  had  more  than  two  at  one  time,  and  those 
not  more  than  twenty  tuns  burthen. 

19.  What  obstructions  do  you  find  to  the  improvement  of  the 
trade  and  navigation  of  the  plantations  within  your  government? 

Answer.  Mighty  and  destructive,  by  that  severe  act  of  parlia- 
ment which  excludes  us  the  having  any  commerce  with  any  nation 
in  Europe  but  our  own,  so  that  we  cannot  add  to  our  plantation  any 
commodity  that  grows  out  of  it,  as  olive  trees,  cotton  or  vines. 
Besides  this,  we  cannot  procure  any  skilfull  men  for  one  now  hopefull 
commodity,  silk;  for  it  is  not  lawfull  for  us  to  carry  a  pipe  stave,  or 
a  barrel  of  corn  to  any  place  in  Europe  out  of  the  king's  dominions. 
If  this  were  for  his  majesty's  service  or  the  good  of  his  subjects, 
we  should  not  repine,  whatever  our  sufferings  are  for  it;  but  on  my 
soul,  it  is  the  contrary  for  both.  And  this  is  the  cause  why  no  small 
or  great  vessells  are  built  here;  for  we  are  most  obedient  to  all  laws, 
whilst  the  New  England  men  break  through,  and  men  trade  to  any 
place  that  their  interest  lead  them. 

20.  What  advantages  or  improvements  do  you  observe  that  may 
be  gained  to  your  trade  and  navigation? 

Answer.     None,  unless  we  had  liberty  to  transport  our  pipe  staves, 
timber  and  corn  to  other  places  besides  the  king's  dominions.  .  .  . 
23.  What  course  is  taken  about  the  instructing  the  people,  within 


8o  READINGS  IN  ECONOMIC  HISTORY 

your  government  in  the  Christian  religion;    and  what  provision  is 
there  made  for  the  paying  of  your  ministry? 

Answer.  The  same  course  that  is  taken  in  England  out  of  towns; 
every  man  according  to  his  ability  instructing  his  children.  We  have 
forty  eight  parishes,  and  our  ministers  are  well  paid,  and  by  my 
consent  should  be  better  if  they  would  pray  oftener  and  preach  less.  But 
of  all  other  commodities,  so  of  this,  the  worst  are  sent  us,  and  we  had 
few  that  we  could  boast  of,  since  the  persicution  in  Cromwell's  tiranny 
drove  divers  worthy  men  hither.  But,  I  thank  God,  there  are  no  free 
schools  nor  printing,  and  I  hope  we  shall  not  have  these  hundred  years; 
for  learning  has  brought  disobedience,  and  heresy,  and  sects  into  the 
world,  and  printing  has  divulged  them,  and  libels  against  the  best 
government.  God  keep  us  from  both! 

B.   Exports  of  the  Southern  Colonies,  1763  l 

The  author  of  American  Husbandry  was  a  thorough-going  Mercantilist  who 
approved  of  the  southern  colonies  because  they  exported  to  England  "true  staples" 
and  did  not  compete  with  her,  while  he  equally  disapproved  of  the  commerce  of 
the  New  England  colonies.  The  proportion  which  tobacco  and  rice  form  of  the 
total  exports  should  be  noted  in  these  tables. 

To  shew  the  vast  importance  of  these  colonies  [[Virginia  and 
MarylandJ  to  Great  Britain,  it  will  be  necessary  to  lay  before  the  reader 
the  last  accounts  of  their  exports  [1763?],  from  which  we  shall  also 
see  what  proportion  their  common  husbandry  bears  to  their  tobacco. 

Tobacco,  96,000  hogsheads,  at  8 1 £768,000 

Indian  corn,  beans,  pease,  &c 30,000 

Wheat,  40,000  quarters,  at  205 40,000 

Deer  and  other  skins 25,000 

Iron  in  bars  and  pigs 35>°oo 

Sassafras,  snake-root,  ginseng,  &c 7,000 

Masts,  plank,  staves,  turpentine,  and  tar 55,ooo 

Flax-seed,  7000  hogsheads,  at  40  s 14,000 

Pickled  pork,  beef,  hams,  and  bacon 15,000 

Ships  built  for  sale,  30  at  1000  1 30,000 

Hemp  1000  tons  at  21  1.  (besides  4000  tons  more 

and  2000  of  flax  worked  up  for  their  own  use) ...  21 ,000 

Total  i  ,040,000 

Upon  this  table  I  must  observe  once  more,  how  extremely  impor- 
tant these  colonies  are  to  the  mother  country.  To  raise  above  a 
million  sterling,  the  greatest  part  of  which  are  true  staples,  and  the 

1  American  Husbandry.    By  an  American  (London,  1775),!,  256-7;  11,32-3. 


AGRICULTURE,  INDUSTRY  AND  TRADE  81 

rest  necessary  for  the  West  Indies,  with  no  fish,  whale  bone,  oil,  &c. 
commodities  which  some  of  the  colonies  have  run  away  with  from 
Britain,  by  rivalling  her  in  her  fishery  —  possessing  no  manufactures, 
even  to  such  a  degree  that  all  attempts  to  bring  the  people  into  towns 
have  proved  vain.  By  manufactures,  I  mean  those  for  sale;  for  as 
to  private  families  working  wool,  hemp,  and  flax  for  their  own  use, 
it  is  what  many  do  all  over  America,  and  are  necessitated  to  do,  for 
want  of  money  and  commodities  to  buy  them.  A  colony  so  truly 
important,  I  say,  deserves  every  attention  from  the  mother  country, 
and  every  encouragement  to  induce  settlers  to  fix  in  it.  ... 

The  following  is  a  state  of  the  exports  of  Georgia,  upon  an  average  of 
three  years  since  the  peace  [of  /7<5j]. 

£ 

18000  barrels  of  rice,  at  403 36,000 

Indigo,  1 7000  Ib.  at  2S i  ,700 

Silk,  2500  Ib.  at  2os 2,500 

Deer  and  other  skins 1 7,000 

Boards,  staves,  &c 1 1 ,000 

Tortoise-shell,  drugs,  cattle,  &c 6,000 

£  74,200 


CHAPTER  III 
LABOR,  EXCHANGE,  AND  POPULATION,  1607-1763 

LABOR 
I.   SCARCITY  or  LABOR 

A.   High  Wages  in  Pennsylvania,  1698  1 

Owing  to  the  large  extent  of  practically  free  land  in  the  colonies  and  the  ease 
with  which  an  industrious  man  could  establish  himself  as  an  independent  farmer, 
very  few  persons  were  content  to  remain  as  hired  laborers.  Hence  labor  —  that 
is  hired  labor  —  was  scarce  throughout  the  whole  of  the  colonial  period,  and  wages 
were  high.  Wages  were  high  both  because  labor  was  scarce,  and  also  because  it 
was  very  productive  and  the  employer  could  afford  to  pay  high  wages.  The  writer 
was  for  seventeen  years  a  resident  of  a  Quaker  settlement. 

Labouring-Men  have  commonly  here  [Pennsylvania^,  between 
14  and  15  Pounds  a  Year,  and  their  Meat,  Drink,  Washing  and  Lodg- 
ing; and  by  the  Day  their  Wages  is  generally  between  Eighteen 
Pence  and  Half  a  Crown,  and  Diet  also;  But  in  Harvest  they  have 
usually  between  Three  and  Four  Shillings  each  Day,  and  Diet.  The 
Maid  Servants  Wages  is  commonly  betwixt  Six  and  Ten  Pounds 
per  Annum,  with  very  good  Accommodation.  And  for  the  Women 
who  get  their  Livelihood  by  their  own  Industry,  their  Labour  is  very 
dear,  for  I  can  buy  in  London  a  Cheese-Cake  for  Two  Pence,  bigger 
than  theirs  at  that  price  when  at  the  same  time  their  Milk  is  as  cheap 
as  we  can  buy  it  in  London,  and  their  Flour  cheaper  by  one  half. 

Corn  and  Flesh,  and  what  else  serves  Man  for  Drink,  Food  and 
Rayment,  is  much  cheaper  here  than  in  England,  or  elsewhere;  but 
the  chief  reason  why  Wages  of  Servants  of  all  sorts  is  much  higher 
here  than  there,  arises  from  the  great  Fertility  and  Produce  of  the 
Place;  besides  if  these  large  Stipends  were  refused  them,  they  would 
quickly  set  up  for  themselves,  for  they  can  have  Provision  very  cheap, 

1  An  Historical  and  Geographical  Account  of  the  Province  and  Country  of  Penstt- 
vania  (London,  1698).  By  Gabriel  Thomas.  In  Original  Narratives  of  Early 
American  History.  Edited  by  J.  F.  Jameson  (New  York,  1910),  XIII,  328-9. 
Printed  by  permission  of  the  editor  and  the  publishers,  Charles  Scribner's  Sons. 


LABOR,  EXCHANGE  AND   POPULATION  83 

and  Land  for  a  very  small  matter,  or  next  to  nothing  in  comparison 
of  the  Purchace  of  Lands  in  England;  and  the  Farmers  there,  can 
better  afford  to  give  that  great  Wages  than  the  Farmers  in  England 
can,  for  several  Reasons  very  obvious. 

As  First,  their  Land  costs  them  (as  I  said  but  just  now)  little  or 
nothing  in  comparison,  of  which  the  Farmers  commonly  will  get 
twice  the  encrease  of  Corn  for  every  Bushel  they  sow,  that  the 
Farmers  in  England  can  from  the  richest  Land  they  have. 

In  the  Second  place,  they  have  constantly  good  price  for  their 
Corn  by  reason  of  the  great  and  quick  vent  into  Barbadoes  and  other 
Islands;  through  which  means  Silver  is  become  more  plentiful  than 
here  in  England,  considering  the  Number  of  People,  and  that  causes 
a  quick  Trade  for  both  Corn  and  Cattle;  and  that  is  the  reason 
that  Corn  differs  now  from  the  Price  formerly,  else  it  would  be  at 
half  the  Price  it  was  at  then;  for  a  Brother  of  mine  (to  my  own  par- 
ticular knowledge)  sold  within  the  compas  of  one  Week  about  One 
Hundred  and  Twenty  fat  Beasts,  most  of  them  good  handsom  large 
Oxen. 

Thirdly,  They  pay  no  Tithes,  and  their  Taxes  are  inconsiderable; 
the  Place  is  free  for  all  Persuasions,  in  a  Sober  and  Civil  way;  for 
the  Church  of  England  and  the  Quakers  bear  equal  Share  in  the 
Government.  They  live  Friendly  and  Well  together;  there  is  no 
Persecution  for  Religion,  nor  ever  like  to  be;  'tis  this  that  knocks 
all  Commerce  on  the  Head,  together  with  high  Imposts,  strict  Laws, 
and  cramping  Orders.  Before  I  end  this  Paragraph,  I  shall  add 
another  Reason  why  Womens  Wages  are  so  exhorbitant;  they  are 
not  yet  very  numerous,  which  makes  them  stand  upon  high  Terms 
for  their  several  Services,  hi  Sempstering,  Washing,  Spinning,  Knit- 
ting, Sewing,  and  in  all  the  other  parts  of  their  Imployments;  for  they 
have  for  Spinning  either  Worsted  or  Linen,  Two  Shillings  a  Pound, 
and  commonly  for  Knitting  a  very  Course  pair  of  Yarn  Stockings, 
they  have  half  a  Crown  a  pair;  moreover  they  are  usually  Marry 'd 
before  they  are  Twenty  Years  of  Age,  and  when  once  in  that  Noose, 
are  for  the  most  part  a  little  uneasie,  and  make  their  Husbands  so 
too,  till  they  procure  them  a  Maid  Servant  to  bear  the  burden  of  the 
Work,  as  also  in  some  measure  to  wait  on  them  too. 

B.   High  Wages  in  New  England,  1775  1 

After  one  hundred  and  fifty  years  of  colonization  the  same  complaint  of  scarcity 
of  labor  and  high  wages  was  still  heard  as  at  the  beginning.  High  wages  have 

1  American  Husbandry.     By  an  American  (London,  1775),  I,  73. 


84  ECONOMIC  READINGS  IN  HISTORY 

always  been  characteristic  of  the  United  States  for  the  reason  that  the  laborer  has  — 
at  least  until  the  last  generation  —  had  an  economic  alternative:  he  had  the  choice 
of  working  for  wages  or  of  farming  practically  free  land  on  his  own  account.  Hence 
wages  had  to  be  at  least  as  high  as  the  return  an  independent  farmer  could  gain  for 
himself  from  his  land,  which  on  the  new  lands  of  the  colonial  period  was  considerable. 

I  have  more  than  once  mentioned  the  high  price  of  labour:  this 
article  depends  on  the  circumstance  I  have  now  named;  where 
families  are  so  far  from  being  burdensome,  men  marry  very  young, 
and  where  land  is  in  such  plenty,  men  very  soon  become  farmers, 
however  low  they  set  out  in  life.  Where  this  is  the  case,  it  must  at 
once  be  evident  that  the  price  of  labour  must  be  very  dear;  nothing 
but  a  high  price  will  induce  men  to  labour  at  all,  and  at  the  same 
time  it  presently  puts  a  conclusion  to  it  by  so  soon  enabling  them  to 
take  a  piece  of  waste  land.  By  day  labourers,  which  are  not  common 
in  the  colonies,  one  shilling  will  do  as  much  in  England  as  half  a 
crown  in  New  England.  This  makes  it  necessary  to  depend  prin- 
cipally on  [indented]]  servants,  and  on  labourers  who  article  them- 
selves to  serve  three,  five,  or  seven  years,  which  is  always  the  case 
with  newcomers  who  are  in  poverty. 

II.   INDENTED  SERVANTS 
A.   Servants  and  Slaves  in  America,  1748  1 

At  least  two  factors  which  an  employer  of  labor  must  count  upon  are  sufficiency 
and  permanency.  But  there  were  not  enough  free  hired  laborers  in  the  colonies  to 
do  the  work,  nor  could  an  employer  count  upon  retaining  these  laborers  for  any 
definite  length  of  time.  Hence  some  form  of  compulsory  labor  was  eagerly  resorted 
to,  and  both  indented  servants  and  slaves  were  made  use  of.  The  terms  of  the 
former  ran  for  a  short  period  and  the  control  of  the  master  was  not  so  absolute,  but 
the  purchase  of  a  slave  involved  the  outlay  of  a  considerable  sum  of  money.  Free 
laborers  were  more  common  in  New  England,  indented  servants  in  the  middle 
colonies  and  Maryland,  and  slaves  in  the  South.  Kalm  gives  a  careful  account  of 
these  three  classes  of  labor. 

The  servants  which  are  made  use  of  in  the  English  Americai 
colonies  are  either  free  persons,  or  slaves,  and  the  former  are  agah 
of  two  different  sorts. 

First,  Those  who  are  quite  free  serve  by  the  year;  they  are  not 
only  allowed  to  leave  their  service  at  the  expiration  of  their  year, 
but  may  leave  it  at  any  time  when  they  do  not  agree  with  their 
masters.  However,  in  that  case  they  are  in  danger  of  losing  their 

1  Travels  into  North  America.  By  Peter  Kahn  (London,  1770).  In  Pinkerton, 
Voyages  and  Travels,  XIII,  499-502. 


LABOR,  EXCHANGE  AND   POPULATION  85 

wages,  which  are  very  considerable.  A  man-servant  who  has  some 
abilities,  gets  between  sixteen  and  twenty  pounds  in  Pennsylvania 
currency,  but  those  hi  the  country  do  not  get  so  much.  A  servant- 
maid  gets  eight  or  ten  pounds  a  year:  these  servants  have  their  food 
besides  their  wages,  but  must  buy  their  own  clothes,  and  what  they 
get  of  these,  they  must  thank  their  master's  goodness  for. 

Second,  The  second  kind  of  free  servants  consist  of  such  persons 
as  annually  come  from  Germany,  England,  and  other  countries,  in 
order  to  settle  here.  These  new  comers  are  very  numerous  every 
year:  there  are  old  and  young  ones,  and  of  both  sexes;  some  of 
them  have  fled  from  oppression,  under  which  they  supposed  themselves 
to  have  laboured.  Others  have  been  driven  from  their  country  by 
persecution  on  account  of  religion;  but  most  of  them  are  poor,  and 
have  not  money  enough  to  pay  their  passage,  which  is  between  six 
and  eight  pounds  sterling  for  each  person;  therefore  they  agree 
with  the  captain  that  they  will  suffer  themselves  to  be  sold  for  a  few 
years,  on  their  arrival.  In  that  case  the  person  who  buys  them, 
pays  the  freight  for  them;  but  frequently  very  old  people  come  over, 
who  cannot  pay  their  passage,  they  therefore  sell  their  children, 
so  that  they  serve  both  for  themselves  and  for  their  parents:  there 
are  likewise  some  who  pay  part  of  their  passage,  and  they  are  sold 
only  for  a  short  time.  From  these  circumstances,  it  appears,  that 
the  price  of  the  poor  foreigners  who  come  over  to  North  America 
is  not  equal,  and  that  some  of  them  serve  longer  than  others:  when 
their  time  is  expired,  they  get  a  new  suit  of  clothes  from  their  master, 
and  some  other  things:  he  is  likewise  obliged  to  feed  and  clothe  them 
during  the  years  of  their  servitude.  Many  of  the  Germans  who 
come  hither,  bring  money  enough  with  them  to  pay  their  passage, 
but  rather  suffer  themselves  to  be  sold,  with  a  view,  that  during 
their  servitude  they  may  get  some  knowledge  of  the  language  and 
quality  of  the  country,  and  the  like,  that  they  may  the  better  be  able 
to  consider  what  they  shall  do  when  they  have  got  their  liberty. 
Such  servants  are  taken  preferable  to  all  others,  because  they  are 
not  so  dear;  for  to  buy  a  negroe  or  black  slave  requires  too  much 
money  at  once;  and  men  or  maids  who  get  yearly  wages,  are  likewise 
too  dear;  but  this  kind  of  servants  may  be  got  for  half  the  money, 
and  even  for  less;  for  they  commonly  pay  fourteen  pounds,  Pen- 
sylvania  currency,  for  a  person  who  is  to  serve  four  years,  and  so 
on  in  proportion.  Their  wages  therefore  are  not  above  three 
pounds  Pensylvania  currency,  per  annum.  This  kind  of  servants, 
the  English  call  servings.  When  a  person  has  bought  such  a  servant 


86  READINGS  IN  ECONOMIC  HISTORY 

for  a  certain  number  of  years,  and  has  an  intention  to  sell  him  again, 
he  is  at  liberty  to  do  so;  but  he  is  obliged,  at  the  expiration  of  the 
term  of  servitude,  to  provide  the  usual  suit  of  cloaths  for  the  servant, 
unless  he  has  made  that  part  of  the  bargain  with  the  purchaser.  The 
English  and  Irish  commonly  sell  themselves  for  four  years,  but  the 
Germans  frequently  agree  with  the  captain  before  they  set  out,  to 
pay  him  a  certain  sum  of  money,  for  a  certain  number  of  persons;  as 
soon  as  they  arrive  in  America,  they  go  about  and  try  to  get  a  man 
who  will  pay  the  passage  for  them:  in  return  they  give  according  to 
the  circumstances,  one  or  several  of  their  children,  to  serve  a  certain 
number  of  years:  at  last  they  make  their  bargain  with  the  highest 
bidder. 

Third,  The  negroes  or  blacks  make  the  third  kind.  They  are 
in  a  manner  slaves;  for  when  a  negro  is  once  bought,  he  is  the  pur- 
chaser's servant  as  long  as  he  lives,  unless  he  gives  him  to  another, 
or  makes  him  free.  However,  it  is  not  in  the  power  of  the  master  to 
kill  his  negro  for  a  fault,  but  he  must  leave  it  to  the  magistrates  to 
proceed  according  to  the  laws.  Formerly  the  negroes  were  brought 
over  from  Africa,  and  bought  by  almost  every  one  who  could  afford 
it.  The  quakers  alone  scrupled  to  have  slaves;  but  they  are  no  longer 
so  nice,  and  they  have  as  many  negroes  as  other  people.  However, 
many  people  cannot  conquer  the  idea  of  its  being  contrary  to  the 
laws  of  Christianity  to  keep  slaves.  There  are  likewise  several 
free  negroes  in  town,  who  have  been  lucky  enough  to  get  a  very 
zealous  quaker  for  their  master,  who  gave  them  their  liberty,  after 
they  had  faithfully  served  him  for  some  time.  .  .  . 

At  present  they  seldom  bring  over  any  negroes  to  the  English 
colonies,  for  those  which  were  formerly  brought  thither,  have  multi- 
plied considerably.  .  .  . 

The  negroes  were  formerly  brought  from  Africa,  as  I  mentioned 
before;  but  now  this  seldom  happens,  for  they  are  bought  in  the 
West  Indies,  or  American  Islands,  whither  they  were  originally 
brought  from  their  own  country:  for  it  has  been  found  that  on  trans- 
porting the  negroes  from  Africa,  immediately  into  these  northern 
countries,  they  have  not  such  a  good  state  of  health,  as  when  they 
gradually  change  places,  and  are  first  carried  from  Africa  to  the 
West  Indies,  and  from  thence  to  North  America.  It  has  frequently 
been  found,  that  the  negroes  cannot  stand  the  cold  here  so  well  as  the 
Europeans  or  whites;  for  whilst  the  latter  are  not  in  the  least  affected 
by  the  cold,  the  toes  and  fingers  of  the  former  are  frequently  frozen. 
There  is  likewise  a  material  difference  among  them  in  this  point; 


LABOR,   EXCHANGE  AND  POPULATION  87 

for  those  who  come  immediately  from  Africa,  cannot  bear  the  cold 
so  well  as  those  who  are  either  born  in  this  country,  or  have  been  here 
for  a  considerable  time;  for  the  frost  easily  hurts  the  hands  and  feet 
of  the  negroes  which  come  from  Africa,  or  occasions  violent  pains 
in  their  whole  body,  or  in  some  parts  of  it,  though  it  does  not  at  all 
affect  those  who  have  been  here  for  some  time.  .  .  . 

The  price  of  negroes  differs  according  to  their  age,  health,  and 
abilities.  A  full-grown  negro  costs  from  forty  pounds  and  upwards 
to  a  hundred,  of  Pensylvania  currency.  A  negro  boy  or  girl  of  two  or 
three  years  old,  can  hardly  be  got  for  less  than  eight  or  fourteen  pounds 
in  Pensylvania  currency.  Not  only  the  quakers,  but  likewise  several 
Christians  of  other  denominations,  sometimes  set  their  negroes  at 
liberty. 

B.   Work  of  a  Servant  in  Virginia,  1656  1 

The  work  of  an  indented  servant  was  carefully  regulated  by  the  terms  of  the 
contract  or  indenture  that  was  entered  into  between  the  servant  and  the  master  who 
paid  his  passage  money.  The  following  advice  to  intending  emigrants  who  expected 
to  use  this  method  of  reaching  America  shows  the  usual  terms  of  such  a  contract. 

Let  such  as  are  so  minded  not  rashly  throw  themselves  upon  the 
voyage,  but  observe  the  nature,  and  enquire  the  qualities  of  the 
persons  with  whom  they  ingage  to  transport  themselves,  or  if  (as 
not  acquainted  with  such  as  inhabit  there,  but  go  with  Merchants 
and  Mariners,  who  transport  them  to  others,)  let  their  covenant 
be  such,  that  after  their  arrival  they  have  a  fort-nights  time  assigned 
them  to  enquire  of  their  Master,  and  make  choyce  of  such  as  they 
intend  to  expire  their  tune  with,  nor  let  that  brand  of  selling  of  serv- 
ants, be  any  discouragement  to  deter  any  from  going,  for  if  a  time 
must  be  served,  it  is  all  one  with  whom  it  be  served,  provided  they  be 
people  of  honest  repute,  with  which  the  Country  is  well  replenished. 
And  be  sure  to  have  your  contract  in  writing  and  under  hand  and 
seal,  for  if  ye  go  over  upon  promise  made  to  do  this  or  that,  or  to  be 
free  or  your  own  men,  it  signifies  nothing,  for  by  a  law  of  the  Country 
(waiving  all  promises)  any  one  coming  in  and  not  paying  their  own 
passages,  must  serve  if  men  or  women  four  years,  if  younger  according 
to  their  years,  but  where  an  Indenture  is,  that  is  binding  and 
observing. 

The  usual  allowance  for  servants  is  (besides  their  charge  of  passage 

1  Leah  and  Rachel:  or,  the  Two  Fruitfull  Sisters  Virginia  and  Mary-land.  By 
John  Hammond  (London,  1656).  In  Force,  Tracts  and  Other  Papers  (Washing- 
ton, 1844),  III,  no.  xiv,  n,  14. 


88  READINGS  IN  ECONOMIC  HISTORY 

defrayed)  at  their  expiration,  a  years  provision  of  corne,  dubble  appar- 
rell,  tooles  necessary,  and  land  according  to  the  custome  of  the 
Country,  which  is  an  old  delusion,  for  there  is  no  land  accustomary 
due  to  the  servant,  but  to  the  Master,  and  therefore  that  servant 
is  unwise  that  will  not  dash  out  that  custom  in  his  covenant,  and  make 
that  due  of  land  absolutely  his  own,  which  although  at  the  present, 
not  of  so  great  consequence;  yet  in  a  few  years  will  be  of  much  worth, 
as  I  shall  hereafter  make  manifest.  .  .  . 

Those  Servants  that  will  be  industrious  may  in  their  time  of 
service  gain  a  competent  estate  before  their  Freedomes,  which  is 
usually  done  by  many,  and  they  gaine  esteeme  and  assistance  that 
appear  so  industrious:  There  is  no  Master  almost  but  will  allow 
his  Servant  a  parcell  of  clear  ground  to  plant  some  Tobacco  in  for 
himself,  which  he  may  husband  at  those  many  idle  times  he  hath 
allowed  him  and  not  prejudice,  but  rejoyce  his  Master  to  see  it,  which 
in  time  of  Shipping  he  may  lay  out  for  commodities,  and  in  Summer 
sell  them  again  with  advantage,  and  get  a  Sow-pig  or  two,  which 
any  body  almost  will  give  him,  and  his  Master  suffer  him  to  keep 
them  with  his  own,  which  will  be  no  charge  to  his  Master,  and  with 
one  years  increase  of  them  may  purchase  a  Cow  Calf  or  two,  and  by 
that  time  he  is  for  himself;  he  may  have  Cattle,  Hogs  and  Tobacco 
of  his  own,  and  come  to  live  gallantly;  but  this  must  be  gained  (as 
I  said)  by  Industry  and  affability,  not  by  sloth  nor  churlish  behaviour. 

C.  Servants  in  Pennsylvania,  1775  1 

The  largest  number  of  indented  servants  in  any  of  the  colonies  was  to  be  found 
in  Pennsylvania,  where  slavery  was  opposed  by  the  Quakers.  While  the  term  of 
service  seems  long  as  compared  with  the  cost  to  the  master,  it  was  probably  in  many 
cases  the  only  system  by  which  the  settlers  could  reach  America. 

Pensylvania  is  not  without  negroe  slaves  for  cultivation,  though 
the  number  bears  no  proportion  to  the  white  servants;  it  may  also 
be  proper  to  remark,  that  there  are  in  this  province,  and  it  is  the 
same  in  others,  a  difference  in  the  white  servants;  they  have,  through- 
out the  province,  the  same  sort  of  servants  that  perform  work  in 
England,  that  is,  hired  by  the  year,  in  which  case,  they  are  washed, 
lodged,  and  boarded,  but  find  their  own  cloaths;  an  able  bodied  man 
in  husbandry,  will  get  from  lol.  to  i61.  a  year  sterling.  Maids  will 
get  so  high  as  5!.  to  7!.  Another  sort  of  white  servants,  which  are  un- 
known in  Britain,  are  the  new  settlers  that  are  poor.  Very  many  of 

1  American  Husbandry.     By  an  American  (London,  1775),  I,  169-70. 


LABOR,   EXCHANGE  AND   POPULATION  89 

these  cannot  even  pay  their  passage  from  Europe,  which  amounts 
to  id.  sterling,  and  agree  therefore  with  the  captain  of  the  ship,  that 
he  shall  sell  them  for  a  certain  number  of  years  to  be  servants,  in 
which  case  the  farmers  buy  them,  that  is,  pay  their  freight,  &c.  and 
this  usually  puts  something  also  in  the  captain's  pocket,  beyond  what 
he  would  otherwise  have.  If  the  passenger  has  some  money,  but 
not  enough,  he  is  then  sold  for  a  shorter  time  to  make  up  the  sum. 
There  are  laws  in  the  province  to  regulate  this  kind  of  servitude,  which 
seems  very  strange  to  us;  the  master  is  bound  to  feed,  clothe,  and  use 
the  servant  as  well  as  others.  Others  that  have  money  enough  to 
pay  for  their  passage,  especially  Germans,  yet  will  not  pay,  but  choose 
to  be  sold  hi  order  to  have  time  to  gain  a  knowledge  of  the  language 
and  the  manner  of  living  in  the  country.  Both  these  sorts  of  serv- 
ants are  greatly  preferred  to  the  common  hiring  methods;  for  the 
wages  do  not  amount  to  much  more  than  half  the  other,  and  at  the 
same  time  there  is  a  security  of  keeping  them,  which  with  common 
servants  is  not  the  case;  nor  are  these  near  so  industrious.  These 
distinctions  in  servitude  are  met  with  in  our  other  colonies,  but  they 
do  not  occur  so  often,  because  for  one  new  comer  in  them,  there 
are  twenty  at  Philadelphia. 

III.   SLAVE  LABOR 

A.    The  Slave  Trade  to  Virginia,  1708  1 

Slaves  were  first  introduced  into  America  in  very  large  numbers  from  the  West 
Indies,  where  they  were  "seasoned"  before  being  brought  to  the  colder  climate  of 
the  more  northerly  regions.  After  the  monopoly  of  the  Royal  African  Company 
was  broken  the  larger  part  of  the  trade  passed  into  the  hands  of  other  traders,  among 
whom  were  not  a  few  New  Englanders.  Colonel  Jenings  was  President  of  the 
Council  of  Virginia. 

VIRGINIA  November  ye  2yth  1708 
May  it  please  yor  Lordsps, 

It  was  the  nth  of  last  moneth  and  the  Fleet  then  sailed,  before  I 
had  the  honor  to  receive  yor  Lordships  of  the  1 5th  of  April  concerning 
the  Negro  Trade  Since  which  I  have  endeavoured  by  the  means  of 
the  proper  officers,  and  the  informations  of  the  ancient  Inhabitants, 
to  answer  Yor  Lordps  Commands,  and  in  Order  thereto  have  herewith 
sent  yor  Lordships  an  account  of  all  the  Negros  imported  into  this 
Colony  from  the  24th  of  June  1699  to  the  12th  of  October  last  past 

1  Letter  from  E.  Jenings  to  the  Lords  of  Trade.  In  Colonial  Records  of  North 
Carolina,  I,  693-4. 


9o  READINGS  IN  ECONOMIC  HISTORY 

distinguishing  those  imported  by  the  Royal  African  Company  (679), 
and  those  by  separate  Traders  (5928),  wherein  yor  Lordships  will 
perceive  the  latter  have  had  much  the  greater  Share.  As  to  the  par- 
ticular Rates  at  which  those  Negros  have  been  sold,  they  have  been 
variable  according  to  the  different  times  of  their  corning  in  and  the 
quality  &  ages  of  the  Slaves,  but  the  medium  for  men  &  women  may 
be  reckoned  from  20  to  30  pounds  a  head  for  those  sold  by  the  Com- 
pany &  from  20  to  35£  a  head  for  the  like  kinds  sold  by  the  separate 
Traders,  who  in  gen1  have  sold  theirs  at  a  higher  rate  than  the 
Company. 

How  the  Country  was  supplyed  with  Negros  before  the  Trade 
to  Africa  was  laid  open  in  the  year  1698.  I  have  endeavoured  to 
Inform  my  Self  from  some  ancient  Inhabitants  conversant  in  that 
Trade  as  well  as  by  recollecting  what  hath  happened  in  my  own 
knowledge,  &  find  that  before  the  year  1680  what  negros  were  brought 
to  Virginia  were  imported  generally  from  Barbados  for  it  was  very 
rare  to  have  a  Negro  ship  come  to  this  Country  directly  from  Africa 
since  that  time,  and  before  the  year  1698.  the  Trade  of  Negros  became 
more  frequent,  tho  not  in  any  proportion  to  what  it  hath  been  of  late, 
during  which  the  Affrican  Company  sent  several  Ships  and  others 
by  their  Licence  (as  I  have  been  informed)  having  bought  their  Slaves 
of  the  Company  brought  them  in  hither  for  Sale,  Among  which  I  re- 
member the  late  Alderman  Jeffrys  &  Sr  Jeffry  Jeffrys  were  princi- 
pally concerned,  but  all  this  time  the  price  of  the  Negroes  was  currant 
from  £18  to  25  per  head  for  men  and  women  &  never  exceeded  that 
Rate.  Whether  the  opening  the  Trade  to  Africa  having  created  an 
Emulation  between  the  Company  and  the  Seperate  Traders  which 
should  outbid  the  other  in  the  purchase  of  their  Slaves  there,  or 
whether  the  dexterity  of  their  Factors  there  in  taking  advantage 
of  the  prevailing  humour  of  our  Inhabitants  for  some  years  past  of 
buying  Negros  even  beyond  their  abilities,  or  the  Concurrence  of 
both,  hath  raised  the  Rates  of  Negros  so  extravagantly,  I  shall  not 
pretend  to  determine  but  this  I  may  venture  to  say  that  it  will  be  much 
harder  to  lower  the  price  again  now  tis  raised  unless  there  be  the 
same  Freedom  of  Trade  continued  as  formerly  for  tho  the  Inhabitants 
of  this  Country  in  genu  will  not  be  so  fond  of  purchasing  Negros  as 
of  late  being  sensibly  convinced  of  their  Error  which  has  in  a  manner 
ruined  the  Credit  of  the  Country  yet  there  will  still  be  some  that 
must,  &  others  that  will  at  any  rate  Venture  to  buy  them,  &  if  the 
Company  alone  have  the  management  of  the  Trade,  they'l  find  pre- 
tences enough  to  keep  up  the  price  if  not  to  impose  what  higher 


LABOR,  EXCHANGE  AND   POPULATION  91 

rate  they  please,  which  the  buyer  must  submit  to,  knowing  he  cannot 
be  supplyed  by  any  other  hand.  As  for  vessells  trading  directly  from 
this  place  to  the  Coast  of  Africa  I  never  knew  of  any  nor  is  the  same 
practicable  this  Country  not  being  provided  with  Commoditys  suit- 
able for  carrying  on  such  a  Trade.  This  is  the  best  account  I  am  able 
to  give  in  Answer  to  yor  Lordships  Commands,  wherein  if  I  have 
failed  or  mistaken  in  any  point  I  beg  yor  Lordships  favourable  Con- 
struction thereof  Since  I  can  with  truth  assure  your  Lordships  that  no 
man  hath  a  greater  desire  to  serve  yor  Lordships  than 
My  Lords 

Your  Lordships 

most  obedient  servant 

E.  JENINGS 

B.   Request  of  a  Missionary  for  Slaves,  1716  l 

Perhaps  no  more  striking  illustration  could  be  given  of  the  toleration  with  which 
slavery  was  regarded  in  the  southern  colonies,  and  of  the  great  scarcity  of  hired 
labor,  than  this  request  of  a  minister  of  the  gospel  for  three  or  four  slaves.  John 
Urmstone  labored  for  many  years  as  a  missionary  in  the  straggling  settlements  of  the 
Carolinas  and  was  described  by  a  neighbor  as  a  devout  man. 

NORTH  CAROLINA,  Dec1  15th,  1716 
Sir. 

....  I  pray  you  therefore  desire  the  Treasurer  to  the  Society 
to  pay  to  Joseph  Jekyll  Esqr  His  Majesty's  Collector  of  Customs 
at  Boston  in  New  England,  or  his  order  20  pounds  sterling  (bills  of 
equal  date  being  produced)  and  if  his  correspondent  the  Bearer  hereof 
will  undertake  it  pay  likewise  40  pounds  of  like  money  to  be  invested 
in  goods  to  buy  me  3  or  4  Negroes  in  Guinea;  but  if  he  refuse  I  beg 
some  body  may  be  employed  to  engage  some  Guinea  Captn  or  Mer- 
chant to  be  delivered  to  the  aforesaid  Joa  .  .  .  Jekyll  or  to  me  3 
Negroes  men  of  middle  stature  about  20  years  old  and  a  Girl  of  about 
1 6  years,  here  is  no  living  without  servants  there  are  none  to  be  hired 
of  any  colour  and  none  of  the  black  kind  to  be  sold  good  for  anything 
under  50  or  6o£  white  servants  are  seldom  worth  keeping  and  never 
stay  out  the  time  indented  for.  I  likewise  desire  a  Bill  of  Exchange 
for  £20  sterling  payable  to  me  or  order  at  Barbadoes.  I  believe  I 
have  more  due  for  according  to  my  account:  on  the  25th  Instant 
there  will  be  an  hundred  pounds  coming  to  me.  I  shall  be  glad  to 

1  The  Colonial  Records  of  North  Carolina.  Edited  by  W.  L.  Saunders  (Raleigh, 
1886),  II,  260-1. 


92  READINGS  IN  ECONOMIC  HISTORY 

hear  my  requests  are  complied  with  and  till  then  must  struggle  with 

a  hard  Winter,  scarcity  of  Provisions,  and  rub  through  many  more 

difficulties  with  all  the  patience  I  am  endued  with  and  ever  be,  Sir, 

Your  most  humble  Serv* 

Jon  URMSTONE 

Missionary 

C.   Objections  to  the  Prohibition  of  Rum  and  Slaves  in  Georgia,  1738  1 

Georgia  was  founded  in  1733  under  the  leadership  of  General  J.  E.  Oglethorpe 
as  an  asylum  for  "all  the  useless  Poor  in  England,  and  distressed  Protestants  in 
Europe."  A  charter  was  granted  containing  various  restrictio/is  and  conditions  and 
the  control  of  the  colony  was  placed  in  the  hands  of  a  board  of  trustees.  Among 
the  clauses  governing  the  colony  were  two  which  prohibited  the  importation  of  rum 
and  of  slaves.  These  soon  became  a  bone  of  contention  between  the  colonists  and 
the  trustees.  A  petition  was  drawn  up  by  the  settlers  and  sent  to  the  trustees  in 
London,  asking  that  these  restrictions  be  removed. 

THE  First  of  February,  1732-3,  Mr.  Oglethorpe  arrived  at  Georgia 
with  the  first  Embarkation,  consisting  of  Forty  Families,  making  up- 
wards of  One  Hundred  Persons,  all  brought  over  and  supported  at 
the  Publick  Charge.  The  First  Thing  he  did  after  he  arrived  in 
Georgia,  was  to  make  a  kind  of  solemn  Treaty  with  a  Parcel  of  fugitive 
Indians,  .  .  .  and  all  of  them  have  been  ever  since  maintain'd  at 
the  Publick  Charge,  at  vast  Expence,  when  many  poor  Christians 
were  starving  in  the  Colony  for  Want  of  Bread;  .  . 

SECONDLY,  He  prohibited  the  Importation  of  Rum,  under  Pre- 
tence, that  it  was  destructive  to  the  Constitution,  and  an  Incentive 
to  Debauchery  and  Idleness:  However  specious  these  Pretences 
might  seem,  a  little  Experience  soon  convinced  us,  that  this  Restric- 
tion was  directly  opposite  to  the  Well-being  of  the  Colony:  .  .  . 

THE  THIRD  Thing  he  did,  was  regularly  to  set  out  to  each  Free- 
holder in  Savannah,  Lots  of  Fifty  Acres,  in  three  distinct  Divisions, 
viz.  The  Eighth  Part  of  One  Acre  for  a  House  and  Garden  in  the  Town: 
Four  Acres  and  seven-eighths,  at  a  small  Distance  from  Town;  and 
Forty  five  Acres  at  a  considerable  Remove  from  thence.  No  regard 
was  had  to  the  Quality  of  the  Ground  in  the  Divisions,  so  that  some 
were  altogether  Pine  Barren,  and  some  Swamp  and  Morass,  far 
surpassing  the  Strength  and  Ability  of  the  Planter:  .  .  .  But  these 

1  A  True  and  Historical  Narrative  of  the  Colony  of  Georgia,  in  America.  By 
Pat.  Tailfer  el  al.  (Charles  Town,  1741).  In  Force,  Tracts  and  Other  Papers 
(Washington,  1835),  I,  no.  iv,  20-3. 


LABOR,  EXCHANGE  AND   POPULATION  93 

and  many  other  Hardships  were  scarcely  felt  by  the  few  People  that 
came  there,  so  long  as  Mr.  Oglethorpc  staid,  which  was  about  Fifteen 
Months:  They  work'd  hard  indeed,  in  Building  some  Houses  in 
Town;  but  then  they  labour 'd  in  common,  and  were  likewise  assisted 
by  Negroes  from  Carolina,  who  did  the  heaviest  Work:  But  at l  Mr. 
Oglethorpe's  going  to  England,  the  growing  fame  of  the  Colony  was 
thereby  greatly  increased,  so  that  as  it  has  been  before  observ'd, 
People,  in  Abundance,  from  all  Parts  of  the  World,  flock'd  to  Georgia. 
Then  they  began  to  consider  and  endeavour,  every  one  according  to 
his  Genius  or  Abilities,  how  they  might  best  subsist  themselves. 
Some,  with  great  Labour  and  Expence,  essayed  the  Making  of  Tar:2 
This,  as  'tis  well  known  to  the  Trustees,  never  quitted  Costs:  Others 
tried  to  make  planck  and  saw  Boards;  which,  by  the  great  Price  they 
were  obliged  to  sell  them  at,  by  Reason  of  the  great  Expence  of 
white  Servants,  was  the  chief  Means  of  ruining  those  who  thought 
to  procure  a  Living  by  their  Buildings  in  Town;  for  Boards  of  all 
kinds,  could  always  be,  bought  in  Carolina,  for  half  the  Price  that  they 
were  able  to  sell  them  at;  but  few  were  capable  to  Commission  them 
from  thence,  and  those  who  were  so,  were  prevented  from  doing  it, 
upon  Pretence  of  discouraging  the  Labour  of  white  People  in  Georgia. 
Those  who  had  Numbers  of  Servants  and  Tracts  of  Land  in  the  County, 
went  upon  the  Planting  of  Corn,  Pease,  Potatoes,  &c.  and  the  Charge 
of  these  who  succeeded  the  best,  so  far  exceeded  the  Value  of  the 
Produce,  that  it  would  have  saved  three  fourths  to  have  bought  all 
from  the  Carolina  Market.  The  Falling  of  Timber  was  a  Task  very  un- 
equal to  the  Strength  and  Constitution  of  white  Servants;  and  the 
Hoeing  the  Ground,  they  being  exposed  to  the  sultry  Heat  of  the  Sun, 
insupportable;  and  it  is  well  known,  that  this  Labour  is  one  of  the  hard- 
est upon  the  Negroes,  even  tho'  their  Constitutions  are  much  stronger 
than  white  People,  and  the  Heat  no  Way  disagreeable  nor  hurtful 
to  them;  but  in  us  it  created  inflamatory  Fevers  of  various  kinds, 
both  continued  and  intermittent;  wasting  and  tormenting  Fluxes,  most 
excruciating  Cholicks,  and  Dry-Belly- Achs;  Tremors,  Vertigoes,  Palsies, 
and  a  long  Train  of  painful  and  lingring  nervous  Distempers;  which 
brought  on  to  many  a  Cessation  both  from  Work  and  Life;  especially 

1  Before  he  departed,  a  Vessel  with  about  twenty  Families  of  Jews  arrived 
all  of  whom  had  Lots  assigned  them;  and  likewise  a  Vessel  with  forty  trans- 
ported Irish  Convicts,  whom  he  purchased,  altho'  they  had  been  before  refused 
at  Jamaica,   and  who  afterwards  occasioned  continual  Disturbances  in  the 
Colony. 

2  Mr.  Causton,  the  Trustees  Store  keeper,  mostly  at  their  Charge,  made  a 
Tarr  Kiln,  which  turned  out  to  no  Advantage. 


94  READINGS  IN  ECONOMIC  HISTORY 

as  Water  without  any  Qualification  was  the  chief  Drink,  and  Salt 
Meat  the  only  Provisions  that  could  be  had  or  afforded;  And  so  gen- 
eral were  these  Disorders,  that  during  the  hot  Season,  which  lasts 
from  March  to  October,  hardly  one  Half  of  the  Servants  and  working 
People,  were  ever  able  to  do  their  Masters  or  themselves  the  least 
Service;  and  the  Yearly  Sickness  of  each  Servant,  generally  speaking, 
cost  his  Master  as  much  as  would  have  maintained  a  Negro  for  four 
Years.  These  Things  were  represented  to  the  Trustees  in  the  Summer 
of  1735,  in  a  Petition  for  the  Use  of  Negroes,  signed  by  about  Seven- 
teen of  the  better  Sort  of  People  hi  Savannah;  In  this  Petition  there 
was  also  set  forth  the  great  Disproportion  betwixt  the  Maintenance 
'and  Cloathing  of  white  Servants  and  Negroes.  This  Petition  was  car- 
ried to  England  and  presented  to  the  Trustees,  by  Mr.  Hugh  Stirling, 
an  experienced  Planter  in  the  Colony;  but  no  Regard  was  had  to  it, 
or  to  what  he  could  say,  and  great  Resentment  was  even  shewn  to 
Mr.  Thompson,  the  Master  of  the  Vessel  in  which  it  went. 

D.   Answer  of  the  Trustees,  1739  l 

The  trustees  refused  to  accede  to  the  petition  of  some  of  the  landholders  of 
Georgia  to  permit  the  introduction  of  rum  and  slaves  and  to  alter  the  tenure  of  the 
lands.  Some  years  later,  however,  the  influence  of  the  Carolinas  proved  irresistible 
and  both  these  restrictions  were  broken  down. 

To  the  Magistrates  of  the  Town  of  Savannah,  in  the  Province  of  Georgia. 

The  Trustees  for  establishing  the  Colony  of  Georgia  in  America, 
have  received  by  the  Hands  of  Mr.  Benjamin  Ball  of  London,  Merchant, 
an  attested  Copy  of  a  Representation,  signed  by  You  the  Magis- 
trates, and  many  of  the  Inhabitants  of  Savannah,  on  the  gth  of  Decem- 
ber last,  for  altering  the  Tenure  of  the  Lands,  and  introducing  Negroes 
into  the  Province,  transmitted  from  thence  by  Mr.  Robert  Williams. 

The  Trustees  are  not  surprized  to  find  unwary  People  drawn 
in  by  crafty  Men,  to  join  in  a  Design  of  extorting  by  Clamour  from 
the  Trustees  an  Alteration  in  the  Fundamental  Laws,  framed  for  the 
Preservation  of  the  People,  from  those  very  Designs.  .  .  . 

And  the  Trustees  are  the  more  confirmed  in  their  opinion  of  the 
Unreasonableness  of  this  Demand,  that  they  have  received  Petitions 
from  the  Darien,  and  other  Parts  of  the  Province,  representing  the 
Inconvenience  and  Danger,  which  must  arise  to  the  good  People  of 

1  A  True  and  Historical  Narrative  of  the  Colony  of  Georgia,  in  America.  By  Pat. 
Tailfer  et  al.  (Charles  Town,  1741).  In  Force,  Tracts  and  Other  Papers  (Wash- 
ington, 1835),  I,  no.  iv,  51-3. 


LABOR,  EXCHANGE  AND   POPULATION  95 

the  Province  from  the  Introduction  of  Negroes.  And  as  the  Trus- 
tees themselves  are  fully  convinced,  that  besides  the  Hazard  attend- 
ing that  Introduction,  it  would  destroy  all  Industry  among  the  white 
Inhabitants;  and  that  by  giving  them  a  Power  to  alien  their  Lands,  the 
Colony  would  soon  be  too  like  its  Neighbours,  void  of  white  Inhab- 
itants, filled  with  Blacks,  and  reduced  to  be  the  precarious  Property 
of  a  Few,  equally  exposed  to  Domestick  Treachery,  and  Foreign  In- 
vasion; and  therefore  the  Trustees  cannot  be  supposed  to  be  in  any 
Disposition  of  granting  this  Request;  and  if  they  have  not  before 
this  signified  their  Dislike  of  it,  this  Delay  is  to  be  imputed  to  no 
other  Motives,  but  the  Hopes  they  had  conceived,  that  Time  and 
Experience  would  bring  the  Complainants  to  a  better  Mind:  And 
the  Trustees  readily  join  Issue  with  them  in  their  Appeal  to  Pos- 
terity, who  shall  judge  between  them,  who  were  their  best  Friends; 
Those,  who  endeavoured  to  preserve  for  them  a  Property  in  their 
Lands,  by  tying  up  the  Hands  of  their  unthrifty  Progenitors;  or 
They,  who  wanted  a  Power  to  mortgage  or  alien  them:  Who  were 
the  best  Friends  to  the  Colony,  Those  who  with  great  Labour  and 
Cost  had  endeavoured  to  form  a  Colony  of  His  Majesty's  Subjects, 
and  persecuted  Protestants  from  other  Parts  of  Europe,  had  placed 
them  on  a  fruitful  Soil,  and  strove  to  secure  them  in  their  Possessions, 
by  those  Arts  which  naturally  tend  to  keep  the  Colony  full  of  useful 
and  industrious  People,  capable  both  to  cultivate  and  defend  it;  or 
Those,  who,  to  gratify  the  greedy  and  ambitious  Views  of  a  few 
Negroe  Merchants,  would  put  it  into  their  Power  to  become  sole 
Owners  of  the  Province,  by  introducing  their  baneful  Commodity; 
which,  it  is  well  known  by  sad  Experience,  has  brought  our  Neighbour 
Colonies  to  the  Brink  of  Ruin,  by  driving  out  their  white  Inhab- 
itants, who  were  their  Glory  and  Strength,  to  make  room  for  Black, 
who  are  now  become  the  Terror  of  their  unadvised  Masters. 

Signed  by  Order  of  the  Trustees, 
this  2oth  Day  of  June,  1739. 

Benj.  Martyn,  Secretary. 

E.    Unprofitableness  of  Slavery,  1774  * 

By  1774  the  tobacco  lands  of  Virginia  had  been  pretty  well  exhausted  as  a  result 
of  wasteful  methods  of  cultivation,  and  the  combination  of  slavery  and  worn-out 
lands  was  clearly  unprofitable.  This  conclusion  was  reached  by  the  tutor  in  the 
family  of  a  rich  Virginia  planter. 

1  Journal  and  Letters,  1767-1774.  By  Philip  V.  Fithian.  Edited  by  J.  R. 
Williams  (Princeton,  1900).  Also  in  American  Historical  Review,  V,  304,  307. 


96  READINGS  IN  ECONOMIC  HISTORY 

Mr.  Carter  now  possesses  60000  Acres  of  Land;  and  about  600 
Negroes.  But  his  Estate  is  much  divided,  and  lies  in  almost  every 
county  in  this  Colony;  He  has  Lands  in  the  Neighbourhood  of  Wil- 
liamsburg,  and  an  elegant  and  Spacious  House  in  that  City.  He 
owns  a  great  part  of  the  well-known  Iron- Works  near  Baltimore  in 
Maryland.  And  he  has  one  or  more  considerable  Farms  not  far 
from  Anapolis.  .  .  . 

Monday,  April  4.  After  Supper  I  had  a  long  conversation  with  Mrs. 
Carter  concerning  Negroes  in  Virginia,  and  find  that  She  esteems 
their  value  at  no  higher  rate  than  I  do.  We  both  concluded,  (I  am 
pretty  certain  that  the  conclusion  is  just)  that  if  in  Mr.  Carters,  or 
in  any  Gentlemans  Estate,  all  the  Negroes  should  be  sold,  and  the 
money  put  to  Interest  in  safe  hands,  and  let  the  Lands  which  these 
Negroes  now  work  lie  wholly  uncultivated,  the  bare  Interest  of  the 
Price  of  the  Negroes  would  be  a  much  greater  yearly  income  than 
what  is  now  received  from  their  working  the  Lands,  making  no 
allowance  at  all  for  the  trouble  and  Risk  of  the  Masters  as  to  the 
Crops  and  Negroes.  How  much  greater  then  must  be  the  value  of 
an  estate  here  if  these  poor  enslaved  Africans  were  all  in  their  native 
desired  Country,  and  in  their  Room  industrious  Tenants,  who  being 
born  in  freedom,  by  a  laudable  care,  would  not  only  inrich  their 
Landlords,  but  would  raise  a  hardy  Offspring  to  be  the  strength  and 
the  honour  of  the  Colony. 

EXCHANGE 
I.   COMMODITY  MONEY 

A.   Commodity  Money  in  North  Carolina,  1749 1 

Throughout  the  whole  of  the  colonial  period  there  were  continuous  complaints 
as  to  the  scarcity  of  money.  The  reasons  for  this  were  obvious:  the  colonists  were 
for  the  most  part  poor  people  who  did  not  bring  much  money  with  them;  and  what 
they  did  bring  was  speedily  sent  back  to  England  in  exchange  for  more  needed  sup- 
plies and  manufactured  commodities.  As  the  colonies  were  thus  drained  of  metallic 
money  resort  must  be  had  to  substitutes  therefor  to  carry  on  domestic  exchange, 
and  various  commodities  were  made  to  do  service  as  money,  often  being  given  the 
legal  tender  quality.  Such  a  list  as  that  authorized  in  North  Carolina  was  fairly 
typical  of  all  the  early  colonies. 

The  Province  of  North  Carolina  was  first  settled  by  People  from 
Virginia  in  low  circumstances  who  moved  hither  for  the  benefit  of 

1  Letter  of  Governor  Johnston  to  the  Board  of  Trade  (1749),  in  Colonial  Records  of 
North  Carolina.  Edited  by  W.  L.  Saunders  (Raleigh,  1886),  IV,  920-1. 


LABOR,  EXCHANGE  AND  POPULATION  97 

a  larger  and  better  range  for  their  Stocks,  from  such  a  small  Beginning 
it  was  a  great  many  years  before  it  appeared  there  was  any  Increase 
of  Inhabitants  sufficient  to  form  a  Government  the  whole  number 
of  Taxables  in  Thirty  years  time  not  amounting  to  one  thousand,  .  .  . 
The  poverty  of  the  first  inhabitants  made  (for  want  of  a  better 
currency)  to  Enact  in  their  Assemblies  that  all  Payments  whatsoever, 
might  be  made  in  sundry  Commodities  or  Products  of  the  Province 
a  List  whereof  here  follows,  agreeable  to  the  Law  as  it  past  upon  the 
Revise,  Anno:  1715. 

£        s.      d. 

Indian  Corn  per  bushel  . .         i        8 

Tallow  per  Pound  .  .        .  .         5 

Beaver  &  Otter  Skins  per  Pound  . .         2         6 

Butter  per  Pound  . .        . .         6 

Raw  buck  &  Doe  Skins  per  Pound  .  .        .  .         9 

Feathers  per  Pound  .  .         i         4 

Pitch  per  Barrel  full  gauged  i 

Pork  per  Barrel  2         5 

Tobacco  per  100  cwt  . .       10 

Wheat  per  Bushel  . .         3         6 

Leather  Tann'd  uncurried  per  pound  .  .        .  .         8 

Wild  Cat  Skins  per  piece  . .         i 

Cheese  per  Pound  . .        , .         4 

Brest  Buck  &  Doe  Skins  per  Pound  . .         2         6 

Tar  per  Barrel  full  gauged  .  .       10 

Whale  Oil  per  Barrel  i       10 

Beef  per  Barrel  i       10 

This  method  has  been  continued  down  to  this  time  with  very  little 
Alteration  to  the  great  Damage  of  the  Revenue  it  being  a  stated 
rule,  that  of  so  many  Commodities  the  worst  sort  were  only  paid. 
Altho'  many  attempts  have  been  made  to  remedy  the  Inconvenience 
attending  such  a  currency  it  has  always  proved  fruitless  (the  People 
being  generally  fond  of  a  Law  which  gave  them  such  Advantages). 

B.    Tobacco  Notes  in  Virginia,  1781 l 

In  addition  to  commodities,  various  forms  of  representative  money  were  used 
by  the  colonists  to  make  up  for  the  scarcity  of  coin.  Paper  money  based  upon 
tobacco,  upon  land,  upon  a  coin  reserve,  upon  general  commodities,  and  upon  the 
credit  of  the  government  were  tried  in  different  colonies,  but  no  one  of  them  stood 
the  test  of  time  better  than  the  tobacco  notes  of  Virginia.  These  were  first  intro- 
duced in  1730  and  were  the  subject  of  considerable  legislation  thereafter.  They 
were  still  in  general  use  in  1781,  at  which  date  they  are  described  by  Chastellux, 
a  French  officer  who  served  in  the  Revolution  and  traveled  quite  extensively. 

1  Travels  in  North- America,  in  the  Years  1780,  1781,  and  1782.  By  the  Marquis 
(Frangois  Jean)  de  Chastellux  (London,  1787),  131-3. 


98  READINGS  IN  ECONOMIC  HISTORY 

We  were  just  going  out  to  take  a  walk,  when  we  received  a  visit 
from  Mr.  Victor,  whom  I  had  seen  at  Williamsburgh;  .  .  .  [we]  put 
ourselves  under  the  guidance  of  Mr.  Victor,  who  first  took  us  to  the 
warehouses  or  magazines  of  tobacco.  These  warehouses,  of  which 
there  are  numbers  in  Virginia,  though,  unfortunately,  great  part  of 
them  has  been  burned  by  the  English,  are  under  the  direction  of 
public  authority.  There  are  inspectors  nominated  to  prove  the 
quality  of  the  tobacco  brought  by  the  planters,  and  if  found  good, 
they  give  a  receipt  for  the  quantity.  The  tobacco  may  then  be  con- 
sidered as  sold,  these  authentic  receipts  circulating  as  ready  money 
in  the  country.  For  example:  suppose  I  have  deposited  twenty 
hogsheads  of  tobacco  at  Petersburg,  I  may  go  fifty  leagues  thence 
to  Alexandria  or  Fredericksburg,  and  buy  horses,  cloths,  or  any 
other  article  with  these  receipts,  which  circulate  through  a  number 
of  hands  before  they  reach  the  merchant  who  purchases  the  tobacco 
for  exportation.  This  is  an  excellent  institution,  for  by  this  means 
tobacco  becomes  not  only  a  sort  of  bank-stock,  but  current  coin. 
You  often  hear  the  inhabitants  say,  "This  watch  cost  me  ten  hogs- 
heads of  tobacco ;  this  horse  fifteen  hogsheads ;  or,  I  have  been  offered 
twenty,  &c."  It  is  true  that  the  price  of  this  article,  which  seldom 
varies  in  peace,  is  subject  to  fluctuations  in  time  of  war;  but  then, 
he  who  receives  it  in  payment,  makes  a  free  bargain,  calculates  the 
risks  and  expectations,  and  runs  the  hazard;  in  short  we  may  look 
on  this  as  a  very  useful  establishment;  it  gives  to  commodities 
value  and  circulation,  as  soon  as  they  are  manufactured,  and,  in  some 
measure,  renders  the  planter  independent  of  the  merchant. 

II.   CREDIT  MONEY 

A.   A  Defence  of  Paper  Money  by  a  Colonial  Governor,  1724  l 

In  1690  Massachusetts,  in  order  to  pay  the  expenses  of  an  expedition  against 
Canada,  issued  what  was  probably  the  first  emission  of  government  paper  money 
in  the  British  Empire,  certainly  the  first  in  America.  The  notes  were  to  be  redeemed 
out  of  the  revenues  from  taxation,  and  were  limited  to  a  small  amount.  They 
proved  to  be  a  great  convenience  and  served  their  purpose  so  well  that  a  second  issue 
was  made  in  1709.  This  example  was  followed  in  time  by  all  the  colonies  except 
North  Carolina.  Many  bad  results  followed  —  over-issue,  depreciation,  postpone- 
ment of  redemption,  and  in  some  cases  repudiation.  The  British  government  early 
took  a  determined  stand  against  these  issues  and  instructed  the  colonial  governors 
to  veto  all  bills  authorizing  such  issues.  But  the  need  of  money  in  the  colonies  was 

1  Documents  relating  to  the  Colonial  History  of  New  York.  Edited  by  E.  B. 
O'Callaghan  (Albany,  1855),  V,  735-8,  passim. 


LABOR,  EXCHANGE  AND   POPULATION  99 

so  great  that  in  spite  of  its  defects  paper  money  was  justified  by  leading  men  like 
Franklin  and  defended  by  colonial  governors  like  Burnet  and  Pownall.  Burnet, 
the  author  of  this  letter,  was  governor  of  New  York. 

New  York  2ist  Nov  1724 
My  Lords. 

....  But  this  being  an  Act  for  making  Paper  Money,  tho' 
within  my  additional  Instruction  which  allows  of  such  Acts  when 
they  are  for  raising  or  levying  a  publick  Revenue. 

I  think  myself  obliged  to  offer  to  your  Lordships  Reasons  that 
are  in  my  poor  opinion  sufficient  to  justify  it  and  other  Acts  of  this 
Nature  with  the  same  precaution. 

I  am  very  sensible  of  the  disadvantage  I  lye  under  in  writing 
upon  this  argument,  and  the  misfortune  it  is  to  any  cause  to  have 
already  appeared  in  an  odious  light,  as  I  am  but  too  well  convinced 
is  the  case  of  paper  money  Acts  in  the  Plantations,  by  your  Lord- 
ships last  words  in  your  letter  of  the  i  yth  of  June  —  That  Bills  for 
encreasing  of  Paper  money  will  meet  with  no  encouragement  —  I  hope 
your  Lordships  will  not  think  it  presumption  in  me  even  after  this 
declaration  to  endeavor  to  give  you  a  more  favourable  opinion  of 
such  Acts  and  if  I  go  too  far  in  this,  it  is  owing  to  the  encouragement 
your  Lordships  have  given  me  by  receiving  what  I  have  offered  on 
all  occasions  in  so  kind  a  manner  and  admitting  the  best  constructions 
that  my  weak  Reasoning  will  bear. 

I  have  already  in  my  letter  of  the  12th  of  May  last  used  several 
Arguments  to  justify  the  Paper  Act  in  New  Jersey,  and  therein  I 
observed  how  well  the  Bills  of  New  York  keep  up  their  credit  and  the 
reasons  why  they  have  not  fall'n  in  value  as  those  of  Carolina  and 
New  England  and  that  under  a  good  regulation  these  Acts  are  both 
of  Service  to  the  Trade  of  the  Plantations  and  of  great  Britain,  for 
which  that  I  may  not  repeat  I  beg  leave  to  refer  to  my  said  letter  of 
the  12th  of  May  last  and  desire  your  Lordships  would  again  take 
into  your  consideration  when  you  are  to  determine  your  opinion  on 
this  present  Act.  .  .  . 

I  take  the  liberty  further  to  observe  to  your  Lordships  on  how  many 
occasions  the  Government  of  Great  Britain  has  found  it  impracticable 
to  raise  all  the  money  wanted  within  the  year  from  whence  all  the 
present  debts  of  the  nation  have  arisen:  The  same  necessity  lyes 
often  upon  the  Plantations  where  frequenty  a  sum  of  ready  money  is 
wanted,  which  it  would  be  an  intollerable  Tax  to  raise  at  once,  and 
therefore  they  are  forced  to  imitate  the  Parliament  at  home,  in 
anticipating  upon  remote  funds.  And  as  there  is  no  Bank  nor 


TOO  READINGS  IN  ECONOMIC  HISTORY 

East  India  company  nor  even  private  subscribers  capable  of  lending 
the  Province  the  money  they  want  at  least  without  demanding 
the  extravagant  Interest  of  8  Pr  Cent  which  is  the  common  Interest 
here,  but  would  ruin  the  Publick  to  pay  since  this  is  a  Case  [wherej 
there  is  no  possible  way  left  to  make  distant  funds  provide  ready 
money,  when  it  is  necessarily  wanted,  but  making  paper  Bills  to  be 
sunk  by  such  funds.  Without  this  Carolina  would  have  been  ruined 
by  their  Indian  War  Boston  could  not  now  support  theirs  nor  could 
any  of  the  Provinces  have  furnished  such  considerable  Sums  to  the 
Expeditions  against  Canada.  Nor  could  at  present  any  of  the  neces- 
sary repairs  of  this  Fort  be  provided  for,  nor  the  arrears  of  the 
Revenue  be  discharged,  which  is  done  by  this  Act  in  a  Tax  to  be  levied 
in  4  years  nor  indeed  any  publick  Service  readily  and  sufficiently 
effected. 

And  I  may  add  one  thing  more  that  this  manner  of  compulsive 
credit  does  in  fact  keep  up  its  value  here  and  that  it  occasions  much 
more  Trade  and  business  than  would  be  without  it  and  that  more 
Specie  is  exported  to  England  by  reason  of  these  Paper  Bills  than 
could  be  if  there  was  no  circulation  but  of  Specie  for  which  reason 
all  the  merchants  here  seem  now  well  satisfied  with  it. 

I  hope  your  Lordships  will  excuse  my  being  so  long  and  earnest 
upon  this  head  because  it  is  a  subject  of  the  greatest  importance  to 
all  the  Plantations  and  what  I  humbly  conceive  has  often  been  mis- 
represented by  the  Merchants  in  London.  .  .  . 

Your  Ldp's  mo.  obt  &  mo.  humble  St. 

Sgd  W.  BURNET. 

B.   The  Land  Bank  and  the  Extension  of  the  Bubble  Act  to  the  Colonies, 

1741* 

In  order  to  provide  the  people  with  a  medium  of  exchange  the  colonial  govern- 
ment of  Massachusetts  had  for  some  years  issued  treasury  notes  which  were  to  be 
redeemed  out  of  taxes,  and  which  circulated  freely  as  money.  But  in  1739  the 
governor  was  instructed  not  to  issue  any  more  and  to  redeem  those  outstanding. 
Fearful  of  the  effects  of  such  a  sudden  contraction  of  the  currency  a  scheme  was 
brought  forward  by  a  group  of  citizens  for  a  Land  Bank,  which  should  issue  notes 
upon  the  security  of  land  or  commodities.  This  was  opposed  by  the  merchants 
of  Boston,  who  organized  in  opposition  a  Silver  Bank,  which  issued  notes  upon  a 
deposit  of  silver.  The  opponents  of  the  Land  Bank,  among  whom  Hutchinson  was 
a  leader,  also  invoked  the  authority  of  Parliament  to  put  an  end  to  it.  In  1720 
Parliament  had  passed  the  Bubble  Act  (6  Geo.  I,  ch.  18),  directed  against  specula- 

1  The  History  of  Massachusetts,  from  the  First  Settlement  thereof  in  1628,  until 
the  Year  1750.  By  Thomas  Hutchinson  (3d  edition,  Boston,  1795),  II,  352-5. 


LABOR,   EXCHANGE  AND   POPULATION  101 

live  companies,  and  they  now  declared  that  this  act  "did,  does,  and  shall  extend 
to  the  colonies  in  America."  This  act  was  retroactive  and  hence  especially  arbi- 
trary. John  Adams  gave  it  as  his  opinion  that  this  measure  was  more  important 
than  the  Stamp  Act  in  arousing  opposition  in  Massachusetts  to  the  English 
government. 

A  general  dread  of  drawing  in  all  the  paper  money  without  a 
substitution  of  any  other  instrument  of  trade  in  the  place  of  it,  dis- 
posed a  great  part  of  the  Province  to  favour  what  was  called  the 
land  bank  or  manufactory  scheme,  which  was  began  or  rather  revived 
in  this  year  1739,  and  produced  such  great  and  lasting  mischiefs, 
that  a  particular  relation  .of  the  rise,  progress  and  overthrow  of  it 
may  be  of  use  to  discourage  and  prevent  any  attempts  of  the  like 
nature  in  future  ages.  By  a  strange  conduct  in  the  general  court, 
they  had  been  issuing  bills  of  credit  for  eight  or  ten  years  annually 
for  charges  of  government,  and  being  willing  to  ease  each  present 
year,  they  had  put  off  the  redemption  of  the  bills  as  far  as  they  could ; 
but  the  governor  being  restrained  by  his  instruction  from  going 
beyond  the  year  1 741 ,  that  year  was  unreasonably  loaded  with  thirty 
or  forty  thousand  pounds  sterling  taxes,  which,  according  to  the 
general  opinion  of  the  people,  it  was  impossible  to  levy,  not  only 
on  account  of  the  large  sum,  but  because  all  the  bills  in  the  Province 
were  but  just  sufficient  to  pay  it,  and  there  was  very  little  silver  or 
gold,  which  by  an  act  of  government  was  allowed  to  be  paid  for 
taxes  as  equivalent  to  the  bills.  A  scheme  was  laid  before  the  general 
court  by  the  author  of  this  history,  then  one  of  the  representatives 
of  Boston,  in  which  it  was  proposed  to  borrow  in  England  upon 
interest,  and  to  import  into  the  Province,  a  sum  in  silver  equal  to 
all  the  bills  then  extant,  and  therewith  to  redeem  them  from  posses- 
sors, and  furnish  a  currency  for  the  inhabitants,  and  to  repay  the 
silver  at  distant  periods,  which  would  render  the  burden  of  taxes 
tolerable  by  an  equal  division  on  a  number  of  future  years,  and  would 
prevent  the  distress  of  trade  by  the  loss  of  the  only  instrument,  the 
bills  of  credit,  without  another  provided  in  its  place.  But  this 
proposal  was  rejected.  .  .  .  Royal  instructions  were  no  bar  to  the 
proceedings  of  private  persons.  The  project  of  a  bank  in  the  year 
1714  was  revived.  The  projector  of  that  bank  now  put  himself  at 
the  head  of  seven  or  eight  hundred  persons,  some  few  of  rank  and 
good  estate,  but  generally  of  low  condition  among  the  plebians,  and 
of  small  estate,  and  many  of  them  perhaps  insolvent.  This  notable 
company  were  to  give  credit  to  150,000!.  lawful  money,  to  be  issued 
in  bills,  each  person  being  to  mortgage  a  real  estate  in  proportion 


102  READINGS  IN  ECONOMIC  HISTORY 

to  the  sums  he  subscribed  and  took  out,  or  to  give  bond  with  two 
sureties,  but  personal  security  was  not  to  be  taken  for  more  than 
lool.  from  any  one  person.  Ten  directors  and  a  treasurer  were  to  be 
chosen  by  the  company.  Every  subscriber  or  partner  was  to  pay 
three  per  cent,  interest  for  the  sum  taken  out,  and  five  per  cent,  of 
the  principal;  and  he  that  did  not  pay  bills  might  pay  the  produce  and 
manufacture  of  the  Province  at  such  rates  as  the  directors  from  time 
to  time  should  set,  and  they  should  commonly  pass  in  lawful  money. 
The  pretence  was  that,  by  thus  furnishing  a  medium  and  instrument 
of  trade,  not  only  the  inhabitants  in  general  would  be  better  able  to 
procure  the  Province  bills  of  credit  for  their  taxes,  but  trade,  foreign 
and  inland,  would  revive  and  flourish.  The  fate  of  the  project  was 
thought  to  depend  upon  the  opinion  which  the  general  court  should 
form  of  it.  It  was  necessary  therefore  to  have  a  house  of  represen- 
tatives well  disposed.  Besides  the  eight  hundred  persons  subscribers, 
the  needy  part  of  the  Province  in  general  favoured  the  scheme.  One 
of  their  votes  will  go  as  far  in  popular  elections  as  one  of  the  most 
opulent.  The  former  are  most  numerous,  and  it  appeared  that  by 
far  the  majority  of  the  representatives  for  1 740  were  subscribers  to  or 
favourers  of  the  scheme,  and  they  have  ever  since  been  distinguished 
by  the  name  of  the  land  bank  house. 

Men  of  estates  and  the  principal  merchants  in  the  Province  ab- 
horred the  project  and  refused  to  receive  the  bills,  but  great  numbers 
of  shop-keepers,  who  had  lived  for  a  long  time  before  upon  the  fraud 
of  a  depreciating  currency,  and  many  small  traders,  gave  credit  to 
the  bills.  The  directors,  it  was  said,  by  a  vote  of  the  company, 
became  traders,  and  issued  just  what  bills  they  thought  proper  with- 
out any  fund  or  security  for  their  ever  being  redeemed.  They  pur- 
chased every  sort  of  commodity,  ever  so  much  a  drug,  for  the  sake 
of  pushing  off  their  bills,  and  by  one  means  or  other  a  large  sum, 
perhaps  fifty  or  sixty  thousand  pounds,  was  abroad.  To  lessen  the 
temptation  to  receive  the  bills,  a  company  of  merchants  agreed  to 
issue  their  notes,  or  bills  redeemable  by  silver  and  gold  at  distant 
periods,  much  like  the  scheme  in  1733,  and  attended  with  no  better 
effect.  The  governor  exerted  himself  to  blast  this  fraudulent  under- 
taking, the  land  bank.  Not  only  such  civil  and  military  officers  as 
were  directors  or  partners,  but  all  who  received  or  paid  any  of  the  bills, 
were  displaced.  The  governor  negatived  the  person  chosen  speaker 
of  the  house,  being  a  director  of  the  bank,  and  afterwards  negatived 
thirteen  of  the  new-elected  counsellors  who  were  directors  or  part- 
ners in  or  reputed  favourers  of  the  scheme.  But  all  was  insufficient 


LABOR,   EXCHANGE  AND   POPULATION  103 

to  suppress  it.  Perhaps -the  major  part,  in  number,  of  the  inhabitants 
of  the  Province,  openly  or  secretly  were  well-wishers  to  it.  One  of 
the  directors  afterwards  acknowledged  to  me,  that  although  he  en- 
tered into  the  company  with  a  view  to  the  public  interest,  yet  when 
he  found  what  power  and  influence  they  had  in  all  public  concerns, 
he  was  convinced  it  was  more  than  belonged  to  them,  more  than  they 
could  make  a  good  use  of,  and  therefore  unwarrantable.  Many  of  the 
most  sensible  discreet  persons  in  the  Province  saw  a  general  confusion 
at  hand.  The  authority  of  parliament  to  control  all  public  and  private 
persons  and  proceedings  in  the  colonies  was,  in  that  day,  questioned 
by  nobody.  Application  was  therefore  made  to  parliament  for  an 
act  to  suppress  the  company,  which,  notwithstanding  the  opposition 
made  by  their  agent,  was  very  easily  obtained,  and  therein  it  was 
declared  that  the  act  of  the  6th  of  king  George  I.  chapter  the  eighteenth, 
did,  does  and  shall  extend  to  the  colonies  and  plantations  in  America. 
It  was  said  the  act  of  George  I.  when  it  passed,  had  no  relation  to 
America,  but  another  act  twenty  years  after  gave  it  a  force  even 
from  the  passing  it,  which  it  never  could  have  had  without.  This 
was  said  to  be  an  instance  of  the  transcendent  power  of  parliament. 
Although  the  company  was  dissolved,  yet  the  act  of  parliament  gave 
the  possessors  of  the  bills  a  right  of  action  against  every  partner  or 
director  for  the  sums  expressed  with  interest.  The  company  were 
in  a  maze.  At  a  general  meeting  some,  it  was  said,  were  for  running 
all  hazards,  although  the  act  subjected  them  to  a  prasmunire,  but 
the  directors  had  more  prudence,  and  advised  them  to  declare  that 
they  considered  themselves  dissolved,  and  met  only  to  consult  upon 
some  method  of  redeeming  their  bills  from  the  possessors,  which  every 
man  engaged  to  endeavour  in  proportion  to  his  interest,  and  to  pay 
in  to  the  directors  or  some  of  them  to  burn  or  destroy.  Had  the 
company  issued  their  bills  at  the  value  expressed  in  the  face  of  them, 
they  would  have  had  no  reason  to  complain  of  being  obliged  to  redeem 
them  at  the  same  rate;  but  as  this  was  not  the  case  in  general,  and 
many  of  the  possessors  of  the  bills  had  acquired  them  for  half  their 
value,  as  expressed,  equity  could  not  be  done,  and  so  far  as  respected 
the  company,  perhaps,  the  parliament  was  not  very  anxious,  the 
loss  they  sustained  being  but  a  just  penalty  for  their  unwarrant- 
able undertaking  if  it  had  been  properly  applied.  Had  not  the 
parliament  interposed,  the  Province  would  have  been  in  the  utmost 
confusion,  and  the  authority  of  government  entirely  in  the  land 
bank  company. 


104  READINGS  IN  ECONOMIC  HISTORY 

C.    The  Necessity  of  Paper  Money  in  the  Colonies,  1764  l 

The  stoppage  of  the  trade  with  the  Spanish  West  Indies  by  the  enforcement  of 
the  navigation  acts  cut  off  from  the  British  colonies  in  America  their  chief  source 
of  silver,  while  they  were  drained  of  their  existing  supply  by  an  adverse  balance  of 
trade  with  England.  This  was  urged  by  many  as  an  argument  for  the  emission  of 
paper  money  by  the  colonies,  and  is  so  used  by  ex-Governor  Pownall  in  the  extract 
here  given. 

The  British  American  Colonies  have  not,  within  themselves,  the 
means  of  making  money  or  coin.  They  cannot  acquire  it  from 
Great  Britain;  the  balance  of  trade  being  against  them.  The  returns 
of  those  branches  of  commerce,  in  which  they  are  permitted  to  trade 
to  any  other  part  of  Europe,  are  but  barely  sufficient  to  pay  this 
balance. — By  the  present  act  of  navigation,  they  are  prohibited  from 
trading  with  the  Colonies  of  any  other  nations:  so  that  there  re- 
mains nothing  but  a  small  branch  of  African  trade,  and  the  scrambling 
profits  of  an  undescribed  traffic,  to  supply  them  with  silver.  However, 
matters  have  been  so  managed,  that  the  general  currency  of  the 
Colonies,  used  to  be  in  Spanish  and  Portugese  coin.  This  supplied 
the  internal  circulation  of  their  home  business,  and  always  finally 
came  to  England,  in  payments  for  what  the  Colonists  exported  from 
hence.  If  the  act  of  navigation  should  be  carried  into  such  rigorous 
execution,  as  to  cut  off  this  supply  of  a  silver  currency  to  the  Colonies; 
the  thoughts  of  administration  should  be  turned  to  the  devising  some 
means,  of  supplying  the  Colonies  with  money  of  some  sort  or 
other:  .  .  . 

.  .  .  The  remedy  lies  in  a  certain  address  in  carrying  in  execution 
the  act  of  navigation  —  but  if  that  remedy  is  neglected ;  the  next 
recourse  must  lie  in  some  means  of  maintaining  a  currency  specially 
appropriated  to  the  Colonies;  and  must  be  partly,  such  as  will  keep 
a  certain  quantity  of  silver  coin  in  circulation  there  —  and  partly, 
such  as  shall  establish  a  paper  currency,  holding  a  value  nearly  equal 
to  silver.  .  .  . 

In  Colonies,  the  essence  of  whose  nature  requires  a  progressive 
increase  of  settlements  and  trade,  and  yet  who  from  the  balance  of 
trade  with  the  mother  country,  being  against  them,  must  suffer  a 
constantly  decreasing  quantity  of  silver  money;  a  certain  quantity  of 
paper-money,  is  necessary.  It  is  necessary,  to  keep  up  the  increasing 
operations  of  this  trade,  and  the  settlements:  it  is  also  necessary, 
in  such  circumstances,  to  the  equal  distribution  and  general  applica- 

1  Administration  of  the  British  Colonies.  By  Thomas  Pownall  (5th  edition, 
London,  1774),  1, 180-1, 186,  194. 


LABOR,   EXCHANGE  AND   POPULATION  105 

tion  of  these  benefits  to  the  whole  Colony:  which  benefits  would 
otherwise  become  a  monopoly  to  the  monied  merchant  only:  it  is 
prudent,  and  of  good  policy  in  the  mother  coun  ry  to  permit  it,  as 
it  is  the  surest  means  of  drawing  the  balance  of  the  Colony  trade  and 
culture,  to  its  own  profit. 

III.   RETAIL  TRADE 

Market  at  Philadelphia,  1748  l 

Markets  and  fairs  were  still  of  general  use  in  the  middle  of  the  eighteenth 
century  in  bringing  buyers  and  sellers  together.  The  market  at  Philadelphia  was 
probably  the  most  important  of  its  kind  in  America,  and  served  a  very  useful  purpose. 

But  it  is  much  to  be  feared  that  the  trade  of  Philadelphia,  and  of 
all  the  English  colonies,  will  rather  decrease  than  increase,  in  case 
no  provision  is  made  to  prevent  it.  I  shall  hereafter  plainly  shew 
upon  what  foundation  this  decrease  of  trade  is  likely  to  take  place. 

The  town  not  only  furnishes  most  of  the  inhabitants  of  Pensyl- 
vania  with  the  goods  which  they  want,  but  numbers  of  the  inhabitants 
of  New  Jersey  come  every  day  and  carry  on  a  great  trade. 

The  town  has  two  great  fairs  every  )^ear;  one  in  May,  and  the  other 
in  November,  both  on  the  sixteenth  days  of  those  two  months.  But 
besides  these  fairs,  there  are  every  week  two  market  days,  viz.  Wednes- 
day and  Saturday.  On  those  days  the  country  people  of  Pensylvania 
and  New  Jersey  bring  to  town  a  quantity  of  victuals,  and  other 
productions  of  the  country,  and  this  is  a  great  advantage  to  the  town. 
It  is  therefore  to  be  wished  that  the  like  regulation  might  be  made  in 
our  Swedish  towns.  You  are  sure  to  meet  with  every  produce  of 
the  season,  which  the  country  affords,  on  the  market-days.  But 
on  other  days  they  are  in  vain  sought  for. 

Provisions  are  always  to  be  got  fresh  here,  and  for  that  reason 
most  of  the  inhabitants  never  buy  more  at  a  time  than  what  will  be 
sufficient  till  the  next  market-day.  In  summer  there  is  a  market 
almost  every  day;  for  the  victuals  do  not  keep  well  in  the  great  heat. 
There  are  two  places  in  the  town  where  these  markets  are  kept;  but 
that  near  the  court-house  is  the  principal.  It  begins  about  four  or 
five  o'clock  in  the  morning,  and  ends  about  nine  o'clock  in  the  forenoon. 

The  town  is  not  enclosed,  and  has  no  other  custom-house  than  the 
great  one  for  the  ships.  .  .  . 

1  Travels  into  North  America.  By  Peter  Kalm  (London,  1771).  In  Pinkerton, 
Voyages  and  Travels,  XIII,  394-5. 


106  READINGS  IN  ECONOMIC  HISTORY 

The  country  people  come  to  market  in  New  York  twice  a  week, 
much  in  the  same  manner  as  they  do  at  Philadelphia;  with  this 
difference,  that  the  markets  are  here  kept  in  several  places. 

POPULATION 

I.   GROWTH  OF  THE  POPULATION 

A.   The  Increase  of  Mankind,  1755  l 

The  rapid  increase  of  the  population  in  a  new  country  like  the  American  colonies, 
where  land  was  plentiful  and  marriages  early,  was  the  subject  of  comment  by  more 
than  one  observer.  No  one  has  stated  the  case  more  scientifically  than  Franklin. 

6.  Land  being  thus  plenty  in  America,  and  so  cheap  as  that  a 
labouring  Man,  that  understands  Husbandry,  can  in  a  short  Time 
save  Money  enough  to  purchase  a  Piece  of  new  Land  sufficient  for 
a  Plantation,  whereon  he  may  subsist  a  Family;  such  are  not  afraid  to 
marry;  for  if  they  even  look  far  enough  forward  to  consider  how  their 
Children  when  grown  up  are  to  be  provided  for,  they  see  that  more 
Land  is  to  be  had  at  Rates  equally,  easy,  all  Circumstances  considered. 

7.  Hence  Marriages  in  America  are  more  general,  and  more  gen- 
erally early,  than  in  Europe.     And  if  it  is  reckoned  there,  that  there 
is  but  one  Marriage  per  annum  among  100  Persons,  perhaps  we  may 
here  reckon  two;    and  if  in  Europe  they  have  but  four  Births  to  a 
Marriage  (many  of  their  Marriages  being  late)  we  may  here  reckon 
eight,  of  which  if  one  half  grow  up,  and  our  Marriages  are  made, 
reckoning  one  with  another  at  twenty  Years  of  Age,  our  People  must 
at  least  be  doubled  every  twenty  Years. 

8.  But  notwithstanding  this  Increase,  so  vast  is  the  Territory  of 
North-America,  that  it  will  require  many  Ages  to  settle  it  fully;   and 
till  it  is  fully  settled,  Labour  will  never  be  cheap  here,  where  no 
Man  continues  long  a  Labourer  for  others,  but  gets  a  Plantation 
of  his  own,  no  Man  continues  long  a  Journeyman  to  a  Trade,  but 
goes  among  those  new  Settlers,  and  sets  up  for  himself,  &c.     Hence 
Labour  is  no  cheaper  now,  in  Pensylvania,  than  it  was  thirty  Years 
ago,  tho'  so  many  Thousand  labouring  People  have  been  imported.  .  .  . 

21.  The  Importation  of  Foreigners  into  a  Country  that  has  as 
many  Inhabitants  as  the  present  Employments  and  Provisions  for 
Subsistence  will  bear,  will  be  in  the  End  no  Increase  of  People,  unless 

1  Observations  Concerning  the  Increase  of  Mankind  and  the  Peopling  of  Countries. 
By  Benjamin  Franklin  (Boston,  1755),  44~5,  51-4-  Also  in  Works  (Sparks  edi- 
tion, Boston,  1840),  II,  312-4. 


LABOR,   EXCHANGE  AND   POPULATION  107 

the  New-comers  have  more  Industry  and  Frugality  than  the  Natives, 
and  then  they  will  provide  more  Subsistence  and  increase  in  the 
Country;  but  they  will  gradually  eat  the  Natives  out.  —  Nor  is  it 
necessary  to  bring  in  Foreigners  to  fill  up  any  occasional  Vacancy 
in  a  Country;  for  such  Vacancy  (if  the  Laws  are  good,  §  14,  16) 
will  soon  be  filled  by  natural  Generation.  Who  can  now  find  the 
Vacancy  made  in  Sweden,  France,  or  other  warlike  Nations,  by  the 
Plague  of  Heroism  40  Years  ago;  in  France,  by  the  Expulsion  of 
the  Protestants;  in  England,  by  the  Settlement  of  her  Colonies;  or  in 
Guinea,  by  100  Years  Exportation  of  Slaves  that  has  blackened  half 
America?  —  The  Thinness  of  Inhabitants  in  Spain,  is  owing  to  national 
Pride  and  Idleness,  and  other  Causes,  rather  than  to  the  Expulsion 
of  the  Moors,  or  to  the  making  of  new  Settlements. 

22.  There  is  in  short  no  Bound  to  the  prolific  Nature  of  Plants 
or  Animals,  but  what  is  made  by  their  crowding  and  interfering 
with  each  other's  Means  of  Subsistence.  Was  the  Face  of  the  Earth 
vacant  of  other  Plants,  it  might  be  gradually  sowed  and  overspread 
with  one  Kind  only;  as  for  Instance,  with  Fennel;  and  were  it  empty 
of  other  Inhabitants,  it  might  in  a  few  Ages  be  replenished  from  one 
Nation  only;  as  for  Instance,  with  Englishmen.  Thus  there  are  sup- 
posed to  be  now  upwards  of  one  Million  English  Souls  in  North- 
America,  (tho'  'tis  thought  scarce  80,000  have  been  brought  over 
Sea)  and  yet  perhaps  there  is  not  one  the  fewer  in  Britain,  but  rather 
many  more,  on  Account  of  the  Employment  the  Colonies  afford  to 
Manufacturers  at  Home.  This  Million  doubling,  suppose  but  once 
in  25  Years,  will  in  another  Century  be  more  than  the  People  of 
England,  and  the  greatest  number  of  Englishmen  will  be  on  this  Side 
the  Water.  What  an  Accession  of  Power  to  the  British  Empire  by 
Sea  as  well  as  Land !  What  Increase  of  Trade  and  Navigation !  What 
Numbers  of  Ships  and  Seamen!  We  have  been  here  but  little  more 
than  100  Years,  and  yet  the  Force  of  our  Privateers  in  the  late  War, 
united,  was  greater,  both  in  Men  and  Guns,  than  that  of  the  whole 
British  Navy  in  Queen  Elizabeth's  Time. — How  important  an  Affair 
then  to  Britain  is  the  present  Treaty  for  settling  the  Bounds  between 
her  Colonies  and  the  French,  and  how  careful  should  she  be  to  secure 
Room  enough,  since  on  the  Room  depends  so  much  the  Increase  of 
her  People?  .  .  . 

24.  Which  leads  me  to  add  one  Remark:  That  the  Number  of 
purely  white  People  in  the  World  is  proportionably  very  small.  All 
Africa  is  black  or  tawny.  Asia  chiefly  tawny.  America  (exclusive 
of  the  new  Comers)  wholly  so.  And  in  Europe,  the  Spaniards, 


io8 


READINGS  IN  ECONOMIC  HISTORY 


Italians,  and  French,  are  generally  of  what  we  call  a  swarthy  Com- 
plexion; the  more  northern  Nations  with  the  English,  making  the 
principal  body  cf  White  People  on  the  Face  of  the  Earth.  I  could 
wish  their  Numbers  were  increased.  And  while  we  are,  as  I  may  call 
it,  Scouring  our  Planet,  by  clearing  America  of  Woods,  and  so  making 
this  Side  of  our  Globe  reflect  a  brighter  Light  to  the  Eyes  of  Inhabit- 
ants in  Mars  or  Venus,  why  should  we  in  the  Sight  of  Superior 
Beings,  darken  its  People?  Why  increase  the  sons  of  Africa,  by 
Planting  them  in  America,  where  we  have  so  fair  an  Opportunity, 
by  excluding  all  Blacks  and  Tawnys,  of  increasing  the  lovely  White 
and  Red?  But  perhaps  I  am  partial  to  the  Complexion  of  my 
Country,  for  such  Kind  of  Partiality  is  natural  to  Mankind. 

B.   Population  of  the  British  American  Colonies,  1752-1755  l 
The  following  estimate  of  the  population  of  the  colonies  in  the  middle  of  the 
i8th  century  was  made  up  from  the  reports  of  the  governors  to  the  Lords  of  Trade. 

An  Account  of  the  Number  of  White  Inhabitants  in  His  Majesty's 
Colonies  in  North  America  distinguishing  the  Number  of 
the  Militia  or  of  Men  capable  of  bearing  Arms;  taken  from 
the  last  Returns  transmitted  to  the  Lords  Commissioners 
for  Trade  &  Plantations,  and,  where  those  Returns  are  de- 
fective, from  the  best  accounts  which  can  be  obtained. 


Colonies 

Dates  of  the  returns 

Total  Num- 
ber of  Whites 

Militia 

Men  Cap- 
able of  bear- 
ing arms 

Georgia 

1752 

3,000 

South  Carolina 

1752 

25,000 

s.ooo 

North  Carolina 

1755 

50,000 

13,000 

Virginia 

1755 

125,000 

28,000 

Maryland 

1749 

IOO,OOO 

12,500 

Pennsylvania  | 

No  returns  since  the  Year 

*  22O,OOO 

25,000 

Connecticut    > 

1730;     but    according    to 

IOO,OOO 

Rhode  Island  ) 

the  best  Accounts 

30,000 

New  Jersey 

1755 

75,OOO 

10,000 

New  York                \ 

No  returns  since  the  Year 

55,OOO 

1  2,OOO 

Massachusetts  Bay  J 

1738;     but    according    to 

2OO,OOO 

4O.OOO 

New  Hampshire 

the  best  Accounts 
1755 

75,000 

6,000 

Nova  Scotia 

1754 

4,000 

1,200 

Total 

, 

*  Of  these  100,000  are  German  and  other  foreign  Protestants. 


1  Documents  relative  to  the  Colonial  History  of  New  York. 
O'Callaghan  (Albany,  1855),  VI,  993. 


Edited  by  E.  B. 


LABOR,  EXCHANGE  AND   POPULATION  109 


C.   Large  Families  in  America,  1748  1 

More  than  one  traveler  in  the  colonies  noticed  the  large  families  and  the  rapid 
growth  of  the  population  under  the  favoring  conditions  of  a  new  country.  The 
population  doubled  about  once  in  twenty-three  years,  which  is  an  extremely  rapid 
rate  of  growth.  Kalm,  ever  a  scientific  observer,  collected  the  following  interesting 
data  on  this  point. 

It  does  not  seem  difficult  to  find  out  the  reasons  why  the  people 
multiply  more  here  than  in  Europe.  As  soon  as  a  person  is  old 
enough,  he  may  marry  in  these  provinces,  without  any  fear  of  poverty; 
for  there  is  such  a  tract  of  good  ground  yet  uncultivated,  that  a  new- 
married  man  can,  without  difficulty,  get  a  spot  of  ground,  where  he 
may  sufficiently  subsist  with  his  wife  and  children.  The  taxes  are 
very  low,  and  he  need  not  be  under  any  concern  on  their  account. 
The  liberties  he  enjoys  are  so  great  that  he  considers  himself  as  a 
prince  in  his  possessions.  I  shall  here  demonstrate,  by  some  plain 
examples,  what  effect  such  a  constitution  is  capable  of. 

Maons  Keen,  one  of  the  Swedes  in  Raccoon,  was  now  near  seventy 
years  old:  he  had  many  children,  grandchildren,  and  great-grand- 
children; so  that,  of  those  who  were  yet  alive,  he  could  muster  up 
forty-five  persons.  Besides  them,  several  of  his  children  and  grand- 
children died  young,  and  some  in  a  mature  age.  He  was,  therefore 
uncommonly  blessed.  Yet  his  happiness  is  not  comparable  to  that 
which  is  to  be  seen  in  the  following  examples,  and  which  I  have 
extracted  from  the  Philadelphia  gazette. 

In  the  year  1732,  died  at  Ipswich,  in  New  England,  Mrs.  Sarah 
Tuthil,  a  widow,  aged  eighty-six  years.  She  had  brought  sixteen 
children  into  the  world;  and  from  seven  of  them  only  she  had  seen 
one  hundred  and  seventy-seven  grand-children  and  great-grand- 
children. 

In  1739,  May  3oth,  the  children,  grand,  and  great-grand-children 
of  Mr.  Richard  Buttington,  in  the  parish  of  Chester,  in  Pensylvania, 
were  assembled  in  his  house;  and  they  made  together  one  hundred 
and  fifteen  persons.  The  parent  of  these  children,  Richard  Butting- 
ton,  who  was  born  in  England,  was  then  entering  into  his  eighty-fifth 
year;  and  was  at  that  time  quite  active,  fresh,  and  sensible.  His 
eldest  son,  then  sixty  years  old,  was  the  first  Englishman  born  in 
Pensylvania. 

1  Travels  into  North  America.  By  Peter  Kalm  (London,  1770).  In  Pinkerton 
Voyages  and  Travels,  XIII,  504-5. 


no  READINGS  IN  ECONOMIC  HISTORY 

In  1742,  8th  of  Jan.,  died  at  Trenton,  in  New  Jersey,  Mrs.  Sarah 
Furman,  a  widow,  aged  ninety- seven  years.  She  was  born  in  New 
England,  and  left  five  children,  sixty-one  grand-children,  one  hundred 
and  eighty-two  great-grand-children,  and  twelve  great-great-grand- 
children, who  were  all  alive  when  she  died. 

In  1739,  28th  of  Jan.,  died  at  South  Kingston,  in  New  England, 
Mrs.  Maria  Hazard,  a  widow,  in  the  hundredth  year  of  her  age. 
She  was  born  in  Rhode  Island,  and  was  the  grandmother  of  the 
then  vice-governor  of  that  island,  Mr.  George  Hazard.  She  could 
count  altogether  five  hundred  children,  grand-children,  great-grand- 
children, and  great-great-grand-children.  When  she  died  two  hun- 
dred and  five  persons  of  them  were  alive;  a  grand-daughter  of  hers 
had  already  been  grandmother  near  fifteen  years. 

In  this  manner,  the  usual  wish  of  blessing  in  our  liturgy,1  that 
the  new-married  couple  may  see  their  grandchildren,  till  the  third 
and  fourth  generation,  has  been  literally  fulfilled  in  regard  to  some 
of  these  persons. 

II.   CONDITION  or  THE  PEOPLE 

A.   A  Prosperous  People,  1775  2 

The  anonymous  author  of  American  Husbandry  gives  a  more  favorable  account 
of  the  inhabitants  than  he  does  of  the  agriculture  of  the  colonies.  His  account 
is  evidently  based  upon  association  with  the  more  well-to-do  members  of  the  popu- 
lation, but  probably  does  not  overstate  the  prosperity  of  the  community  as  a  whole. 

There  is  in  many  respects  a  great  resemblance  between  New  Eng- 
land and  Great  Britain.  In  the  best  cultivated  parts  of  it,  you  would 
not  in  travelling  through  the  country,  know,  from  its  appearance, 
that  you  were  from  home.  The  face  of  the  country  has  in  general 
a  cultivated,  inclosed,  and  chearful  prospect;  the  farm-houses  are 
well  and  substantially  built,  and  stand  thick;  gentlemen's  houses 
appear  every  where,  and  have  an  air  of  a  wealthy  and  contented 
people.  Poor,  strolling  and  ragged  beggars  are  scarcely  ever  to  be 
seen ;  all  the  inhabitants  of  the  country  appear  to  be  well  fed,  cloathed, 
and  lodged,  nor  is  any  where  a  greater  degree  of  independency,  and 
liberty  to  be  met  with :  nor  is  that  distinction  of  the  ranks  and  classes 
to  be  found  which  we  see  in  Britain,  but  which  is  infinitely  more 
apparent  in  France  and  other  arbitrary  countries.  .  .  . 

1  Mr.  Kalm  speaks  here  of  the  Swedish  liturgy. 

2  American  Husbandry.      By  an  American   (London,   1775),  I,  61-2,   70-1, 
184-5,  187-8. 


LABOR,  EXCHANGE  AND   POPULATION  in 

Respecting  the  lower  classes  in  New  England,  there  is  scarcely 
any  part  of  the  world  in  which  they  are  better  off.  The  price  of  labour 
is  very  high,  and  they  have  with  this  advantage  another  no  less  valu- 
able, of  being  able  to  take  up  a  tract  of  land  whenever  they  are  able 
to  settle  it.  In  Britain  a  servant  or  labourer  may  be  master  of  thirty 
or  forty  pounds  without  having  it  in  their  power  to  lay  it  out  in 
one  useful  or  advantageous  purpose;  it  must  be  a  much  larger  sum 
to  enable  them  to  hire  a  farm,  but  in  New  England  there  is  no  such 
thing  as  a  man  procuring  such  a  sum  of  money  by  his  industry  without 
his  taking  a  farm  and  settling  upon  it.  The  daily  instances  of  this 
give  an  emulation  to  all  the  lower  classes  and  make  them  point  their 
endeavours  with  peculiar  industry  to  gain  an  end  which  they  all 
esteem  so  particularly  flattering. 

This  great  ease  of  gaining  a  farm,  renders  the  lower  class  of  people 
very  industrious;  which,  with  the  high  price  of  labour,  banishes 
everything  that  has  the  least  appearance  of  begging,  or  that  wander- 
ing, destitute  state  of  poverty,  which  we  see  so  common  in  England. 
A  traveller  might  pass  half  through  the  colony  without  finding, 
from  the  appearance  of  the  people,  that  there  was  such  a  thing  as 
a  want  of  money  among  them.  .  .  . 

This  country  [Pennsylvania]  is  peopled  by  as  happy  and  free  a 
set  of  men  as  any  in  America.  Out  of  trade  there  is  not  much  wealth 
to  be  found,  but  at  the  same  time  there  is  very  little  poverty,  and 
hardly  such  a  thing  as  a  beggar  in  the  province.  This  is  not  only  a 
consequence  of  the  plenty  of  land  and  the  rate  of  labour,  but  also 
of  the  principles  of  the  Quakers,  who  have  a  considerable  share  in  the 
government  of  the  country.  It  is  much  to  the  honour  of  this  sect 
that  they  .support  their  own  poor  in  all  countries,  in  a  manner  much 
more  respectable  than  known  in  any  other  religion.  .  .  . 

Their  meals  are  three  times  a  day,  and  served  quite  in  the  English 
taste:  coffee,  tea,  and  chocolate,  are  of  the  best  sorts,  cheap  enough 
to  be  commanded  in  plenty  by  every  planter,  especially  coffee  and 
chocolate;  sugar  also  is  cheaper  than  in  England;  these,  with  good 
bread  and  good  butter,  give  a  breakfast  superior  to  what  gentlemen 
of  small  estates  usually  make  in  England.  For  dinner  and  supper 
they  are  much  better  supplied,  as  may  easily  be  supposed,  when  the 
plenty  is  considered  that  abounds  in  an  American  plantation :  game, 
variety  of  fish,  venison  almost  every  where,  poultry  in  prodigious 
plenty  and  variety,  meat  of  all  kinds,  very  good,  and  killed  on  every 
plantation  of  any  size;  several  sorts  of  fruits,  in  a  plenty  surpassing 
any  thing  known  in  the  best  climates  of  Europe,  such  as  melons, 


H2  READINGS  IN  ECONOMIC  HISTORY 

water-melons,  and  cucumbers,  in  the  open  field;  apples,  pears,  cher- 
ries, peaches,  nectarines,  goose-berries,  currants,  strawberries,  and  ras- 
berries,  gathering  some  every  month  from  May  till  October.  Their 
grapes,  though  plentiful  to  excess,  are  inferior.  These  are  circum- 
stances that  make  it  neither  difficult  nor  expensive  to  keep  an  excellent 
table.  The  wine  commonly  drank  is  Madeira,  at  not  more  than  half 
the  price  of  England;  freight  is  cheaper,  and  there  is  none,  or  a  very 
trifling  duty.  French  and  Spanish  wines  are  also  drank;  rum  is 
very  cheap;  and  good  beer  is  brewed  by  those  who  are  attentive  to 
the  operation. 

From  hence  it  is  sufficiently  clear,  that  the  time  passed  at  the 
table  need  not  be  a  barren  entertainment. 


B.    The  People  of  New  York,  1759 x 

The  inhabitants  of  New  York  were  more  sociable  than  the  New  Englanders, 
and  as  prosperous  as  those  of  any  of  the  colonies.  Burnaby  was  an  English  clergy- 
man, who  traveled  extensively  throughout  the  colonies,  and  wrote  entertainingly 
of  his  impressions. 

The  inhabitants  of  New  York,  in  then-  character,  very  much 
resemble  the  Pensylvanians:  more  than  half  of  them  are  Dutch, 
and  almost  all  traders:  they  are,  therefore,  habitually  frugal,  indus- 
trious, and  parsimonious.  Being  however  of  different  nations,  differ- 
ent languages,  and  different  religions,  it  is  almost  impossible  to 
give  them  any  precise  or  determinate  character.  The  women  are 
handsome  and  agreeable;  though  rather  more  reserved  than  the 
Philadelphian  ladies.  Their  amusements  are  much  the  same  as  in 
Pensylvania;  viz.  balls,  and  sleighing  expeditions  in  the  winter; 
and,  in  the  summer,  going  in  parties  upon  the  water,  and  fishing;  or 
making  excursions  into  the  country.  .  .  . 

The  present  state  of  this  province  is  flourishing:  it  has  an  exten- 
sive trade  to  many  parts  of  the  world,  particularly  to  the  West  Indies; 
and  has  acquired  great  riches  by  the  commerce  which  it  has  carried 
on,  under  flags  of  truce,  to  Cape-Francois  and  Monte-Christo.  The 
troops,  by  having  made  it  the  place  of  their  general  rendezvous,  have 
also  enriched  it  very  much.  However,  it  is  burthened  with  taxes, 
and  the  present  public  debt  amounts  to  more  than  300,000!.  currency. 
The  taxes  are  laid  upon  estates  real  and  personal;  and  there  are 

1  Travels  through  the  Middle  Settlements  of  North- America,  in  the  Years  1759  and 
1760.  By  Andrew  Burnaby  (London,  1775),  66-7. 


LABOR,   EXCHANGE   AND   POPULATION  113 

duties  upon  Negroes,  and  other  importations.  The  provincial  troops 
are  about  2600  men.  The  difference  of  exchange  between  currency 
and  bills,  is  from  70  to  80  per  cent. 

C.   An  Adverse  View  of  Virginians,  1759  1 

An  unfriendly  characterization  of  the  inhabitants  of  Virginia  is  given  by 
Burnaby. 

From  what  has  been  said  of  this  colony  [Virginia],  it  will  not  be 
difficult  to  form  an  idea  of  the  character  of  its  inhabitants.  The 
climate  and  external  appearance  of  the  country  conspire  to  make 
them  indolent,  easy,  and  good-natured ;  extremely  fond  of  society,  and 
much  given  to  convivial  pleasures.  In  consequence  of  this,  they 
seldom  show  any  spirit  of  enterprise,  or  expose  themselves  willingly 
to  fatigue.  Their  authority  over  their  slaves  renders  them  vain 
and  imperious,  and  entire  strangers  to  that  elegance  of  sentiment, 
which  is  so  peculiarly  characteristic  of  refined  and  polished  nations. 
Their  ignorance  of  mankind  and  of  learning,  exposes  them  to  many 
errors  and  prejudices,  especially  in  regard  to  Indians  and  negroes, 
whom  they  scarcely  consider  as  of  the  human  species;  so  that  it  is 
almost  impossible,  in  cases  of  violence,  or  even  murder,  committed 
upon  those  unhappy  people  by  any  of  the  planters,  to  have  the  de- 
linquents brought  to  justice;  for  either  the  grand-jury  refuse  to  find 
the  bill,  or  the  petit  jury  bring  in  their  verdict,  not  guilty. 

The  display  of  a  character  thus  constituted,  will  naturally  be  in 
acts  of  extravagance,  ostentation,  and  a  disregard  of  economy;  it  is 
not  extraordinary,  therefore,  that  the  Virginians  out-run  their  in- 
comes; and  that  having  involved  themselves  in  difficulties,  they  are 
frequently  tempted  to  raise  money  by  bills  of  exchange,  which  they 
know  will  be  returned  protested,  with  ten  per  cent,  interest. 

The  public  or  political  character  of  the  Virginians  corresponds 
with  their  private  one:  they  are  haughty  and  jealous  of  their  liberties, 
impatient  of  restraint,  and  can  scarcely  bear  the  thought  of  being 
controuled  by  any  superior  power.  Many  of  them  consider  the 
colonies  as  independent  states,  not  connected  with  Great  Britain, 
otherwise  than  by  having  the  same  common  King,  and  being  bound 
to  her  by  natural  affection.  There  are  but  few  of  them  that  have 
a  turn  for  business,  and  even  those  are  by  no  means  expert  at  it.  I 

1  Travels  through  the  Middle  Settlements  in  North-America,  in  the  Years  1759  and 
1760.  By  Andrew  Burnaby  (London,  1775).  In  Pinkerton,  Voyages  and  Travels, 
XIII,  714-6. 


H4  READINGS  IN  ECONOMIC  HISTORY 

have  known  them,  upon  a  very  urgent  occasion,  vote  the  relief  of  a 
garrison,  without  once  considering  whether  the  thing  was  practicable, 
when  it  was  most  evidently  and  demonstrably  otherwise.  In  matters 
of  commerce  they  are  ignorant  of  the  necessary  principles  that  must 
prevail  between  a  colony  and  the  mother  country;  they  think  it  a 
hardship  not  to  have  an  unlimited  trade  to  every  part  of  the  world. 
They  consider  the  duties  upon  their  staples  as  injurious  only  to  them- 
selves; and  it  is  utterly  impossible  to  .persuade  them  that  they  affect 
the  consumer  also.  However,  to  do  them  justice,  the  same  spirit 
of  generosity  prevails  here  which  does  in  their  private  character; 
they  never  refuse  any  necessary  supplies  for  the  support  of  govern- 
ment when  called  upon,  and  are  a  generous  and  loyal  people.  .  .  . 

The  Carolinians  live  in  much  the  same  easy  and  luxurious  manner 
as  the  Virginians.  The  planters  are  remarkably  hospitable  towards 
strangers;  and  persons  who  fall  into  distress  through  bad  success 
or  misfortune  scarce  ever  fail  of  being  relieved  by  their  liberality: 
so  that  beggary  is  almost  unknown  in  these  parts  of  the  world. 

There  are  supposed  to  be  300,000  souls  in  North  Carolina,  amongst 
whom  are  great  numbers  of  Negroes  and  other  slaves.  The  taxables 
in  1773  were  computed  to  amount  to  64,000:  the  number  of  Negroes 
and  Mulattoes  about  10,000. 


CHAPTER   IV 
ENGLISH  COLONIAL  THEORY  AND  POLICY,  1651-1763 

I.  THE  MERCANTILE  SYSTEM 

A  Modern  Interpretation,  i882l 

The  most  scholarly  and  philosophical  view  of  the  body  of  economic  practices 
and  doctrines  of  the  sixteenth,  seventeenth,  and  eighteenth  centuries,  known  as 
Mercantilism,  is  that  of  Professor  Schmoller,  in  the  essay  here  quoted.  Professor 
Schmoller  is  professor  of  economic  history  in  the  University  of  Berlin. 

Yet  this  very  time,  —  the  second  half  of  the  sixteenth  cen- 
tury and  the  seventeenth  century,  —  was  an  epoch  which  gave 
every  inducement  for  an  economic  transformation.  The  way 
was  already  clear,  out  of  the  narrow  circle  of  the  small  terri- 
tory into  the  larger  union  of  forces  possible  only  in  the  great 
state.  An  immeasurable  horizon  had  been  opened  to  the 
world's  trade  in  India  and  America;  the  possession  of  spice  colonies, 
and  of  the  new  gold  and  silver  countries,  promised  measureless  riches 
to  those  states  that  understood  how  to  seize  their  share  of  the  booty. 
But  it  was  clear  that  for  such  purposes  it  was  necessary  to  have  power- 
ful fleets,  and  either  great  trading  companies  or  equivalent  state 
organisations.  At  home,  also,  economic  changes,  of  no  less  impor- 
tance, took  place.  The  new  postal  services  created  an  altogether 
new  system  of  communication.  Bills  of  exchange,  and  the  large 
exchange  operations  at  certain  fairs,  together  with  the  banks  which 
were  now  making  their  appearance,  produced  an  enormous  and  far- 
reaching  machinery  of  credit.  The  rise  of  the  press  gave  birth  to 
a  new  kind  of  public  opinion,  and  to  a  crowd  of  newspapers  which 
cooperated  with  the  postal  service  in  transforming  the  means  of 
communication.  Moreover,  there  now  took  place  in  several  countries 
a  geographical  division  of  labour,  which  broke  up  the  old  many- 
sidedness  of  town  industry ;  here  the  woollen  manufacture  was  group- 

1  The  Mercantile  System  and  its  Historical  Significance.  By  Gustav  Schmoller. 
In  Economic  Classics.  Edited  by  W.J.Ashley  (New  York,  1896),  46-69,  passim. 
Printed  by  permission  of  the  publishers,  The  Macmillan  Company. 


n6 

ing  itself  in  certain  neighborhoods  and  around  certain  towns,  there 
the  linen  manufacture;  here  the  tanning  trade,  there  the  hardware 
trade.  The  old  handicraft  (Handwerk}  began  to  convert  itself  into 
a  domestic  industry  (Hausindustrie) ; l  the  old  staple  trade,  carried 
on  in  person  by  the  travelling  merchants,  began  to  assume  its  modern 
shape  with  agents,  commission  dealers,  and  speculation. 

These  forces  all  converging  impelled  society  to  some  large  economic 
reorganisation  on  a  broader  basis,  and  pointed  to  the  creation  of 
national  states  with  a  corresponding  policy.  .  .  .  What,  to  each  in 
its  time,  gave  riches  and  superiority  first  to  Milan,  Venice,  Florence, 
and  Genoa;  then,  later,  to  Spain  and  Portugal;  and  now  to  Holland, 
France,  and  England,  and,  to  some  extent,  to  Denmark  and  Sweden, 
was  a  state  policy  in  economic  matters,  as  superior  to  the  territorial 
as  that  had  been  to  the  municipal.  .  .  .  States  arose,  forming  united, 
and  therefore  strong  and  wealthy,  economic  bodies,  quite  different 
from  earlier  conditions;  hi  these,  quite  unlike  earlier  times,  the 
state  organisation  assisted  the  national  economy  and  this  the  state 
policy;  and,  quite  unlike  earlier  times  too,  public  finance  served  as 
the  bond  of  union  between  political  and  economic  life.  .  .  . 
Herein  economic  and  political  interests  went  hand  in  hand.  .  .  . 
The  whole  internal  history  of  the  seventeenth  and  eighteenth 
centuries,  not  only  in  Germany,  but  everywhere  else,  is  summed 
up  in  the  opposition  of  the  economic  policy  of  the  state  to  that 
of  the  town,  the  district,  and  the  several  Estates;  the  whole 
foreign  history  is  summed  up  in  the  opposition  to  one  another  of  the 
separate  interests  of  the  newly  rising  states,  each  of  which  sought 
to  obtain  and  retain  its  place  in  the  circle  of  European  nations,  and 
in  that  foreign  trade  which  now  included  America  and  India.  Ques- 
tions of  political  power  were  at  issue  which  were,  at  the  same  time, 
questions  of  economic  organisation.  What  was  at  stake  was  the 
creation  of  real  political  economies  as  unified  organisms,  the  center 
of  which  should  be,  not  merely  a  state  policy  reaching  out  in  all  direc- 
tions, but  rather  the  living  heartbeat  of  a  united  sentiment. 

Only  he  who  thus  conceives  of  mercantilism  will  understand  it; 
in  its  innermost  kernel  it  is  nothing  but  state  making  —  not  state 


1  Hausindustrie  and  Domestic  System  are  terms  which  came  to  be  employed 
in  Germany  and  England  to  designate  the  industrial  conditions  destroyed  or  threat- 
ened by  the  Factory  System,  to  which  they  presented  the  contrast  that  the  work  was 
done  in  the  workman's  home.  But  they  are  now  used  by  economic  historians  as 
more  or  less  technical  terms  to  describe  a  stage  in  industrial  development  marked 
by  other  and  even  more  important  traits. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  117 

making  in  a  narrow  sense,  but  state  making  and  national-economy 
making  at  the  same  time;  state  making  in  the  modern  sense,  which 
creates  out  of  the  political  community  an  economic  community, 
and  so  gives  it  a  heightened  meaning.  The  essence  of  the  system 
lies  not  in  some  doctrine  of  money  or  of  the  balance  of  trade;  not  in 
tariff  barriers,  protective  duties,  or  navigation  laws;  but  in  something 
far  greater:  —  namely,  in  the  total  transformation  of  society  and  its 
organisation,  as  well  as  of  the  state  and  its  institutions,  in  the  replacing 

of  a  local  and  territorial  economic  policy  by  that  of  the  national  state 

If  we  pause  for  a  while  to  consider  this  foreign  and  external 
economic  policy  of  the  European  states  of  the  seventeenth  and  eigh- 
teenth centuries  —  which  it  has  hitherto  been  the  custom  to  regard  as 
the  essential  feature  of  the  mercantile  system,  —  it  is  not,  of  course, 
our  purpose  to  describe  the  details  of  its  several  forms.  The  general 
features  of  its  regulations  are  well  enough  known.  Difficulties  were 
put  in  the  way  of  the  importation  of  manufactured  goods;  and  their 
production  and  exportation  were  favoured  by  the  prohibition  of  the 
export  of  raw  materials,  by  bounties  on  export,  and  by  commercial 
treaties.  Encouragement  was  given  to  domestic  shipping,  to  the 
fisheries,  and  to  the  coasting  trade  by  restricting  or  forbidding 
foreign  competition.  Commerce  with  the  colonies  and  the  supplying 
of  them  with  European  wares,  was  reserved  for  the  mother  country. 
The  importation  of  colonial  produce  had  to  take  place  directly  from 
the  colony  itself,  and  not  by  way  of  European  ports ;  and  everywhere 
an  attempt  was  made  to  establish  direct  trading  relations  by  great 
privileged  trading  companies  and  by  state  aid  in  manifold  ways. 
England  promoted  the  export  of  corn  and  the  prosperity  of  agricul- 
ture at  the  same  time  by  the  payment  of  bounties;  France  hindered 
the  export  of  corn  for  the  benefit  of  industry;  Holland,  in  its  later 
days,  sought  to  create  very  large  stores  of  corn  and  a  very  free  trade 
in  corn  so  as  both  to  insure  a  due  domestic  supply  and  to  encourage 
trade.  But,  as  we  have  already  said,  an  account  of  these  several 
measures  would  go  beyond  the  purpose  of  this  essay.  The  general 
features  are  known;  the  details  have  even  yet  not  been  subjected  to 
due  scientific  investigation.  Our  only  purpose  here  is  to  grasp  the 
fundamental  ideas  of  the  system;  which,  naturally,  found  varying 
expression,  here  in  high  duties,  there  in  low.  Here  in  the  prevention, 
there  in  the  encouragement  of  the  corn  trade.  The  thought  pursued 
everywhere  was  this:  as  competition  with  other  countries  fluctuated 
up  and  down,  to  cast  the  weight  of  the  power  of  the  state  into  the  scales 
of  the  balance  hi  the  way  demanded  in  each  case  by  national  interests. 


n8  READINGS  IN  ECONOMIC  HISTORY 

II.  THE  ENGLISH  COLONIAL  POLICY 

A.    The  Navigation  Act  of  1660  1 

The  Dutch,  who  were  the  foremost  commercial  nation  of  Europe  during  the 
seventeenth  century,  had  obtained  virtual  control  of  the  colonial  trade,  and  in  order 
to  gain  this  trade  for  themselves  the  English  government  passed  a  series  of  meas- 
ures, known  as  the  navigation  acts,  which  were  designed  to  restrict  the  carrying 
trade  between  England  and  her  colonies  to  British  ships.  These  acts  had  important 
effects  upon  Dutch,  English,  and  colonial  shipping.  The  act  of  1660  repeated,  and 
somewhat  extended,  in  more  careful  language,  the  provisions  of  the  act  of  1651. 
Only  the  most  essential  parts  of  the  latter  act  are  here  given. 

An  Act  for  the  Encourageing  and  increasing  of  Shipping  and 
Navigation  Qi66o] 

[I]  For  the  increase  of  Shiping  and  incouragement  of  the  Naviga- 
tion of  this  Nation,  wherein  under  the  good  providence  and  protection 
of  God  the  Wealth  Safety  and  Strength  of  this  Kingdome  is  soe 
much  concerned  Bee  it  Enacted  by  the  Kings  most  Excellent  Majesty 
and  by  the  Lords  and  Commons  in  this  present  Parliament  assem- 
bled and  the  Authoritie  thereof  That  from  and  after  the  First  day 
of  December  One  thousand  six  hundred  and  sixty  and  from  thence 
forward  noe  Goods  or  Commodities  whatsoever  shall  be  Imported 
into  or  Exported  out  of  any  Lands  Islelands  Plantations  or  Terri- 
tories to  his  Majesty  belonging  or  in  his  possession  or  which  may 
hereafter  belong  unto  or  be  in  the  possession  of  His  Majesty  His 
Heires  and  Successors  in  Asia  Africa  or  America  in  any  other  Ship 
or  Ships  Vessell  or  Vessells  whatsoever  but  in  such  Ships  or  Vessells 
as  doe  truely  and  without  f  raude  belong  onely  to  the  people  of  England 
or  Ireland  Dominion  of  Wales  or  Towne  of  Berwicke  upon  Tweede, 
or  are  of  the  built  of,  and  belonging  to  any  of  the  said  Lands  Islands 
Plantations  or  Territories  as  the  Proprietors  and  right  Owners  therof 
and  wherof  the  Master  and  three  fourthes  of  the  Marriners  at  least 
are  English  under  the  penalty  of  the  Forfeiture  and  Losse  of  all 
the  Goods  and  Commodityes  which  shall  be  Imported  into,  or  Ex- 
ported out  of,  any  the  aforesaid  places  in  any  other  Ship  or  Vessell, 
as  alsoe  of  the  Ship  or  Vessell  with  all  its  Guns  Furniture  Tackle 
Ammunition  and  Apparell,  .  .  . 

1  Statutes  of  the  Realm,  V,  246-250;  and  in  Select  Charters  and  other  Docu- 
ments illustrative  of  American  History,  1606-1775,  edited  by  W.  Macdonald  (New 
York,  1910),  110-115,  passim.  Printed  by  permission  of  the  editor  and  the 
publishers,  The  Macmillan  Company. 


ENGLISH   COLONIAL  THEORY  AND   POLICY  119 

[III.]  And  it  is  further  Enacted  .  .  .  that  noe  Goods  or  Com- 
modityes  whatsoever  of  the  growth  production  or  manufacture  of 
Africa  Asia  or  America  or  of  any  part  thereof,  or  which  are  described 
or  laid  downe  in  the  usuall  Maps  or  Cards  of  those  places  be  Imported 
into  England  Ireland  or  Wales  Islands  of  Guernsey  or  Jersey  or  Towne 
of  Berwicke  upon  Tweede  in  any  other  Ship  or  Ships  Vessell  or  Ves- 
sels whatsoever,  but  in  such  as  doe  truely  and  without  fraude  belong 
onely  to  the  people  of  England  or  Ireland,  Dominion  of  Wales  or 
Towne  of  Berwicke  upon  Tweede  or  of  the  Lands  Islands  Plantations 
or  Territories  in  Asia  Africa  or  America  to  his  Majesty  belonging  as 
the  proprietors  and  right  owners  thereof,  and  whereof  the  Master  and 
three  fourthes  at  least  of  the  Mariners  are  English  under  the  penalty 
of  the  forfeiture  of  all  such  Goods  and  Commodityes,  and  of  the  Ship 
or  Vessell  in  which  they  were  Imported  with  all  her  Guns  Tackle 
Furniture  Ammunition  and  Apparell,  .  .  . 

[IV.]  And  it  is  further  Enacted.  .  .  that  noe  Goods  or 
Commodityes  that  are  of  forraigne  growth  production  or  manufacture 
and  which  are  to  be  brought  into  England  Ireland  Wales,  the  Islands 
of  Guernsey  &  Jersey  or  Towne  of  Berwicke  upon  Tweede  in  English 
built  shiping,  or  other  shiping  belonging  to  some  of  the  aforesaid 
places,  and  navigated  by  English  Mariners  as  above-said  shall  be 
shiped  or  brought  from  any  other  place  or  Places,  Country  or  Coun- 
tries but  onely  from  those  of  their  said  Growth  Production  or  Manu- 
facture, or  from  those  Ports  where  the  said  Goods  and  Commodityes 
can  onely  or  are  or  usually  have  beene  first  shiped  for  transporta- 
tion and  from  none  other  Places  or  Countryes  under  the  penalty 
of  the  forfeiture  of  all  such  of  the  aforesaid  Goods  as  shall  be 
Imported  from  any  other  place  or  Country  contrary  to  the  true 
intent  and  meaning  hereof,  as  alsoe  of  the  ship  in  which  they  were 
imported  with  all  her  Guns  Furniture  Ammunition  Tackle  and 
Apparel,  .... 

[XVIII.]  And  it  is  further  Enacted  .  .  .  That  from  and  after 
.  .  .  [April  i,  1661]  .  .  .  noe  Sugars  Tobaccho  Cotton  Wool  Indi- 
coes  Ginger  Fustick  or  other  dyeing  wood  of  the  Growth  Production 
or  Manufacture  of  any  English  Plantations  in  America  Asia  or  Africa 
shall  be  shiped  carryed  conveyed  or  transported  from  any  of  the  said 
English  Plantations  to  any  Land  Island  Territory  Dominion  Port  or 
place  whatsoever  other  then  to  such  [other]  English  Plantations  as  doe 
belong  to  His  Majesty  His  Heires  and  Successors  or  to  the  King- 
dome  of  England  or  Ireland  or  Principallity  of  Wales  or  Towne  of 
Berwicke  upon  Tweede  there  to  be  laid  on  shore  under  the  penalty 


120  READINGS  IN  ECONOMIC  HISTORY 

of  the  Forfeiture  of  the  said  Goods  or  the  full  value  thereof,  as  alsoe 
of  the  Ship  with  all  her  Guns  Tackle  Apparel  Ammunition  and 
Furniture,  .  .  . 

B.    The  Navigation  Act  of  1663  1 

While  the  earlier  acts  had  sought  to  give  to  British  vessels  a  monopoly  of  the 
carrying  trade  between  England  and  her  colonies,  that  of  1663  was  designed  to 
secure  to  English  merchants  the  profits  of  handling  all  goods  that  were  sent  to  the 
colonies,  as  these  must  now  be  "laden  and  shipped"  in  England  and  from  "noe 
other  place."  With  the  passage  of  this  act  colonial  trade  was  brought  completely 
under  Parliamentary  control,  and  subsequent  measures  aimed  simply  to  strengthen 
the  system  by  more  detailed  regulations. 

An  Act  for  the  Encouragement  of  Trade  [1663.3 

[IV.3  And  in  reguard  His  Majesties  Plantations  beyond  the  Seas 
are  inhabited  and  peopled  by  His  Subjects  of  this  His  Kingdome  of 
England,  For  the  maintaining  a  greater  correspondence  and  kindnesse 
betweene  them  and  keepeing  them  in  a  firmer  dependance  upon  it, 
and  rendring  them  yet  more  beneficiall  and  advantagious  unto  it  in 
the  farther  Imployment  and  Encrease  of  English  Shipping  and  Sea- 
men, vent  of  English  Woollen  and  other  Manufactures  and  Commodi- 
ties rendring  the  Navigation  to  and  from  the  same  more  safe  and 
cheape,  and  makeing  this  Kingdome  a  Staple  not  onely  of  the  Com- 
modities of  those  Plantations  but  alsoe  of  the  Commodities  of  other 
Countryes  and  Places  for  the  supplying  of  them,  and  it  being  the 
usage  of  other  Nations  to  keepe  their  Plantations  Trade  to  themselves, 
Be  it  enacted  and  it  is  hereby  enacted  That  from  and  after  the  Five 
and  twentyeth  day  of  March  One  thousand  six  hundred  sixtie  fower 
noe  Commoditie  of  the  Growth  Production  or  Manufacture  of  Europe 
shall  be  imported  into  any  Land  Island  Plantation  Colony  Territory 
or  Place  to  His  Majestic  belonging,  or  which  shall  hereafter  belong 
unto,  or  be  in  the  Possession  of  His  Majestic  His  Heires  and  Succes- 
sors in  Asia  Africa  or  America  (Tangier  onely  excepted)  but  what  shall 
be  bona  fide  and  without  fraude  laden  and  shipped  in  England  Wales 
or  the  Towne  of  Berwicke  upon  Tweede  and  in  English  built  Ship- 
ping, .  .  .  and  whereof  the  Master  and  three  Fourthes  of  the 
Marriners  at  least  are  English,  and  which  shall  be  carry ed  directly 
thence  to  the  said  Lands  Islands  Plantations  Colonyes  Territories 

1  Statutes  of  the  Realm,  V,  449-452;  also  in  Select  Charters  and  other  Docu- 
ments illustrative  of  American  History,  1606-1775,  edited  by  W.  Macdonald  (New 
York,  1910),  133-135.  Printed  by  permission  of  the  editor  and  the  publishers, 
The  Macmillan  Company. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  121 

or  Places,  and  from  noe  other  place  or  places  whatsoever  Any  Law 
Statute  or  Usage  to  the  contrary  notwithstanding,  under  the  Penaltie 
of  the  losse  of  all  such  Commodities  of  the  Growth  Production  or 
Manufacture  of  Europe  as  shall  be  imported  into  any  of  them  from 
any  other  Place  whatsoever  by  Land  or  Water,  .  .  . 

[V.]  PROVIDED  alwayes  .  .  .  That  it  shall  and  may  be  law- 
full  to  shipp  and  lade  in  such  Shipps,  and  soe  navigated  as  in  the  fore- 
goeing  Clause  is  sett  downe  and  expressed  in  any  part  of  Europe  Salt 
for  the  Fisheries  of  New  England  and  New  found  land,  and  to  shipp 
and  lade  in  the  Medera's  Wines  of  the  Growth  thereof,  and  to  shipp 
and  lade  in  the  Westerne  Islands  or  Azores  Wines  of  the  Growth  of 
the  said  Islands,  and  to  shipp  and  take  in  Servants  or  Horses  in  Scot- 
land or  Ireland,  and  to  shipp  or  lade  in  Scotland  all  sorts  of  Victuall 
of  the  Growth  or  Production  of  Scotland,  and  to  shipp  or  lade  in  Ire- 
land all  sortes  of  Victuall  of  the  Growth  or  Production  of  Ireland, 
and  the  same  to  transport  into  any  of  the  said  Lands  Islands  Planta- 
tions Colonyes  Territories  or  Places,  Any  thing  in  the  foregoing  Clause 
in  the  contrary  in  any  wise  notwithstanding. 

C.    The  English  Colonial  System:  a  Favorable  View,  i688l 

Sir  Josiah  Child  was  the  chairman,  and  virtually  the  ruler,  of  the  East  India 
Company  for  some  years,  and  was  therefore  greatly  interested  in  the  extension  of  the 
commercial  power  of  England  and  favored  the  navigation  acts.  He  argues,  however, 
in  the  extract  here  quoted  that  "Profit  and  power  ought  joyntly  to  be  considered," 
and  that  the  encouragement  of  her  shipping  would  make  England  a  powerful  and 
wealthy  country.  This  was  good  mercantilistic  doctrine.  Child's  book  was  first 
published  in  1688,  and  was  issued  in  a  much  enlarged  form  in  the  second  edition. 

CHAP.   IV. 

CONCERNING   THE   ACT   OF   NAVIGATION 

Though  this  Act  be  by  most  concluded  a  very  beneficial  Act  for 
this  Kingdom,  especially  by  the  Masters  and  Owners  of  Shiping,  and 
by  all  Sea-men;  yet  some  there  are,  both  wise  and  honest  Gentlemen 
and  Merchants,  that  doubt  whether  the  Inconveniencies  it  hath  brought 
with  it,  be  not  greater  than  the  Conveniencies. 

For  my  own  part,  I  am  of  opinion  that  in  relation  to  Trade,  Ship- 
ping, Profit  and  Power,  it  is  one  of  the  choicest  and  most  prudent  Acts 
that  ever  was  made  in  England,  and  without  which  we  had  not  now 
been  Owners  of  one  half  the  Shipping,  nor  Trade,  nor  employed  one 

1  A  New  Discourse  of  Trade.  By  Sir  Josiah  Child  (2d  edition,  London, 
1694),  112-114. 


122  READINGS  IN  ECONOMIC  HISTORY 

half  of  the  Sea-men  which  we  do  at  present;  but  seing  time  hath 
discovered  some  Inconveniencies  in  it,  if  not  Defects,  which  in  my  poor 
opinion  do  admit  of  an  easie  Amendment,  and  seing  that  the  whole 
Act  is  not  approved  by  unanimous  consent,  I  thought  fit  to  Discourse 
a  little  concerning  it,  wherein  after  my  plain  method  I  shall  lay  down 
such  Objections  as  I  have  met  with,  and  subjoyn  my  Answers,  with 
such  Reasons  as  occur  to  my  memory  in  confirmation  of  my  own 
Opinion. 

The  Objections  against  the  whole  Act  are  such  as  these; 

OBJECT,  i.  Some  have  told  me,  That  I  on  all  occasions  magnifie 
the  Dutch  policy  in  relation  to  their  Trade,  and  the  Dutch  have  no 
A  ct  of  Navigation,  and  therefore  they  are  certainly  not  always  in  the 
right,  as  to  the  understanding  of  their  true  Interest  in  Trade,  or  else 
we  are  in  the  wrong  in  this.  I  answer,  I  am  yet  to  be  informed 
where  the  Dutch  have  missed  their  proper  Interest  in  Trade,  but  that 
which  is  fit  for  one  Nation  to  do  in  relation  to  their  Trade,  is  not  fit 
for  all,  no  more  than  the  same  Policy  is  necessary  to  a  prevailing  Army 
that  are  Masters  of  the  Field,  to  an  Army  of  less  force,  then  to  be 
able  to  encounter  their  Enemy  at  all  times  and  places:  The  Dutch  by 
reason  of  their  great  Stocks,  low  Interest,  multitude  of  Merchants  and 
Shipping,  are  Masters  of  the  Field  in  Trade,  and  therefore  have  no  need 
to  build  Castles,  Fortresses  and  places  of  Retreat;  such  I  account  Laws 
of  limitation,  and  securing  of  Particular  Trades  to  the  Natives  of  any 
Kingdom ;  because  they,  viz.  the  Dutch  may  be  well  assured,  That  no 
Nation  can  enter  in  common  with  them  in  any  Trade,  to  gain  Bread  by  it, 
while  their  own  use  of  Money  is  at  3  per  cent,  and  others  at  6  per  cent 
and  upwards,  &c.  Whereas  if  we  should  suffer  their  Shiping  in 
common  with  ours  in  those  Trades,  which  are  secured  to  the  English 
by  Act  of  Navigation,  they  must  necessarily  in  a  few  Years,  for  the 
reasons  above  said,  eat  us  quite  out  of  them. 

OBJECT.  2.  The  second  Objection  to  the  whole  Act  is;  Some  will 
confess  that  as  to  Merchants  and  Owners  of  Ships  the  Act  of  Navigation 
is  eminently  beneficial,  but  say,  that  Merchants  and  Owners  are  but  an 
inconsiderable  number  of  men  in  respect  of  the  whole  Nation,  and 
that  Interest  of  the  greater  number,  that  our  Native  Commodities 
and  Manufactures  should  be  taken  from  us  at  the  best  rates,  and 
Foreign  Commodities  sold  us  at  the  cheapest,  with  admission  of 
Dutch  Merchants  and  Shiping  in  common  with  the  English,  by  my  own 
implication  would  effect. 

My  answer  is,  That  I  cannot  deny  but  this  may  be  true,  if  the 
present  profit  of  the  generality  be  barely  and  singly  considered;  ..  :  . 


ENGLISH   COLONIAL  THEORY  AND   POLICY  123 

but  this  Kingdom  being  an  Island,  the  defence  whereof  hath  alwayes 
been  our  Shiping  and  Sea-men,  it  seems  to  me  absolutely  necessary  that 
Profit  and  power  ought  joyntly  to  be  considered,  and  if  so,  I  think  none 
can  deny  but  the  Act  of  Navigation  hath  and  doth  occasion  building 
and  employing  three  times  the  number  of  Ships  and  Sea-men,  that 
otherwise  we  should  or  would  do,  and  that  consequently,  //  our 
Force  at  Sea  were  so  greatly  impared,  it  would  expose  us  to  the  receiving 
of  all  kinds  of  Injuries  and  Affronts  from  our  Neighbours,  and  in  con- 
clusion render  us  a  despicable  and  miserable  People. 

OBJECTIONS   TO   SEVERAL   PARTS   OF   THE   ACT   OF   NAVIGATION 

OBJECT,  i.  The  Inhabitants  and  Planters  of  our  Plantations  in 
America,  say,  This  Act  will  in  time  ruin  their  Plantations,  if  they  may 
not  be  permitted,  at  least  to  carry  their  Sugars  to  the  best  Markets,  and 
not  be  compelled  to  send  all  to,  and  receive  all  Commodities  from  England. 

I  answer,  //  they  were  not  kept  to  the  Rules  of  the  Act  of  Navigation, 
the  consequence  would  be,  that  in  a  few  years  the  benefit  of  them  would  be 
wholly  lost  to  the  Nation;  It  being  agreeable  to  the  policy  of  the 
Dutch,  Danes,  French,  Spaniards,  Portugals  and  all  Nations  in  the  World, 
to  keep  their  external  Provinces  and  Collonies  in  a  subjection  unto,  and 
dependency  upon  their  Mother-Kingdom;  and  if  they  should  not  do 
so,  the  Dutch  who  as  I  have  said,  are  Masters  of  the  Field  in  Trade, 
would  carry  away  the  greatest  of  advantage  by  the  Plantations,  of 
all  the  Princes  in  Christendom,  leaving  us  and  others  only  the  trouble 
of  breeding  men,  and  sending  them  abroad  to  cultivate  the  Ground, 
and  have  bread  for  their  Industry.  .  .  . 


D.    The  English  Colonial  System:  an  Unfavorable  View,  1776  l 

The  general  policy  of  England  toward  her  colonies  was  nowhere  so  clearly  slated 
by  any  contemporary  writer  as  by  Adam  Smith.  He  was  the  intellectual  father  of 
modern  individualism,  and  believed  that  the  state  should  not  interfere  in  matters 
of  trade  or  industry,  but  should  permit  the  individual  to  seek  his  own  economic 
interests.  Consequently  he  did  not  approve  of  the  mercantile  doctrines  which 
found  their  expression  in  the  economic  policy  of  England  toward  her  colonies. 

But  there  are  no  colonies  of  which  the  progress  has  been  more 
rapid  than  that  of  the  English  in  North  America. 

Plenty  of  good  land,  and  liberty  to  manage  their  own  affairs 

1  An  Inquiry  into  the  Nature  and  Causes  of  the  Wealth  of  Nations.  By  Adam 
Smith  (Edinburgh,  1776).  Edited  by  Edwin  Cannan  (London,  1904),  73-86, 
passim. 


124  READINGS  IN  ECONOMIC  HISTORY 

their  own  way,  seem  to  be  the  two  great  causes  of  the  prosperity  of 
all  new  colonies. 

In  the  plenty  of  good  land  the  English  colonies  of  North  America, 
though,  no  doubt,  very  abundantly  provided,  are,  however,  inferior 
to  those  of  the  Spaniards  and  Portugueze,  and  not  superior  to  some  of 
those  possessed  by  the  French  before  the  late  war.  But  the  political 
institutions  of  the  English  colonies  have  been  more  favourable  to  the 
improvement  and  cultivation  of  this  land,  than  those  of  any  of  the 
other  three  nations.  .  .  . 

Fourthly,  in  the  disposal  of  their  surplus  produce,  or  of  what  is 
over  and  above  their  own  consumption,  the  English  colonies  have 
been  more  favoured,  and  have  been  allowed  a  more  extensive  market, 
than  those  of  any  other  European  nation.  Every  European  nation 
has  endeavoured  more  or  less  to  monopolize  to  itself  the  commerce 
of  its  colonies,  and,  upon  that  account,  has  prohibited  the  ships  of 
foreign  nations  from  trading  to  them,  and  has  prohibited  them  from 
importing  European  goods  from  any  foreign  nation.  But  the  manner 
in  which  this  monopoly  has  been  exercised  in  different  nations  has 
been  very  different. 

Some  nations  have  given  up  the  whole  commerce  of  their  colonies 
to  an  exclusive  company,  of  whom  the  colonies  were  obliged  to  buy 
all  such  European  goods  as  they  wanted,  and  to  whom  they  were 
obliged  to  sell  the  whole  of  their  own  surplus  produce.  .  .  . 

Other  nations,  without  establishing  an  exclusive  company,  have 
confined  the  whole  commerce  of  their  colonies  to  a  particular  port  of 
the  mother  country,  from  whence  no  ship  was  allowed  to  sail,  but 
either  in  a  fleet  and  at  a  particular  season,  or,  if  single,  in  consequence 
of  a  particular  licence,  which  in  most  cases  was  very  well  paid  for.  .  .  . 

Other  nations  leave  the  trade  of  their  colonies  free  to  all  their 
subjects,  who  may  carry  it  on  from  all  the  different  ports  of  the 
mother  country,  and  who  have  occasion  for  no  other  licence  than  the 
common  dispatches  of  the  customhouse.  ....  Under  so  liberal  a 
policy  the  colonies  are  enabled  both  to  sell  their  own  produce  and  to 
buy  the  goods  of  Europe  at  a  reasonable  price.  But  since  the  disso- 
lution of  the  Plymouth  company,  when  our  colonies  were  but  in  their 
infancy,  this  has  always  been  the  policy  of  England.  It  has  generally 
too  been  that  of  France,  and  has  been  uniformly  so  since  the  dissolu- 
tion of  what,  in  England,  is  commonly  called  their  Mississippi  com- 
pany. The  profits  of  the  trade,  therefore,  which  France  and  England 
carry  on  with  their  colonies,  though  no  doubt  somewhat  higher  than 
if  the  competition  was  free  to  all  other  nations,  are,  however,  by  no 


ENGLISH   COLONIAL  THEORY  AND   POLICY  125 

means  exorbitant;  and  the  price  of  European  goods  accordingly  is 
not  extravagantly  high  in  the  greater  part  of  the  colonies  of  either  of 
those  nations. 

In  the  exportation  of  their  own  surplus  produce  too,  it  is  only 
with  regard  to  certain  commodities  that  the  colonies  of  Great  Britain 
are  confined  to  the  market  of  the  mother  country.  These  commodi- 
ties having  been  enumerated  in  the  act  of  navigation  and  in  some 
other  subsequent  acts,  have  upon  that  account  been  called  enumerated 
commodities.1  The  rest  are  called  non-enumerated;  and  may  be 
exported  directly  to  other  countries,  provided  it  is  in  British  or 
Plantation  ships,  of  which  the  owners  and  three-fourths  of  the  mariners 
are  British  subjects. 

Among  the  non-enumerated  commodities  are  some  of  the  most 
important  productions  of  America  and  the  West  Indies;  grain  of  all 
sorts,  lumber,  salt  provisions,  fish,  sugar,  and  rum.  .  .  . 

The  enumerated  commodities  are  of  two  sorts:  first,  such  as  are 
either  the  peculiar  produce  of  America,  or  as  cannot  be  produced,  or 
at  least  are  not  produced,  in  the  mother  country.  Of  this  kind  are, 
melasses,  coffee,  cacaonuts,  tobacco,  pimento,  ginger,  whale-fins,  raw 
silk,  cotton-wool,  beaver,  and  other  peltry  of  America,  indigo,  fustic, 
and  other  dying  woods:  secondly,  such  as  are  not  the  peculiar  prod- 
uce of  America,  but  which  are  and  may  be  produced  in  the  mother 
country,  though  not  in  such  quantities  as  to  supply  the  greater  part 
of  her  demand,  which  is  principally  supplied  from  foreign  countries. 
Of  this  kind  are  all  naval  stores,  masts,  yards,  and  bowsprits,  tar, 
pitch,  and  turpentine,  pig  and  bar  iron,  copper  ore,  hides  and  skins, 
pot  and  pearl  ashes.  The  largest  importation  of  commodities  of  the 
first  kind  could  not  discourage  the  growth  or  interfere  with  the  sale 
of  any  part  of  the  produce  of  the  mother  country.  By  confining  them 
to  the  home  market,  our  merchants,  it  was  expected,  would  not  only 
be  enabled  to  buy  them  cheaper  in  the  Plantations,  and  consequently 
to  sell  them  with  a  better  profit  at  home,  but  to  establish  between 
the  Plantations  and  foreign  countries  an  advantageous  carrying  trade, 
of  which  Great  Britain  was  necessarily  to  be  the  center  or  emporium, 
as  the  European  country  into  which  those  commodities  were  first 
to  be  imported.  The  importation  of  commodities  of  the  second  kind 
might  be  so  managed  too,  it  was  supposed,  as  to  interfere,  not  with 
the  sale  of  those  of  the  same  kind  which  were  produced  at  home,  but 


1  The  commodities  originally  enumerated  in   12  Car.  II,  c.    18,  §  18,  were 
sugar,  tobacco,  cotton-wool,  indigo,  ginger,  fustic,  and  other  dyeing  woods. 


126 

with  that  of  those  which  were  imported  from  foreign  countries; 
because,  by  means  of  proper  duties,  they  might  be  rendered  always 
somewhat  dearer  than  the  former,  and  yet  a  good  deal  cheaper  than 
the  latter.  By  confining  such  commodities  to  the  home  market, 
therefore,  it  was  proposed  to  discourage  the  produce,  not  of  Great 
Britain,  but  of  some  foreign  countries  with  which  the  balance  of 
trade  was  believed  to  be  unfavourable  to  Great  Britain. 

The  prohibition  of  exporting  from  the  colonies,  to  any  other  coun- 
try but  Great  Britain,  masts,  yards  and  bowsprits,  tar,  pitch,  and 
turpentine,  naturally  tended  to  lower  the  price  of  timber  in  the  colo- 
nies, and  consequently  to  increase  the  expence  of  clearing  their 
lands,  the  principal  obstacle  to  their  improvement.  But  about  the 
beginning  of  the  present  century,  in  1703,  the  pitch  and  tar  company 
of  Sweden  endeavoured  to  raise  the  price  of  their  commodities  to 
Great  Britain,  by  prohibiting  their  exportation,  except  in  their  own 
ships,  at  their  own  price,  and  in  such  quantities  as  they  thought 
proper.  In  order  to  counteract  this  notable  piece  of  mercantile  policy, 
and  to  render  herself  as  much  as  possible  independent,  not  only  of 
Sweden,  but  of  all  the  other  northern  powers,  Great  Britain  gave  a 
bounty  upon  the  importation  of  naval  stores  from  America  and  the 
effect  of  this  bounty  was  to  raise  the  price  of  timber  in  America, 
much  more  than  the  confinement  to  the  home  market  could  lower  it; 
and  as  both  regulations  were  enacted  at  the  same  time,  their  joint 
effect  was  rather  to  encourage  than  to  discourage  the  clearing  of 
land  in  America.  .  .  . 

The  liberality  of  England,  however,  towards  the  trade  of  her 
colonies  has  been  confined  chiefly  to  what  concerns  the  market  for 
their  produce,  either  in  its  rude  state,  or  in  what  may  be  called  the 
very  first  stage  of  manufacture.  The  more  advanced  or  more  refined 
manufactures  even  of  the  colony  produce,  the  merchants  and  manu- 
facturers of  Great  Britain  chuse  to  reserve  to  themselves,  and  have 
prevailed  upon  the  legislature  to  prevent  their  establishment  in  the 
colonies,  sometimes  by  high  duties,  and  sometimes  by  absolute 
prohibitions.  .  .  . 

While  Great  Britain  encourages  in  America. the  manufactures  of 
pig  and  bar  iron,  by  exempting  them  from  duties  to  which  the  like 
commodities  are  subject  when  imported  from  any  other  country,  she 
imposes  an  absolute  prohibition  upon  the  erection  of  steel  furnaces 
and  slit-mills  in  any  of  her  American  plantations.1  She  will  not  suffer 

1  \_2$  Geo.  II,  c.  29.] 


ENGLISH   COLONIAL  THEORY  AND   POLICY  127 

her  colonists  to  work  in  those  more  refined  manufactures  even  for 
their  own  consumption;  but  insists  upon  their  purchasing  of  her 
merchants  and  manufacturers  all  goods  of  this  kind  which  they  have 
occasion  for. 

She  prohibits  the  exportation  from  one  province  to  another  by 
water,  and  even  the  carriage  by  land  upon  horseback  or  in  a  cart, 
of  hats,  of  wools  and  woollen  goods,1  of  the  produce  of  America;  a 
regulation  which  effectually  prevents  the  establishment  of  any  manu- 
facture of  such  commodities  for  distant  sale,  and  confines  the  industry 
of  her  colonists  in  this  way  to  such  coarse  and  household  manu- 
factures, as  a  private  family  commonly  makes  for  its  own  use,  or  for 
that  of  some  of  its  neighbours  in  the  same  province. 

To  prohibit  a  great  people,  however,  from  making  all  that  they 
can  of  every  part  of  their  own  produce,  or  from  employing  their 
stock  and  industry  in  the  way  that  they  judge  most  advantageous 
to  themselves,  is  a  manifest  violation  of  the  most  sacred  rights  of 
mankind.  Unjust,  however,  as  such  prohibitions  may  be,  they  have 
not  hitherto  been  very  hurtful  to  the  colonies.  Land  is  still  so  cheap, 
and,  consequently,  labour  so  dear  among  them ,  that  they  can  import 
from  the  mother  country,  almost  all  the  more  refined  or  more  advanced 
manufactures  cheaper  than  they  could  make  them  for  themselves. 
Though  they  had  not,  therefore,  been  prohibited  from  establishing 
such  manufactures,  yet  in  their  present  state  of  improvement,  a 
regard  to  their  own  interest  would,  probably,  have  prevented  them 
from  doing  so.  In  their  present  state  of  improvement,  those  prohibi- 
tions, perhaps,  without  cramping  their  industry,  or  restraining  it 
from  any  employment  to  which  it  would  have  gone  of  its  own  accord, 
are  only  impertinent  badges  of  slavery  imposed  upon  them,  without 
any  sufficient  reason,  by  the  groundless  jealousy  of  the  merchants  and 
manufacturers  of  the  mother  country.  In  a  more  advanced  state 
they  might  be  really  oppressive  and  insupportable. 

Great  Britain  too,  as  she  confines  to  her  own  market  some  of  the 
most  important  productions  of  the  colonies,  so  in  compensation  she 
gives  to  some  of  them  an  advantage  in  that  market;  sometimes  by 
imposing  higher  duties  upon  the  like  productions  when  imported 
from  other  countries,  and  sometimes  by  giving  bounties  upon  their 
importation  from  the  colonies.  In  the  first  way  she  gives  an  advantage 
in  the  home-market  to  the  sugar,  tobacco,  and  iron  of  her  own  colonies, 
and  hi  the  second  to  their  raw  silk,  to  their  hemp  and  flax,  to  their 


1  plats  under  5  Geo.  II,  c.  22;  wools  under  10  and  n  W.  Ill,  c. 


128  READINGS  IN  ECONOMIC  HISTORY 

indigo,  to  their  naval-stores,  and  to  their  building-timber.  This 
second  way  of  encouraging  the  colony  produce  by  bounties  upon 
importation,  is,  so  far  as  I  have  been  able  to  learn,  peculiar  to  Great 
Britain.  The  first  is  not.  Portugal  does  not  content  herself  with 
imposing  higher  duties  upon  the  importation  of  tobacco  from  any 
other  country,  but  prohibits  it  under  the  severest  penalties. 

With  regard  to  the  importation  of  goods  from  Europe,  England 
has  likewise  dealt  more  liberally  with  her  colonies  than  any  other 
nation. 

Great  Britain  allows  a  part,  almost  always  the  half,  generally  a 
larger  portion,  and  sometimes  the  whole  of  the  duty  which  is  paid 
upon  the  importation  of  foreign  goods,  to  be  drawn  back  upon  their 
exportation  to  any  foreign  country.  No  independent  foreign  country, 
it  was  easy  to  foresee,  would  receive  them  if  they  came  to  it  loaded 
with  the  heavy  duties  to  which  almost  all  foreign  goods  are  subjected 
on  therr  importation  into  Great  Britain.  Unless,  therefore,  some 
part  of  those  duties  was  drawn  back  upon  exportation,  there  was  an 
end  of  the  carrying  trade;  a  trade  so  much  favoured  by  the  mercantile 
system.  .  .  . 

Of  the  greater  part  of  the  regulations  concerning  the  colony  trade, 
the  merchants  who  carry  it  on,  it  must  be  observed,  have  been  the 
principal  advisers.  We  must  not  wonder,  therefore,  if,  in  the  greater 
part  of  them,  their  interest  has  been  more  considered  than  either 
that  of  the  colonies  or  that  of  the  mother  country.  In  their  exclusive 
privilege  of  supplying  the  colonies  with  all  the  goods  which  they 
wanted  from  Europe,  and  of  purchasing  all  such  parts  of  their  surplus 
produce  as  could  not  interfere  with  any  of  the  trades  which  they 
themselves  carried  on  at  home,  the  interest  of  the  colonies  was  sacri- 
ficed to  the  interest  of  those  merchants.  .  .  . 

But  though  the  policy  of  Great  Britain  with  regard  to  the  trade 
of  her  colonies  has  been  dictated  by  the  same  mercantile  spirit  as 
that  of  other  nations,  it  has,  however,  upon  the  whole,  been  less  illib- 
eral and  oppressive  than  that  of  any  of  them. 

m.  WORKINGS  or  THE  COLONIAL  POLICY  IN  ENGLAND 
A.  Balance  of  Trade  Theory,  1630 1 

An  important  phase  of  the  mercantile  system,  though  by  no  means  the  whole  of 
it,  was  the  insistence  upon  the  desirability  of  amassing  within  the  country  a  great 

1  England's  Treasure  by  Forraign  Trade.  By  Thomas  Mun  (London,  1664). 
In  Economic  Classics.  Edited  by  W.  J.  Ashley  (New  York,  1895),  7-8. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  129 

store  of  the  precious  metals.  Since  England  had  no  mines  of  her  own,  either  at 
home  or  in  her  colonies,  she  could  hope  to  obtain  this  only  by  exporting  more  com- 
modities than  she  imported  and  receiving  the  difference  in  gold  and  silver,  that  is 
by  maintaining  a  so-called  favorable  balance  of  trade.  This  was  perhaps  first 
clearly  stated  by  Thomas  Mun,  an  English  merchant  and  director  in  the  East  India 
Company.  His  book  was  written  in  1630,  but  was  not  published  till  thirty  years 
later. 

Although  a  Kingdom  may  be  enriched  by  gifts  received,  or  by 
purchase  taken  from  some  other  Nations,  yet  these  are  things  uncer- 
tain and  of  small  consideration  when  they  happen.  The  ordinary 
means  therefore  to  encrease  our  wealth  and  treasure  is  by  Forraign 
Trade,  wherein  wee  must  ever  observe  this  rule;  to  sell  more  to 
strangers  yearly  than  wee  consume  of  theirs  in  value.  For  suppose 
that  when  this  Kingdom  is  plentifully  served  with  the  Cloth,  Lead, 
Tinn,  Iron,  Fish  and  other  native  commodities,  we  doe  yearly  export 
the  overplus  to  forraign  Countries  to  the  value  of  twenty  two  hundred 
thousand  pounds;  by  which  means  we  are  enabled  beyond  the  Seas 
to  buy  and  bring  in  forraign  wares  for  our  use  and  Consumptions, 
to  the  value  of  twenty  hundred  thousand  pounds;  By  this  order 
duly  kept  in  our  trading,  we  may  rest  assured  that  the  Kingdom 
shall  be  enriched  yearly  two  hundred  thousand  pounds,  which  must 
be  brought  to  us  in  so  much  Treasure;  because  that  part  of  our 
stock  which  is  not  returned  to  us  in  wares  must  necessarily  be  brought 
home  in  treasure. 

B.   The  Purpose  of  the  Navigation  Acts,  1764  1 

The  conception  of  the  acts  of  trade  as  a  series  of  measures  designed  to  promote 
the  interests  of  the  British  Empire  as  a  whole,  in  which  the  colonies  were  regarded  as 
parts  of  a  larger  whole,  is  here  presented  by  ex-Governor  Pownall.  Properly 
administered  they  would  create  "a  grand  marine  empire." 

The  laws  of  trade  respecting  America,  were  framed  and  enacted 
for  the  regulating  mere  plantations;  tracts  of  foreign  country,  employed 
in  raising  certain  specified  and  enumerated  commodities,  solely  for 
the  use  of  the  trade  and  manufactures  of  the  mother-country  —  the 
purchase  of  which  the  mother-country  appropriated  to  itself.  These 
laws  considered  these  plantations  as  a  kind  of  farms,  which  the 
mother  country  had  caused  to  be  worked  and  cultured  for  its  own  use. 
But  the  spirit  of  commerce,  (operating  on  the  nature  and  situation 
of  these  external  dominions,  beyond  what  the  mother  country  or  the 

1  The  Administration  of  the  British  Colonies.  By  Thomas  Pownall  (London, 
1774),  I,  251-2. 


I3o  READINGS  IN  ECONOMIC  HISTORY 

Colonists  themselves  ever  thought  of,  planned,  or  even  hoped  for) 
has  wrought  up  these  plantations  to  become  objects  of  trade;  has  enlarged 
and  combined  the  intercourse  of  the  barter  and  exchange  of  their 
various  produce,  into  a  very  complex  and  extensive  commercial 
interest:  The  operation  of  this  spirit  has,  in  every  source  of  interest 
and  power,  raised  and  established  the  British  government  on  a  grand 
commercial  basis;  has  by  the  same  power,  to  the  true  purposes  of 
the  same  interest,  extended  the  British  dominions  through  every 
part  of  the  Atlantic  Ocean,  to  the  actually  forming  A  GRAND 
MARINE  EMPIRE;  if  the  administration  of  our  government,  will 
do  their  part,  by  extending  the  British  government  to  wheresoever 
the  British  dominions  do  extend. 


C.  Advantage  to  England  of  Colonial  Shipping, 

According  to  the  prevailing  mercantilist  doctrine  the  building  up  of  a  strong 
navy  and  of  a  merchant  marine  was  essential  to  a  nation's  strength.  Consequently 
the  New  England  colonies  were  particularly  valuable  as  they  aided  England  by  the 
building  of  ships,  the  production  of  naval  stores,  and  the  development  of  the  carrying 
trade. 

I  have  heard  some  People  exclaim  against  some  of  the  Northern 
Colonies,  and  look  upon  them  as  Rivals  to  their  Mother  Country, 
and  particularly  in  regard  to  this  Article  of  Shipping  and  supplying 
Europe  with  Rice  and  Corn.  This  Notion  seems  to  me  to  be  ill 
grounded,  for  if  Ships  were  restrained  from  being  built  in  those 
American  Parts,  what  an  immense  Quantity  of  Cash  would  go  out 
of  this  Kingdom,  to  purchase  Ships  as  well  as  Materials  for  Building, 
at  Norway  and  other  foreign  countries,  since  it  is  a  received  Opinion 
that  there  is  not  Timber  enough  in  England,  at  a  convenient  Distance, 
to  answer  the  Demands  of  the  British  Navigation,  without  great 
Prejudice  to  his  Majesty's  Navy.  And  what  a  Stagnation  would 
there  be  to  the  Vent  of  almost  all  Sorts  of  British  Produce  and  Manu- 
factures, which  now  go  to  those  American  colonies,  to  build  ships,  and 
to  carry  on  the  many  branches  of  Trade  that  arise  from  our  Planta- 
tions, and  bring  home  to  Great  Britain  such  vast  Quantities  of  Sugar, 
Tobacco,  Shipping,  Naval  Stores,  Rice,  Rum,  Furs  and  Train-Oil^ 
besides  Ginger,  Cotton,  Indigo,  Piemento,  Cocoa,  Coffee,  Aloes;. 
Dying- Wood,  and  other  American  Products?  And  by  a  Circulation 
of  Trade  a  considerable  Balance  is  thereby  brought  home  to  the  na- 

1  Memoirs  and  Considerations  concerning  the  Trade  and  Revenues  of  the  British 
Colonies  in  America.  By  John  Ashley  (London,  1740),  22-25,  passim.  '  - 


ENGLISH  COLONIAL  THEORY  AND   POLICY  131 

tional  Stock  from  several  Countries  of  Europe,  whereby  we  received 
no  small  share  of  the  Products  of  the  Mines  of  Brazil,  Peru  and 
Mexico:  The  flourishing  State  of  this  grand  Commerce,  and  the 
Revenues  arising  therefrom,  are  in  no  small  degree  owing  to  a  low 
freight,  occasioned  chiefly  from  our  building  Ships  so  cheap  in  our 
American  Plantations.  .  .  . 

The  Northern  Colonies  are  a  great  Support  to  the  naval  Power  of 
Great  Britain,  and  assist  in  great  Measure  in  giving  us  a  Superiority 
at  Sea  over  all  other  Nations  in  the  World:  They  add  largely  to 
our  Trade  and  Navigation  the  Nursery  of  Seamen;  the  Indulgence 
given  them  by  granting  a  bounty  upon  the  importation  of  Pitch,  Tar 
and  Turpentine,  has  answered  the  intention  as  they  have  thereby 
brought  the  Prices  of  those  Commodities  from  upwards  of  503.  per 
Barrel,  down  to  los.  per  Barrel  and  under;  which  is  attended  with 
this  further  Convenience,  that  it  aids  them  in  making  Returns  for 
the  immense  Quantity  of  Goods  that  are  exported  from  Great  Britain 
to  those  Colonies,  and  it  also  prevents  five  times  the  Value  thereof 
from  going  out  of  the  Kingdom  in  Cash  to  Sweden,  and  other  Foreign 
Countries.  And  they  also  supply  the  King's  Yards  with  great 
Quantities  of  Masts,  Yards  and  Bowsprits,  instead  of  those  of  foreign 
Growth,  and  may  in  Time,  with  proper  Encouragement,  do  the  like 
in  regard  to  Hemp  and  Iron,  and  even  with  this  further  Advantage, 
that  British  Produce  and  Manufactures  will  purchase  what  is  of  the 
Produce  of  our  own  Plantations,  and  Cash  chiefly  must  go  to  purchase 
what  is  of  the  Produce  of  foreign  Countries. 

D.    The  Colonies  a  Source  of  Raw  Materials,  1775  v 

Throughout  the  seventeenth  and  the  first  half  of  the  eighteenth  centuries  the 
colonies  were  esteemed  by  England  chiefly  as  sources  of  raw  materials  and  commodi- 
ties not  produced  at  home.  As  long  as  this  point  of  view  prevailed  the  West  Indies 
and  the  southern  colonies  in  North  America  were  valued  more  highly  than  the 
northern  colonies,  since  they  were  in  a  different  climatic  zone  than  England  and 
thus  yielded  products  which  were  in  demand  there.  This  view  finds  constant  ex- 
pression in  the  pages  of  American  Husbandry,  though  by  the  time  it  was  published 
a  different  theory  had  begun  to  control  colonial  policy. 

It  may  not  be  improper  here  to  review  the  staples  of  these  colonies, 
the  southern  ones,  and  the  islands,  as  they  all  unite  in  the  circum- 
stance of  having  such  valuable  staples  as  render  them  in  every  respect 
highly  valuable  to  Great  Britain,  and  more  so  than  other  settlements 
more  to  the  north  can  prove.  The  commodities  chiefly  produced  in 

1  American  Husbandry.     By  an  American  (London,  1775),  II,  231-4,  passim. 


132  READINGS  IN  ECONOMIC  HISTORY 

all  our  settlements,  from  Maryland  to  Grenada,  are  such  as  we  cannot 
have  at  home,  of  which  we  consume  great  quantities,  which  must  be 
purchased  of  foreigners,  and  perhaps  of  enemies,  if  we  had  not  colonies 
that  produced  them.  ...  A  late  writer  from  whom  however  I  have 
had  reason  in  the  preceding  pages  to  differ  in  certain  articles,  gives 
the  following  table  of  the  tobacco  and  southern  colonies. 


Virginia  and  Maryland.  .  .  , 

Exports  from    1 
Britain 
[£]865,ooo     [ 

Exports  from 
Colonies 
£]i,  040,000 

North  Carolina  

18,000 

68,110 

South  Carolina  

361,000 

30  1,666 

Georgia  

49,000 

74,200 

St.  Augustine  

7,000 

Pensacola  

97,000 

63,000 

West  Indies  * 

1  1,401,000 

1,641,216 
2,702,060 

4,343,276 

....  These  therefore  are  colonies  that  it  much  behoves  this 
country  to  give  every  degree  of  encouragement  to  that  it  is  possible 
they  should  receive;  for  by  encouraging  them,  she  in  fact  encourages 
herself.  .  .  . 

E.   The  Colonies  as  a  Market  for  British  Manufactures,  1755 3 

About  the  middle  of  the  eighteenth  century  the  doctrine  began  to  gain  ground 
that  the  colonies  were  to  be  esteemed  chiefly  as  markets  for  English  manufactures. 
England  was  already  entering  upon  the  industrial  development  which  was  shortly 
to  culminate  in  the  industrial  revolution.  From  this  point  of  view  the  colonies 
most  to  be  esteemed  were  the  northern  continental  ones,  which  were  growing  much 
more  rapidly  in  population  and  consuming  power  than  the  West  Indies  or  the 
southern  colonies.  This  is  the  point  brought  out  by  Clarke.  He  was  a  physician 
in  Boston. 

The  Advantage  accruing  to  the  Mother-Country  from  the  great 
Number  of  Inhabitants  in  her  Northern  Colonies,  will  appear  from  the 
Consideration  of  the  Consumption  they  will  occasion  of  British 
Manufactures,  and  also  of  all  other  European  Commodities  in  general, 
which  last  must  be  landed  and  re-shipped  in  Great-Britain  (which 
is  by  the  Acts  of  Trade  made  the  Staple  of  them  for  all  the  English 
Colonies)  before  they  can  be  imported  into  America. 

1  American  Traveller.  2  Political  Essays. 

3  Observations  on  the  Late  and  Present  Conduct  of  the  French,  with  Regard  to  their 
Encroachments  upon  the  British  Colonies  in  North  America.  By  William  Clarke 
(Boston,  1 755),  33-4. 


ENGLISH   COLONIAL  THEORY  AND   POLICY 


133 


I  shall  not  enter  into  a  Detail  of  the  European  Commodities 
which  are  consumed  within  the  Colonies,  or  a  Computation  of  what 
Number  of  Hands  their  present  Inhabitants  may  employ  in  England, 
for  furnishing  them  with  the  British  ones:  Extracts  from  the  Custom- 
house Books  of  the  Goods  exported  for  the  Colonies,  have  shewn  them 
to  be  very  large  at  present;  what  is  exported  for  New-England  only 
amounting  to  Four  Hundred  Thousand  Pounds  Sterling  per  Ann. 
and  the  future  Vent  of  them  continually  increasing  in  Proportion  to 
the  Growth  of  its  Inhabitants,  must  of  itself  in  Time  become  a  more 
considerable  Trade,  and  of  a  more  beneficial  Nature  in  every  Respect 
to  Great-Britain,  than  all  its  Branches  of  Commerce  with  foreign 
States  put  together.  It  is  computed  that  near  Half  the  present 
Shipping  of  Great-Britain  is  improved  in  the  Commerce  carried  on 
with  her  Plantations,  which  Trade  alone  will  in  Time  employ  a  much 
greater  Quantity  of  Shipping,  than  all  the  present  Shipping  of  Great- 
Britain.  Besides,  this  Trade  will  enable  her  with  greater  Advantage 
to  extend  her  Commerce  with  other  Countries. 


F.  Trade  between  England  and  Her  North  American  Colonies,  1700-1780 l 

Though  compiled  to  show  something  else  the  following  table  illustrates  the  rea- 
son for  the  changed  attitude  of  England  toward  the  colonies  as  stated  in  the  two 
previous  selections.  It  will  be  noticed  that  down  to  1740  England  had  imported 
more  from  the  colonies  every  decade  than  she  had  exported  to  them;  in  other 
words  they  were  valuable  as  sources  of  supplies  which  England  desired.  On  the 
other  hand  in  every  decade  after  1 740  the  exports  to  the  colonies  exceed  the  imports 
from  them,  and  in  a  rapidly  increasing  proportion;  in  other  words  the  colonies 
are  becoming  increasingly  valuable  as  markets  for  British  manufactures. 


Imports  from 


that  part  of  America  now 

UNITED     STATES 


Exports  to 


Average 

£ 

s. 

d. 

£ 

s. 

d. 

from  1700  to  1710 

265783 

o 

10 

267205 

3 

4 

1710 

1720 

392653 

17 

ii 

365645 

7 

"I 

1720 

1730 

518830 

16 

6 

471342 

12 

10^ 

1730 

1740 

670128 

16 

o| 

660136 

II 

ij 

1740 

175° 

708943 

9 

6J 

812647 

13 

oj 

1750 

1760 

802691 

6 

10 

I5774I9 

16 

2j 

1760 

1770 

1044591 

17 

o 

1763409 

IO 

3 

1770    1780 

74356o 

10 

IO 

1331206 

I 

5 

1  Observations  on  the  Commerce  of  the  American  States. 
(26.  edition,  London,  1784),  Appendix,  24. 


By  Lord  John  Sheffield 


I34  READINGS  IN  ECONOMIC  HISTORY 

IV.  WORKINGS  or  THE  COLONIAL  POLICY  IN  THE  COLONIES 

A.   Arguments  for  and  against  the  Molasses  Act,  1731 l 

In  order  to  protect  the  sugar  planters  in  the  British  West  Indies,  it  was  pro- 
posed in  Parliament  in  1731  to  prohibit  the  importation  of  sugar,  rum,  or  molasses 
into  England  or  her  American  colonies  from  the  French,  Dutch,  or  Spanish  West 
Indies.  As  these  articles  could  be  had  more  cheaply  in  the  foreign  islands  than  in 
the  British  ones,  a  very  lucrative  trade  had  sprung  up  between  these  islands  and  the 
British  American  colonies,  which  was  of  great  benefit  to  both  parties.  The  argu- 
ments that  preceded  the  passage  of  the  so-called  Molasses  Act,  which  in  1733 
placed  heavy  duties  upon  this  trade,  are  here  briefly  given. 

The  merchants  trading  to  the  British  sugar  colonies  and  the 
planters,  having  petitioned  the  House  of  Commons,  "complaining 
against  the  British  Continent  American  Colonies,  for  their  carrying 
on  a  trade  with  the  foreign  sugar  colonies  of  the  French  and  Dutch, 
from  whence  they  were  supplied  with  sugar,  rum,  melasses,  &c.  in- 
stead of  those  of  our  own  sugar  colonies,  as  well  as  with  foreign 
European  goods  and  manufactures;  contrary  to  the  tenor  or  in  ten' 
tion  of  the  laws  in  being,  and  of  the  treaty  with  France,  in  the  year 
1686;"  (of  which  see  our  abstract  under  that  year)  "And  they  al- 
leged, that  as  this  new  method  of  trade"  (first  begun  to  be  com- 
plained of  in  the  year  1715)  "increased,  and  enriched  the  colonies  of 
other  nations,  so  that  it  was  injurious  to  the  trade  of  this  kingdom, 
and  greatly  impoverished  the  British  sugar  colonies;  and  therefore 
praying  relief  therein."  Whereupon  a  committee  was  appointed, 
upon  whose  report  a  bill  was  brought  in,  and  passed  the  House  of 
Commons,  "  For  the  better  securing  and  encouraging  the  Trade  of  his 
Majesty's  Sugar  Colonies.".  .  . 

Section  I,  "No  sugar,  rum,  or  melasses,  of  the  plantations  of 
foreign  nations,  shall  be  imported  into  Britain  or  Ireland,  or  to  any 
of  the  King's  dominions  in  America,  under  forfeiture  of  lading,  ship 
and  furniture."  .  .  . 

Let  us  next,  as  briefly  as  possible,  hear  the  allegations  on  both 
sides  for  and  against  this  bill.  In  support  of  the  bill,  it  was  urged, 
both  within  doors  and  in  several  pamphlets  and  newspapers,  "That 
the  supplying  the  French  and  Dutch  sugar  colonies,  with  shipping, 
often  sold  to  them,  as  also  provisions,  horses,  and  lumber,  from  our 
continent  colonies,  had  been  practiced  ever  since  the  peace  of  Utrecht; 
and  that  the  so  doing,  not  only  made  those  necessary  commodities 

1  An  Historical  and  Chronological  Deduction  of  the  Origin  of  Commerce.  By 
Adam  Anderson  (London,  1787),  III,  177-82. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  135 

cheaper  to  them  than  they  could  have  them  any  where  else,  but  it 
also  obliged  the  importers  to  take  in  payment  great  quantities  of  the 
said  French  and  Dutch  sugars,  rum,  and  melasses,  to  the  infinite 
detriment  of  the  British  sugar  colonies:  and,  what  is  still  more  grievous 
and  detrimental  to  the  public,  that  intercourse  affords  our  Northern 
continental  colonies  an  opportunity  of  being  supplied  with  French 
European  merchandize,  although  prohibited  by  law.  .  .  . 

"4.  That  for  the  encouragement  of  the  said  continental  colonies 
to  persist  in  the  said  trade,  they  have  the  rum  and  melasses  from  those 
foreign  colonies  without  the  high  duties  paid  for  them  when  imported 
into  Britain;  —  that  melasses  was  formerly  of  little  or  no  value  to 
the  French  planter,  because  rum  was  detrimental  to  France,  as  inter- 
fering with  the  consumption  of  their  brandy,  until  the  French  found 
they  could  sell  it  to  our  continental  people,  in  return  for  timber,  horses, 
oxen,  and  provisions,  so  needful  for  them;  whereby  also  they  saved 
so  much  money  in  specie;  —  and  that  even  the  money  which  they 
receive  at  our  own  sugar  islands,  in  payment  for  their  lumber,  pro- 
visions, horses,  &c.  is  now  carried  to  the  French  sugar  islands  for  the 
purchase  of  their  melasses  and  rum.  Near  one-half  of  the  goods 
which  our  continental  people  now  carry  to  our  own  sugar  islands,  be- 
ing paid  for  in  money,  and  not  by  barter,  as  formerly;  whereby  the 
French  are  enabled  to  increase  their  settlements,  and  also  their  negro 
trade.  .  .  . 

On  the  other  hand, 

It  was  insisted,  in  behalf  of  the  British  northern  continent  colonies 
of  America,  viz.  New  England,  Rhode  Island,  New  York,  Pennsyl- 
vania, and  the  Jerseys, 

"I.  That  as  all  the  sugar,  rum,  and  melasses  of  our  sugar  isles  are 
taken  off  at  high  prices  by  Great  Britain  and  our  said  northern  colo- 
nies; it  would  be  very  impolitic  to  obstruct  the  latter  from  taking 
melasses,  and  even  rum,  from  the  French  islands,  for  the  supply  of 
their  Indian  trade,  and  much  more  of  their  fisheries :  as  our  own  sugar 
colonies  are  unable  to  supply  the  immense  quantities  of  melasses 
which  those  two  trades  demand;  more  especially  as  from  the  French 
islands  they  receive  in  payment  silver  and  cocoa,  as  well  as  melasses, 
(but  seldom  sugar  or  rum)  which  silver  comes  ultimately  to  Great 
Britain  to  pay  for  the  balance  of  trade:  and  the  said  northern  colo- 
nies distil  the  melasses  into  rum,  for  the  above-named  purposes. 

"II.  That  by  this  trade  the  northern  colonies  are  enabled  to  make 
such  considerable  remittances  to. England,  in  ready  money,  as  they 
could  procure  no  where  else  but  by  their  traffic  with  the  foreign  colo- 


136  READINGS  IN  ECONOMIC  HISTORY 

nies,  as  well  as  by  indigo,  cocoa,  sugar,  and  rum,  both  from  British 
and  foreign  colonies,  for  enabling  them  to  pay  for  the  great  quantities 
of  our  manufactures  which  they  yearly  take  of  us.  ... 

"VI.  That  the  consumption  of  rum  in  New  England  is  so  great, 
that  an  author  on  this  subject  asserts,  that  there  had  been  twenty 
thousand  hogsheads  of  French  melasses  manufactured  into  Rum, 
at  Boston,  in  one  year:  and  as  a  gallon  of  melasses  will  make  a  gallon 
of  rum,  this  will  amount  to  one  million  two  hundred  and  sixty  thou- 
sand gallons  of  rum  in  one  year:  so  vast  is  the  demand  for  that  liquor, 
by  their  fishery,  and  by  the  Indian  trade.  If  then,  the  trade  from 
New  England  to  the  French  islands  was  to  be  prohibited,  how  much 
would  our  American  fishery,  and  the  Indian  trade  suffer  for  want  of 
rum?  Seeing  that  all  the  rum  from  our  own  sugar  colonies  is  now 
entirely  taken  off  by  Great  Britain  and  her  colonies.  .  .  . 

"Lastly,  that  the  prohibiting  the  continental  people  from  pur- 
chasing of  the  foreign  colonies  their  sugar,  rum,  and  melasses,  or  even 
laying  high  duties  on  them,  would  utterly  destroy  a  commerce  of  such 
great  consequence  to  the  northern  colonies,  as  that  without  it  they  could 
not  carry  on  their  fisheries,  —  their  trade  for  peltry  with  the  Indians, 
and  then-  navigation.  Neither  could  they  dispose  of  the  product  of 
their  lands  and  labour,  a  great  part  of  the  profits  whereof  centers  in 
Great  Britain,  in  payment  of  the  manufactures,  &c.  they  have  from 
thence.  Upon  the  whole,"  say  the  advocates  for  the  Northern  British 
colonies,  "the  secret  and  real  view  of  the  Sugar  Islands,  is,  to  gain 
the  absolute  monopoly  of  sugar  and  rum,  with  respect  to  the  subjects 
of  Great  Britain,  to  themselves;  that  so  they  may  have  it  in  their 
power  to  exact  what  prices  they  shall  please  from  the  buyers." 

Notwithstanding  all  which  plausible  allegations  on  both  sides,  in 
a  matter  of  great  importance  to  our  commercial  interests,  there  was 
nothing  legally  decided  until  two  years  later,  viz.  till  the  year  1733. 

B.   Ineffectiveness  of  the  Molasses  Act,  1740 1 

As  finally  passed,  the  Molasses  Act  did  not  prohibit  the  trade  between  the  for- 
eign West  Indies  and  the  British  American  colonies  in  sugar,  rum,  and  molasses, 
but  it  placed  very  heavy  duties  upon  their  importation.  If  these  duties  had  been 
collected  this  trade  would  have  been  destroyed,  but  under  the  policy  of  "salutary 
neglect"  that  prevailed  the  law  became  practically  a  dead  letter  until  1764. 

The  British  Legislature  willing  to  support  and  encourage  his 
Majesty's  Plantations  in  America,  and  particularly  the  Sugar  Islands, 

1  Memoirs  and  Considerations  concerning  the  Trade  and  Revenues  of  the  British 
Colonies  in  America.  By  John  Ashley  (London,  1 740),  35-40,  passim. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  137 

have  thought  fit  to  charge  all  foreign  Sugar,  Penneles,1  Rum,  Spirits, 
Molasses  and  Syrups,  imported  into  Great  Britain,  with  certain  Duties 
which  are  abundantly  higher  than  the  Duties  upon  the  like  Species 
of  British  Growth. 

By  an  Act  pass'd  in  the  6th  Year  of  King  Geo.  II.  cap.  13.  CI733H 
all  these  Commodities  are  prohibited  from  being  imported  into  Ireland, 
and  a  Duty  of  five  Shillings  per  Hundred  is  laid  on  Sugar  or  Penneles, 
nine  Pence  per  Gallon  on  Rum  or  Spirits,  and  six  Pence  per  Gallon 
on  Molasses  and  Syrups  of  the  Product  of  any  Plantation  in  America, 
not  in  the  Possession  of  his  Majesty,  imported  into  any  of  the  British 
Plantations  in  America,  .  .  . 

NOTWITHSTANDING  these  good  and  wholesome  Laws  for 
encouraging  the  British  Sugar  Colonies,  and  discouraging  those  of 
Foreigners,  it  is  well  known  that  they  are  notoriously  evaded,  and 
great  Quantities  of  foreign  Sugar,  Rum,  and  Molasses  are  clandestinely 
imported  for  a  British  Consumption,  without  paying  more  Duties 
than  the  British  Subject,  and  in  some  Instances  without  paying  any 
Duties  at  all.  .  .  . 

THE  high  Duty  of  six  Pence  per  Gallon  Sterling  on  foreign  Mo- 
lasses imported  into  the  British  Colonies,  and  the  small  Number  of 
Officers  on  the  extensive  Shores  of  the  Northern  Provinces,  for  want 
of  a  Fund  to  pay  Salaries  to  proper  Officers,  obstructs  the  Intention  of 
that  Part  of  the  said  Act,  passed  in  the  6th  Year  of  the  Reign  of  King 
George  II  [[17333,  for  the  better  securing  and  encouraging  the  Trade 
of  his  Majesty's  Sugar  Colonies  in  America,  since  there  is  as  much 
foreign  Molasses  imported  into  those  Northern  Colonies  as  there  was 
before  the  passing  of  that  Act,  which  cannot  amount  to  less  than 
10,000  Hogsheads,  or  1,000,000  of  Gallons  per  Annum,  and  little  or 
no  Duties  have  been  paid  by  virtue  of  that  Act,  notwithstanding  the 
several  Precautions  before  mentioned.  And  considerable  Quantities 
of  foreign  Sugar  and  Rum  are  also  frequently  imported  into  those 
Northern  Provinces  without  paying  any  Duties  at  all. 

C.   Smuggling  in  the  Colonies,  1757  2 

It  was  inevitable  that  efforts  should  be  made  by  the  colonists  to  evade  the 
navigation  acts  when  these  interfered  with  a  profitable  branch  of  trade,  and  as  a 

1  A  coarse  sort  of  sugar  made  from  molasses. 

2  Report   of  Sir  Charles  Hardy  to  the  Lords  of  Trade  (1757).     In  Documents 
relating  to  the  Colonial  History  of  New  York.     Edited  by  E.  B.  O'Callaghan 
(Albany,  1856),  VII,  271. 


138  READINGS  IN  ECONOMIC  HISTORY 

matter  cf  fact  a  great  deal  of  illegal  trade  was  carried  on  down  to  the  very  time  of 
the  Revolution.  The  following  letter  from  Sir  Charles  Hardy,  former  governor 
of  New  York,  to  the  Lords  of  Trade,  shows  something  of  the  extent  of  this  trade. 

Halifax,  ioth  July  1757 
My  Lords, 

...  As  I  have  now  taken  leave  of  the  Province  of  New  York  as 
Governor  ...  I  trust  I  shall  stand  excused  to  you  in  offering  my 
thoughts  upon  two  Subjects:  in  the  first  the  mother  country  is  greatly 
Interested  with  regard  to  its  trade  with  the  Colonys  which  I  have 
used  all  my  endeavours  to  restrain  and  put  upon  a  proper  footing,  and 
tho  I  have  not  been  able  to  do  it  so  effectually  as  I  could  wish,  yet  I 
flatter  myself  some  good  has  attended  it,  and  I  am  sure  greater  will 
follow  by  your  Lordships'  Interposition  with  the  Treasury  and  Custom 
House  Boards:  I  mean  the  introducing  tea,  canvas,  Gunpowder  and 
arms  for  the  Indians  and  many  other  Articles  from  Holland  that  render 
to  His  Majesty  no  Dutys  in  Europe,  and  almost  totally  discourage  the 
Importation  of  these  commoditys  from  Brittain.  When  I  first  arrived 
at  New  York  I  found  this  iniquitous  trade  in  a  very  flourishing  state, 
and  upon  inquiry  was  informed  that  it  had  been  a  common  practice 
for  Vessels  to  come  from  Holland,  stop  at  Sandy  Hook,  and  smuggle 
their  Cargoes  to  New  York  and  carry  their  Vessels  up  empty;  this 
I  was  determined  to  put  an  end  to,  when  this  Trade  took  another  course 
by  sending  their  Vessells  to  the  Ports  of  Connecticutt,  from  whence 
it  is  not  very  difficult  to  introduce  their  goods  thro  the  sound  to  New 
York,  and  even  to  Philadelphia;  I  acquainted  Governor  Fitch  with 
some  informations  I  had  obtained  of  this  practice,  and  requested  him 
to  direct  the  Custom  House  Officers  of  his  Colony  to  do  their  duty, 
assuring  him  I  would  direct  the  King's  Officers  in  my  Province  to 
seize  any  goods  they  could  find  Any  Body  attempting  to  introduce 
into  my  Government;  I  believe  some  small  seizures  was  made  in 
Connecticutt  upon  it,  but  much  more  in  the  Province  of  New  York. 
Another  method  the  Importers  take  is  to  stop  at  some  of  the  Out 
ports  of  Britain  (in  their  outward  bound  passage  from  Holland)  and 
make  a  report  and  enter  only  half  of  their  cargo,  by  which  the  King 
is  defrauded  of  his  Duty  on  the  other  half;  In  short  My  Lords,  if 
some  effectual  means  are  not  used,  the  greatest  part  of  the  commerce 
of  the  American  Colonies  will  be  withdrawn  from  the  Mother  Country, 
and  be  carryed  to  Holland. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  139 

D.   An  Act  to  Prevent  Iron  Manufactures  in  the  Colonies,  IJIQ  l 

The  determination  to  crush  out  manufactures  in  the  colonies  in  order  to  reserve 
them  as  a  market  for  English  goods  showed  itself  early  in  the  colonial  policy,  as 
shown  in  the  proposed  legislation  of  1719.  The  project  was  revived  again  about 
twenty  years  later,  but  not  until  1750  did  the  agitation  result  in  legislative  action. 
In  this  year  an  act  was  passed  allowing  the  free  importation  into  England  of  colonial 
pig-iron,  and  of  bar-iron  at  the  port  of  London,  but  prohibiting  iron  manufactures 
in  the  colonies.  By  this  time  the  colonies  were  sufficiently  developed  to  undertake 
simple  manufactures,  and  this  act  caused  irritation  against  the  colonial  policy  of 
England. 

In  this  same  year  1719,  a  bill  was  brought  into  Parliament,  For 
rendering  the  laws  concerning  the  importation  of  naval  stores  from 
the  British  American  plantations  more  extensive,  by  extending  it  to 
all  sorts  of  timber  from  thence.  .  .  .  But  the  people  of  the  northern 
colonies  were  so  surprised  and  disappointed,  on  account  of  certain 
clauses  put  into  that  bill,  that,  rather  than  they  should  stand  part  of 
it,  they  were  very  glad  to  have  it  dropped  altogether.  Such,  for 
instance,  as 

"That  none  in  the  plantations  should  manufacture  iron  wares 
of  any  kind  whatever,  out  of  any  sows,  pigs,  or  bars  whatsoever; 
under  certain  penalties :"- By  which  clause,  says  an  ingenious 
author,  on  this  occasion,  in  behalf  of  the  colonies,  no  smith  in  the 
plantations  might  make  so  much  as  a  bolt,  spike,  or  nail;  whereby 
the  colonies  must  have  been  brought  into  a  miserable  condition;  the 
smith  being,  above  all  other  trades,  absolutely  necessary  in  all  other 
employments  there.  Amongst  the  rest,  that  of  ship-building  would 
have  hereby  been  utterly  destroyed,  although  by  that  article  they 
make  a  great  part  of  their  returns  for  the  purchase  of  British  manu- 
factures. 

The  House  of  Peers  added  another  clause,  "That  no  forge  going 
by  water  or  other  work  whatsoever,  should  be  erected  in  any  of  the 
said  plantations,  for  the  making,  working,  or  converting  of  any  sows, 
pigs,  or  cast-iron,  into  bar  or  rod-iron,  upon  pain,  &c."  -  This  second 
clause,  says  our  said  author,  must  have  ruined  all  the  iron-works  in 
the  colonies,  to  the  great  loss  of  their  proprietors,  and  have  given 
the  French  a  fair  handle  to  tempt  them  into  their  settlements  which 
join  to  ours. 

The  chief  opposers  of  the  manufacture  of  iron  in  our  American 
plantations,  were  the  proprietors  of  our  iron- works  at  home :  .  .  . 

1  An  Historical  and  Chronological  Deduction  of  the  Origin  of  Commerce.  By 
Adam  Anderson  (London,  1789),  III,  88. 


I4o  READINGS  IN  ECONOMIC  HISTORY 

E.   Colonies  Levy  Tariff  Duties  on  British  Goods,  1718  l 

The  acts  cited  below  were  disallowed  by  the  English  government,  but  the  fact 
that  they  were  passed  shows  a  striking  disregard  for  the  British  acts  of  trade  and  a 
strong  desire  on  the  part  of  the  colonies  to  regulate  their  trade  in  their  own  way. 
There  were  many  similar  acts  passed  by  the  colonial  legislatures  of  which  these  are 
typical. 

Having  received  from  the  Commissioners  of  your  Majestys  Cus- 
toms the  Extract  of  a  Letter  to  them  from  Colonel  Rhett  Surveyor 
and  Comptroller  of  the  Customs  in  Carolina,  dated  in  December 
last  .  .  .  whereby  it  appears  that  an  act  was  then  passed  in  that  prov- 
ince of  a  pernicious  Consequence  to  the  Trade  and  Navigation  of  this 
Kingdome  laying  a  Duty  of  10  per  Cent,  upon  all  Goods  of  British 
Manufactory,  imported  into  that  Province  from  Great  Britaine.  .  . 
Yet,  considering  the  ill  consequence  of  such  an  Act,  .  .  .  Wee  most 
humbly  Offer  that  your  Majesty's  Pleasure  be  Signifyed  to  the  Lords 
Proprietors  of  Carolina,  that  they  immediately  send  over  to  that 
province  their  Disallowance  of  the  Same,  with  directions  to  their 
Governor  there,  never  to  Give  His  Assent  to  any  Law  of  the  like 
Nature,  for  the  future. 

Wee  humbly  take  leave  to  represent  to  your  Majesty.  —  That 
by  the  Act  of  Trade  15°  Caroli  2di.  [1663]  No  Goods  of  the  Growth 
or  Manufacture  of  Europe  can  be  imported  into  any  of  the  plantations 
but  from  Great  Britain,  excepting  Salt  for  the  Fisherys,  Wines  of 
the  Madera  and  Western  Islands,  Servants  Horses  and  Provisions 
from  Ireland,  and  also  except  Irish  Linnen  from  Ireland  by  the  Act, 
the  3°  and  4°  Annae;  Whereas  this  Act  of  the  Massachusetts  Bay,  not 
only  Allows  the  importation  of  All  Sorts  of  Wines  and  Commoditys 
directly  from  the  place  of  their  Growth,  but  charges  the  said  Commod- 
itys with  a  double  duty,  if  Imported  from  this  Kingdom,  from  whence 
only  they  can  legally  be  imported,  except  in  the  cases  above-men- 
tioned, besides  that  there  are  no  Words  to  Restrain  the  Importation 
of  such  Goods  into  that  Plantation  to  Such  Ships  only  as  by  Law  may 
trade  thither:  —  This  Act  likewise  lays  a  duty  of  one  per  Cent,  on 
all  English  Merchandizes  when  at  the  same  time  it  lays  not  half  that 
duty  on  any  other  Goods,  and  Merchandize,  and  as  a  farther  dis- 
couragement to  the  British  Trade  and  Navigation,  lays  a  Duty  of 
Tonnage  on  all  Shipping  except  that  of  the  Massachusetts  Bay,  and 
of  some  few  of  its  neighbouring  Colonies:  .  .  . 

1  Acts  of  the  Privy  Council,  Colonial  Series,  (London,  1908)  II,  740,  selection 
1294;  759,  selection  1315. 


ENGLISH  COLONIAL  THEORY  AND   POLICY  141 

F.    Tobacco  Growing  Suppressed  in  England,  1619-1670  l 

While  most  attention  has  been  given  to  restrictions  imposed  upon  colonial 
development  by  the  acts  of  trade,  it  must  be  remembered  that  along  with  the  policy 
of  restriction  there  went  also  the  policy  of  encouragement.  Perhaps  no  more  strik- 
ing illustration  of  this  can  be  given  than  the  legislation  relative  to  the  growing  of 
tobacco  in  England.  In  order  to  encourage  its  production  in  the  colonies,  and  also 
to  render  the  administration  of  the  customs  duties  easier,  its  growth  was  rigidly 
suppressed  in  England,  until  at  last  it  was  absolutely  stamped  out.  While 
colonial  tobacco  could  be  exported  only  to  England,  at  least  it  was  protected 
there  from  English  competition. 

Whitehall,  3  September  [1626]:  ... 

A  warrant  directed  to  Henry  Somerscales,  gentleman  of  the  County 
of  Nottingham  or  to  his  Deputie.  These  are  to  will  and  comande  you 
to  make  your  presente  and  undelayed  repaire  unto  the  house  or  houses 
of  all  such  persons  within  the  Countyes  of  Buckingham  Lincolne  and 
Yorke,  or  any  other  County  Cittie  or  Towne  within  the  Realme  of 
England  onely  the  Citties  of  London  and  Westminster  or  the  Suburbs 
thereof  excepted  as  you  shall  either  knowe,  or  be  probably  informed, 
to  receive,  conceale,  kepe,  now  sell,  or  have  in  their  custodie  anie 
Tobacco  of  the  English  growth  or  making,  or  anie  Spanish  or  foreigne 
growth  or  making,  or  anie  Spanish  or  foreigne  Tobacco,  except  onely 
such  as  is  of  the  growth  of  the  English  Plantations  in  foreigne  parts 
rjAll  such  tobacco  is  to  be  seized  and  a  bond  of  £100  apiece  to  be  taken 
of  its  possessors  to  appear  before  the  Board  to  answer  for  their  high 
contempt} 

Whitehall,  21  December  [1627]:  .    .    . 

This  day  the  Boord,  in  the  presence  of  his  Majestic  and  by  his 
speciall  direction,  takeing  into  their  considerations,  the  english  plan- 
tations in  Virginia,  and  the  Sommer  Islands  especially,  and  con- 
sideringe  that  for  the  present  they  cannot  subsist,  but  by  the  vent 
of  their  Tobacco  planted  there,  and  from  thence  transported  heather, 
haue  thought  fitt  and  soe  resolued  and  ordered:  That  for  the  preserva- 
tion and  incouragement  of  those  English  plantations  abroad,  no 
Tobacco  shalbe  planted  either  in  England,  or  Ireland,  or  any  the 
Islands  thereto  belonginge,  nor  any  such  Tobaco  shall  be  brought: 
or  sold,  vttered  or  vsed,  by  any  but  shalbe  vtterly  destroyed,  and 
consumed  wheresoeuer  it  shalbe  found  either  simply,  or  mixt,  with 
any  other  Tobacco;  .  .  .  and  no  Spanish  Tobacco,  or  other  Tobacco, 

1  Acts  of  the  Privy  Council,  Colonial  Series  (London,  1908),  I,  109-10,  120-1. 


i42  READINGS  IN  ECONOMIC  HISTORY 

of  the  growth  of  any  of  the  King  of  Spaines  Dominions  shall  be  im- 
ported into  this  Realme,  other  then  such  as  shalbe  imported  by  his 
Majesties  Agents  only,  and  only  for  his  Majesties  vse.  .  .  . 

G.   Bounties  on  Colonial  Products,  1764  1 

While  regulating  the  trade  and  suppressing  the  manufactures  of  the  colonies, 
the  English  government  encouraged  by  a  system  of  bounties  the  production  of  cer- 
tain articles  that  were  desired  in  England.  The  production  of  indigo,  hemp,  flax, 
timber,  naval  stores,  and  similar  commodities  were  stimulated  in  this  manner. 
As  an  illustration  the  bounty  granted  on  hemp  is  here  described. 

In  order  to  obtain  a  cheaper  and  surer  supply  of  hemp  and  flax, 
and  to  encourage  the  production  of  it  in  the  American  colonies,  the 
parliament  granted  a  bounty  of  £8  on  every  tun  of  clean  merchantable 
hemp,  or  rough  flax,  imported  from  the  British  American  colonies 
from  24th  June  1764  to  24th  June  1771,  and  thence  to  24th  June  1778  a 
bounty  of  £6,  and  thereafter  to  24th  June  1785  of  £4;  the  pre-emption 
of  all  such  hemp  and  flax  being  offered  to  the  commissioners  of  the 
navy,  and  twenty  days  being  allowed  for  their  determination  before 
the  importer  could  be  at  liberty  to  sell  it  to  a  private  buyer. 


1  Annals  of  Commerce,  Manufactures,  Fisheries,  and  Navigation.     By  David 
Macpherson  (London,  1805),  III,  400. 


CHAPTER    V 

ECONOMIC  CAUSES  AND  CONDUCT  OF   THE 
REVOLUTION,   1764-1783 

I.  ECONOMIC  CAUSES  or  THE  REVOLUTION 
A.   Fear  of  French  Kept  Colonies  Loyal,  1748  l 

An  extraordinarily  accurate  prophecy  of  the  future  course  of  events  was  made 
by  Kalm  as  early  as  1748,  in  which  he  foretold  the  independence  of  the  colonies  in 
from  "thirty  or  fifty  years"  (i.e.  1778-1798),  if  the  fear  of  French  attack  were 
removed. 

It  is  however  of  great  advantage  to  the  crown  of  England  that  the 
North  American  colonies  are  near  a  country  under  the  government  of 
the  French,  like  Canada.  There  is  reason  to  believe  that  the  King 
never  was  earnest  in  his  attempts  to  expel  the  French  from  their  pos- 
sessions there;  though  it  might  have  been  done  with  little  difficulty: 
for  the  English  colonies  in  this  part  of  the  world  have  increased  so 
much  in  their  number  of  inhabitants,  and  in  their  riches,  that  they 
almost  vie  with  Old  England.  Now  in  order  to  keep  up  the  authority 
and  trade  of  their  mother  country,  and  to  answer  several  other  pur- 
poses, they  are  forbid  to  establish  new  manufactures,  which  would 
turn  to  the  disadvantage  of  the  British  commerce:  they  are  not 
allowed  to  dig  for  any  gold  or  silver,  unless  they  send  them  to  England 
immediately;  they  have  not  the  liberty  of  trading  to  any  parts  that 
do  not  belong  to  the  British  dominions,  excepting  some  settled  places; 
and  foreign  traders  are  not  allowed  to  send  their  ships  to  them.  These 
and  some  other  restrictions,  occasion  the  inhabitants  of  the  English 
colonies  to  grow  less  tender  for  their  mother  country.  This  coldness 
is  kept  up  by  the  many  foreigners,  such  as  Germans,  Dutch,  and 
French,  settled  here,  and  living  among  the  English,  who  commonly 
have  no  particular  attachment  to  Old  England;  add  to  this  likewise, 
that  many  people  can  never  be  contented  with  .their  possessions, 
though  they  be  ever  so  great,  and  will  always  be  desirous  of  getting 

'    :1'  Travels  into  North  America.  :  Ry  Peter  Kalm  (London, .'1770).     In  Pinkerton, 
Voyages  and  Travels,  XIII,  461.   , 


144  READINGS  IN  ECONOMIC  HISTORY 

more,  and  of  enjoying  the  pleasure  which  arises  from  changing;  and 
their  over  great  liberty,  and  their  luxury,  often  lead  them  to  licentious- 
ness. 

I  have  been  told  by  Englishmen,  and  not  only  by  such  as  were 
born  in  America,  but  even  by  such  as  came  from  Europe,  that  the 
English  colonies  in  North  America,  in  the  space  of  thirty  or  fifty  years, 
would  be  able  to  form  a  state  by  themselves,  entirely  independent  on 
Old  England:  but  as  the  whole  country  which  lies  along  the  sea-shore 
is  unguarded,  and  on  the  land  side  is  harrassed  by  the  French  in  times 
of  war,  these  dangerous  neighbours  are  sufficient  to  prevent  the  con- 
nection of  the  colonies  with  their  mother  country  from  being  quite 
broken  off.  The  English  government  has  therefore  sufficient  reason 
to  consider  the  French  in  North  America  as  the  best  means  of  keeping 
the  colonies  in  their  due  submission. 

B.   Prohibition  of  Western  Expansion,  1763-1772  l 

One  of  the  little  emphasized  but  important  causes  of  discontent  among  the 
colonists  was  the  prohibition  of  westward  expansion  and  of  settlements  beyond  the 
Alleghany  mountains.  This  was  particularly  irritating  to  the  people  of  Virginia 
with  their  large  charter  claims  to  western  lands.  The  Royal  Proclamation  of  1763, 
by  the  British  government,  forbade  any  governor  "  to  grant  warrant  of  survey,  or 
pass  patents  for  any  lands  beyond  the  heads  or  sources  of  any  of  the  rivers  which 
fall  into  the  Atlantic  Ocean  from  the  west  or  north-west;  or  upon  any  lands  what- 
ever, which  not  having  been  ceded  to,  or  purchased  by  us  ...  are  reserved  to 
the  said  Indians,  or  any  of  them."  This  restriction  of  the  area  of  settlement  to  the 
seacoast  gave  rise  to  protest  on  the  part  of  the  colonists  and  the  matter  was  con- 
sidered several  times  by  the  Board  of  Trade,  but  they  each  time  endorsed  the  policy 
laid  down  in  1763.  The  following  extract  from  a  report  made  in  1772  sets  forth 
the  arguments  for  and  against  such  a  policy. 

The  object  of  colonisation  in  North  America  has  been  to  improve 
and  extend  the  commerce,  navigation  and  manufactures  of  this  king- 
dom, —  (i)  by  the  fisheries  on  the  northern  coast;  (2)  by  the  growth 
of  naval  stores  and  raw  produce  to  be  exchanged  for  manufactures  and 
other  merchandise;  (3)  by  securing  a  supply  of  lumber  and  provisions 
for  the  island  colonies.  For  these  purposes,  settlements  were  confined 
as  much  as  possible  to  the  seacoast,  so  as  to  be  accessible  to  merchant 
ships  and  defensible  by  the  British  Navy,  which  could  use  the  ports 
as  stations  in  time  of  war.  .  .  . 

The  arguments  in  favour  of  inland  settlements  are,  (i)  Such 
colonies  promote  population  and  form  a  market  for  English  woollens; 

1  Acts  of  the  Privy  Council,  Colonial  Series,  The  Unbound  Papers  (London, 
1911),  VI,  513-8,  passim. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        145 

(2)  they  secure  the  fur  trade  from  the  French  and  Spaniards;  (3)  they 
defend  the  old  colonies  against  the  Indians ;  (4)  they  lessen  the  expense 
of  supplying  the  distant  forts  with  provisions;  (5)  the  people  already 
residing  there  require  some  form  of  civil  government. 

(1)  The  new  sea-coast  colonies  provide  a  market  for  manufac- 
tures;  but  these,  being  1,500  miles  inland,  would  supply  no  returns 
to  pay  for  British   manufactures,   and   would  probably  be  led  to 
manufacture  for   themselves,    "which   experience   shows   has    con- 
stantly attended  in  a  greater  or  lesser  degree  every  inland  settlement." 

(2)  "It  does  appear  to  us  that  the  extension  of  the  fur  trade 
depends  entirely  upon  the  Indians  being  undisturbed  in  the  possession 
of  their  hunting-grounds;   that  all  colonising  does  in  its  nature,  and 
must  in  its  consequences,  operate  to  the  prejudice  of  that  branch  of 
commerce,  and  that  the  French  and  Spaniards   would   be  left   in 
possession  of  a  great  part  of  what  remained;   as  New  Orleans  would 
still  continue  the  best  and  surest  market." 

(3)  "So  far  from  affording  protection  to  the  old  colonies,  they 
will  stand  most  in  need  of  it  themselves." 

(4)  The  degree  of  utility  of  the  provisions  raised  will  be  propor- 
tioned to  the  number   of  the  forts;   the  French  inhabitants  near 
the  Lakes,  and  on  the  Mississippi,  Illinois  and  Ohio  could  supply 
all  the  forts  that  will  be  required. 

(5)  Settlements  formed  under  military  establishments  require  no 
other  superintendence  than  that  of  the  military  officers  in  command. 
The  B.  of  T.  next  quote  the  opinion  of  the  Commander  in  Chief  in 
America  in  a  letter  to  Lord  Hillsborough:   he  conceived  such  settle- 
ments inconsistent  with  sound  policy.     The  only  commodities  these 
parts  could  have  to  barter  for  manufactures  would  be  furs  and  skins, 
which  will  naturally  decrease  as  the  country  increases  in  people. 
Necessity  would  force  them  to  manufacture  for  themselves,  "and 
when  all  connection  upheld  by  commerce  with  the  mother  country 
shall  cease,  it  may  be  expected  that  an  independency  on  her  govern- 
ment will  soon  follow  .  .  .  there  is  room  enough  for  the  colonists  to 
spread  within  our  present  limits  for  a  century  to  come.     If  we  re- 
flect how  the  people  of  themselves  have  gradually  retired  from  the 
coast,  we  shall  be  convinced  they  want  no  encouragement  to  desert 
the  seacoasts  and  go  into  the  back-countries,  where  the  lands  are 
better  and  got  upon  easier  terms.     They  are  already  almost  out  of 
the  reach  of  law  and  government.  .  .  .     The  lower  provinces  are 
still  thinly  inhabited,  and  not  brought  to  the  point  of  perfection  that 
has  been  aimed  at  for  the  mutual  benefit  of  Great  Britain  and  them- 


i46  READINGS  IN  ECONOMIC  HISTORY 

selves.  Although  America  may  supply  the  mother  country  with 
many  articles,  few  of  them  are  yet  supplied  in  quantities  equal  to  her 
consumption;  the  quantity  of  iron  transported  is  not  great,  of  hemp 
very  small;  and  there  are  many  other  commodities  not  necessary 
to  enumerate,  which  America  has  not  yet  been  able  to  raise,  not- 
withstanding the  encouragement  given  her  by  bounties  and  premiums. 
The  laying  open  new  tracts  of  fertile  territory  in  moderate  climates 
might  lessen  her  present  produce,  for  it  is  the  passion  of  every  man  to 
be  a  landholder,  and  the  people  have  a  natural  disposition  to  rove  in 
search  of  good  lands,  however  distant.  It  may  be  a  question  likewise 
whether  colonisations  of  the  kind  could  be  effected  without  an  Indian 
war  and  fighting  for  every  inch  of  the  ground.  ...  I  conceive  that 
to  procure  all  the  commerce  that  it  will  afford,  and  at  as  little  expense 
to  ourselves  as  we  can,  is  the  only  object  we  should  have  in  view  in 
the  interior  country  for  a  century  to  come."  The  Indians  desire  our 
manufactures  as  much  as  we  do  their  peltry;  firearms  are  necessary 
to  them  for  hunting,  as  they  are  disused  to  the  bow;  for  their  own 
sakes,  therefore,  they  would  protect  the  trade.  .  .  . 

The  B.  of  T.  propose  that  no  grant  be  made,  and  that  another 
proclamation  be  issued  against  any  settlement  beyond  the  line 
prescribed  by  the  Proclamation  of  1763. 

C.    The  Prohibition  of  Colonial  Paper  Money,  1764  l 

The  issue  of  paper  money  in  the  colonies  had  always  been  regarded  with  dis- 
approval by  the  British  government,  and  a  series  of  measures  was  passed  designed 
to  put  an  end  to  such  practices.  In  1741  Parliament  declared  its  authority 
over  the  matter;  ten  years  later  it  forbade  the  issue  of  colonial  bills  of  credit  in 
New  England;  and  finally  in  1764  it  extended  this  prohibition  to  all  the  colonies. 
The  quarrels  over  this  matter  between  colonial  legislatures  and  royal  governors 
was  undoubtedly  an  important  factor  in  creating  discontent  in  the  colonies. 

In  the  Report  of  the  Board  of  Trade,  dated  February  9th,  1764, 
the  following  reasons  are  given  for  restraining  the  emission  of  paper 
bills  of  credit  in  America,  as  a  legal  tender. 

1.  "That  it  carries  the  gold  and  silver  out  of  the  province,  and  so 
ruins  the  country;   as  experience  has  shown,  in  every  colony  where  it 
has  been  practiced  in  any  great  degree. 

2.  "That  the  merchants  trading  to  America  have  suffered  and  lost 
by  it. 

3.  "That  the  restriction  has  had  a  beneficial  effect  in  New  England. 

1  Report  of  the  Board  of  Trade,  February  g,  1764.  Quoted  in  Franklin's  Works 
(Spark's  edition,  Boston,  1840),  II,  341-2. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        147 

4.  "That  every  medium  of  trade  should  have  an  intrinsic  value, 
which  paper  money  has  not.     Gold  and  silver  are  therefore  the  fittest 
for  this  medium,  as  they  are  an  equivalent,  which  paper  never  can 
be. 

5.  "That  debtors,  in    the  Assemblies,  make   paper  money  with 
fraudulent  views. 

6.  "That  in  the  middle  colonies,  where  the  credit  of  the  paper 
money  has  been  best  supported,  the  bills  have  never  kept  to  their  nominal 
value  in  circulation,  but  have   constantly  depreciated  to  a  certain 
degree,  whenever  the  quantity  has  been  increased." 

D.   Remonstrance  of  New  York  Assembly  against 
Prohibition  of  Paper  Money,  7775  1 

The  significance  of  the  act  of  Parliament  which  prohibited  the  issue  of  legal 
tender  paper  money  in  the  colonies  as  one  of  the  important  causes  of  the  Revolution 
is  now  recognized.  Its  inclusion  in  a  list  of  grievances  by  the  New  York  Assembly 
shows  the  attitude  of  the  colonists  on  this  point. 

"The  Representation  and  Remonstrance  of    the    General  As- 
sembly of  the  Colony  of  New  York.  .  .  . 

"We  cannot  avoid  mentioning  among  our  grievances  the  Act 
for  prohibiting  the  legislature  of  this  colony  from  passing  any  law 
for  the  emission  of  a  paper  currency  to  be  a  legal  tender  in  the  colony : 
our  commerce  affords  so  small  a  return  of  specie,  that  without  a  paper 
currency,  supported  on  the  credit  of  the  colony,  our  trade  and  the 
change  of  the  property  must  necessarily  decrease;  without  this  expedi- 
ent we  never  should  have  been  able  to  comply  with  the  requisitions 
of  the  crown  during  the  last  war,  or  to  grant  ready  aids  on  any  sudden 
emergencies.  The  credit  of  our  bills  has  ever  been  secured  from  de- 
preciation by  the  short  periods  limited  for  their  duration,  and  sink- 
ing them  by  taxes  raised  on  the  people;  and  the  want  of  this  power 
may,  in  future,  prevent  his  Majesty's  faithful  subjects  here  from 
testifying  their  loyalty  and  affection  to  our  gracious  sovereign,  and 
from  granting  such  aids  as  may  be  necessary  for  the  general  weal  and 
safety  of  the  British  empire:  nor  can  we  avoid  remonstrating  against 
this  Act,  as  an  abridgement  of  the  royal  prerogative,  and  a  violation 
of  our  legislative  rights.  .  .  . 

"Assembly  Chamber,  City  of  New  York,  the  25th  day  of  March 
I775-" 

1  The  Parliamentary  History  of  England.  By  Hansard  (London,  1813), 
XVIII,  653. 


148  READINGS  IN  ECONOMIC  HISTORY 

E.    The  Enforcement  of  the  Navigation  Acts,  1764  l 

The  Seven  Years'  War  in  America  had  resulted  in  the  expulsion  of  the  French, 
which  was  an  advantage  to  the  colonies,  but  had  left  Great  Britain  with  a  largely 
increased  debt.  It  was  determined  therefore  to  establish  a  standing  army  in  the 
colonies,  to  the  support  of  which  the  colonists  must  contribute  by  means  of  a  new 
system  of  taxes.  At  the  same  time  the  navigation  acts  were  to  be  vigorously  en- 
forced with  the  aid  of  British  ships  of  war,  paper  money  prohibited,  and  the  reins 
of  government  drawn  more  tightly  about  the  colonies.  These  different  acts  of  the 
year  1 764  were  passed  under  the  leadership  of  Charles  Townshend,  who  was  the  first 
lord  of  trade  and  intrusted  with  the  administration  of  the  colonies.  They  are 
sympathetically  described  by  an  English  author. 

The  entire  cession  of  the  French  possessions  in  North  America, 
was  a  subject  of  trembling  expectation  in  the  minds  of  many  who 
were,  by  no  means,  in  the  habit  of  employing  their  reason  in  idle 
speculations.  While  this  vast  extent  of  country  remained  in  the 
possession  of  France,  it  certainly  operated  as  a  powerful  restraint 
upon  the  colonies,  and  by  keeping  them  in  perpetual  alarms,  obliged 
them  to  have  continual  recourse  to  the  parent  state  for  aid  and  pro- 
tection. The  acquisition  therefore  of  Canada,  &c.  by  freeing  the 
British  North  American  colonies  from  all  apprehensions  on  that 
dangerous  quarter,  afforded  them  a  security  which  they  had  never 
known;  and,  of  course,  gave  leisure  for  the  progress  of  those  ideas, 
which  otherwise  might  indeed  have  occasionally  risen  into  existence, 
but  would  never  have  attained  to  any  degree  of  maturity. 

While  France  possessed  this  ceded  territory,  she  must,  in  the  most 
confidential  moments  of  peace,  have  been  considered,  from  her  Ameri- 
can position,  exclusive  of  all  other  circumstances,  as  a  natural  enemy 
to  British  America;  and  while  that  idea  remained,  the  connection 
between  Great  Britain  and  her  Colonies  must  have  subsisted.  The 
one  would  have  wanted  protection,  and  the  other  would  have  required 
obedience;  and  these  reciprocal  obligations  would  have  preserved 
their  union  unbroken  in  every  circumstance  of  it. 

Thus  the  conclusion  of  the  war  between  Great  Britain  and  France, 
placed  the  North  American  colonies  in  a  situation  of  advantage  which 
they  had  never  before  known,  and  gave  them  an  unexperienced  oppor- 
tunity to  exert  all  that  natural  vigour  which  they  have  since  mani- 
fested. That  they  should  now  begin  to  feel  their  consequence,  was 
a  matter  of  natural  expectation;  and  that  the  wish  to  realize  it,  in 
some  degree,  by  enlarging  their  privileges,  or  pressing  a  little  on  what 

1  An  Historical  and  Chronological  Deduction  of  the  Origin  of  Commerce.  By 
Adam  Anderson  (London,  1789),  IV,  61-5. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        149 

might  be  considered  as  the  exuberance  of  parental  authority,  should 
be  encouraged  among  them,  was  the  result  of  their  prosperous  and 
powerful  condition.  .  .  . 

At  this  time,  therefore,  and  when  all  these  circumstances  were 
evident  to  the  most  common  observation,  it  was  surely  the  true  pol- 
icy of  Great  Britain  to  have  employed  the  most  temperate  measures 
in  her  government  of  the  American  colonies ;  and  it  was  at  this  moment 
that  she  began  to  exercise  her  power,  though  not  indeed  without  con- 
sideration; for  the  minister  of  that  period  was  not  in  the  habit  of 
committing  rash  actions.  .  .  . 

The  methods  which  were  now  adopted  to  prevent  smuggling, 
might  not  have  been  attended  with  any  unpleasant  consequences, 
if  they  had  been  confined  to  the  coasts  of  Great  Britain  and  Ireland; 
but  by  extending  them  to  the  shores  of  America,  they  interrupted 
a  commerce,  which  though  not  strictly  legal,  was  extremely  advan- 
tageous to  the  colonies.  They  were  therefore  in  a  state  of  no  common 
discontent  on  account  of  the  acts  of  the  British  Parliament  which 
added  to  their  restraints,  when  the  stamp  act  appeared  to  heighten 
their  resentment,  and  raise  a  kind  of  private  displeasure  into  ptiblic 
remonstrance  and  general  opposition. 

A  number  of  armed  cutters  were  stationed  around  the  coasts  of 
Great  Britain,  and  the  most  rigid  orders  were  issued  to  the  com- 
manders of  them  to  act  in  the  capacity  of  revenue  officers.  They 
were  enjoined  to  take  the  usual  custom-house  oaths,  and  to  observe 
the  regulations  prescribed  by  them.  Thus  was  the  distinguished 
character  of  a  British  naval  officer  degraded  by  the  employments  of 
a  tide-waiter,  and  that  active,  zealous  courage  which  had  been  accus- 
tomed to  the  conquest  of  an  enemy,  was  now  to  be  exerted  in  opposing 
a  contraband  trade,  and  to  find  a  reward  in  the  seizure  of  prohibited 
commodities. 

The  clamour  against  these  measures  was  loud  in  England;  but 
in  America  the  discontent  on  the  occasion  was  little  short  of  outrage. 
As  naval  gentlemen,  the  commanders  of  these  vessels  were  not  con- 
versant in  the  duties  of  revenue  collection,  they  were  therefore  often- 
times guilty  of  oppression ;  remedies  were  indeed  at  hand  in  England ; 
but  as  the  Lords  of  the  Admiralty  or  the  Treasury  could  alone  rectify 
any  errors,  check  any  violence,  punish  any  injustice,  or  restore  any 
violated  property,  it  was  always  extremely  difficult,  and  in  many  cases 
almost  impracticable,  for  the  Americans  to  obtain  redress. 

But  bad  as  this  evil  was,  there  arose  one,  from  the  same  source, 
which  was  still  worse.  —  A  trade  had  been  carried  on  for  more  than 


ISO  READINGS  IN  ECONOMIC  HISTORY 

a  century  between  the  British  and  Spanish  colonies  in  the  new  world, 
to  the  great  advantage  of  both,  but  especially  the  former,  as  well  as 
of  the  mother  country;  the  chief  materials  of  it  being  on  the  side  of 
the  British  colonies,  British  manufactures,  or  such  of  their  own  prod- 
uce as  enabled  them  to  purchase  British  manufactures  for  their  own 
consumption;  and,  on  the  part  of  the  Spaniards,  gold  and  silver  in 
bullion  and  coin,  cochineal  and  medicinal  drugs,  beside  live  stock  and 
mules;  which,  in  the  West  India  plantations,  to  which  places  alone 
these  last  articles  were  carried,  from  their  great  utility,  justly  deserved 
to  be  considered  of  equal  importance  with  the  most  precious  metals. 

This  trade  did  not  clash  with  the  spirit  of  any  act  of  Parliament 
made  for  the  regulation  of  the  British  plantation  trade;  or,  at  least 
with  that  spirit  of  trade  which  universally  prevails  in  our  commercial 
acts:  but  it  was  found  to  vary  sufficiently  from  the  letter  of  the 
former,  to  give  the  new  revenue  officers  a  plea  for  doing  that  from 
principles  of  duty,  which  there  were  no  small  temptations  to  do  from 
the  more  powerful  motives  of  interest.  Accordingly,  they  seized, 
indiscriminately,  all  the  ships  upon  that  trade,  both  of  subjects  and 
forefgners;  which  the  custom-house  officers  stationed  on  shore,  either 
through  fear  of  the  inhabitants,  a  more  just  way  of  thinking,  or  an 
happy  ignorance,  had  always  permitted  to  pass  unnoticed. 

As  the  advantage  of  this  commerce  was  very  much  in  favour  of 
Great  Britain,  the  Spanish  monarchy  had  always  opposed  it:  guarda- 
costas  were  commissioned  to  scour  the  coasts  of  her  American  do- 
minions, and  to  seize  every  vessel  which  approached  too  near  them; 
a  duty  which  they  had  exercised  with  such  general  licence,  as  to 
provoke  the  war  which  broke  out  in  1739.  The  British  cruizers 
seemed  to  act  at  this  time  with  the  same  spirit  in  destroying  this 
commerce,  so  that  in  a  short  space  of  time  it  was  almost  wholly 
annihilated. 

This  circumstance  was  to  the  northern  colonies  a  deprivation  of 
the  most  serious  nature.  —  This  traffic  had  long  proved  the  mine 
from  whence  they  drew  those  supplies  of  gold  and  silver  that  enabled 
them  to  make  copious  remittances  to  England,  and  to  provide  a  suffi- 
ciency of  current  specie  at  home.  A  sudden  stop  being  thus  put  to 
such  a  source  of  advantage,  the  Americans  expressed  the  injury 
they  sustained  in  the  harshest  terms  that  a  sense  of  injury  could  in- 
spire. But  in  spite  of  all  complaints,  the  ministry  continued  to  pro- 
ceed in  their  unfortunate  career,  and  measures  equally  offensive  to 
the  inhabitants  of  the  North  American  colonies  continued  to  be 
successively  adopted. 


CAUSES  AND   CONDUCT  OF  THE   REVOLUTION        151 

Besides  this  trade  carried  on  between  the  British  colonies  in  gen- 
eral, especially  those  in  the  West  Indies,  and  the  Spanish,  there  had 
for  a  long  time  subsisted  one  equally  extensive  between  the  British 
North  American  colonies  in  particular,  and  those  of  the  French  West 
Indies,  to  the  great  advantage  of  both,  as  it  consisted  chiefly  in  such 
goods  as  must  otherwise  have  remained  upon  the  hands  of  the  pos- 
sessors; so  that  it  united,  in  the  strictest  sense,  all  those  benefits 
which  liberal  minds  include  in  the  idea  of  a  well  regulated  commerce, 
as  tending,  in  the  highest  degree,  to  the  mutual  welfare  of  those  who 
were  concerned  in  it. 

In  these  benefits  the  respective  mother  countries  had,  without 
doubt,  a  very  large  share,  though  it  may  be  impossible  to  determine 
which,  upon  the  whole,  had  the  most.  We  had  enough  to  engage 
those  in  power  to  think  it  worth  connivance,  for  it  certainly  was  not 
strictly  to  law,  in  consideration  of  the  vast  quantity  of  manufactures 
it  enabled  our  American  colonies  to  take  from  us ;  ... 

Through  the  suppression  of  that  trade  which  we  have  just  been 
relating,  instead  of  barely  interrupting  these  supplies  of  the  neces- 
saries and  conveniences  of  life,  which  the  North  American  colonies 
were  before  accustomed  to  receive  in  return  for  their  superfluities  and 
incumbrances,  tended  visibly,  by  obstructing  their  internal  commerce, 
to  deprive  them,  in  a  great  degree,  even  of  those  blessings,  the  sources 
of  which  lay  within  themselves ;  yet  a  law  was  made  in  the  beginning 
of  the  last  year  [1764^,  which,  whilst  it  rendered  legal,  in  some  re- 
spects, their  intercourse  with  the  other  European  colonies  in  the  new 
world,  loaded  the  best  part  of  it  with  duties  so  far  above  its  strength 
to  bear,  as  to  render  it  contraband  to  all  intents  and  purposes.  Be- 
sides, it  ordered  the  money  arising  from  these  duties  to  be  paid,  and 
in  specie,  into  the  British  Exchequer,  to  the  entire  draining  of  the 
little  ready  money  which  might  be  still  remaining  in  the  colonies; 
and  within  a  fortnight  after,  another  law  was  passed  to  hinder  the 
colonies  from  supplying  the  demand  of  money  for  their  internal  wants, 
by  preventing  such  paper  bills  of  credit  as  might  be  afterwards  in 
them,  from  being  made  legal  tender  in  payment ;  and  the  legal  tender 
of  such  bills  as  were  actually  subsisting,  from  being  prolonged  beyond 
the  periods  already  limited  for  calling  in  and  sinking  the  same. 

These  new  regulations  following  each  other  so  rapidly,  produced 
an  equal  degree  of  surprise  and  discontent  among  the  people  of  North 
America.  Warm  and  spirited  remonstrances  were  sent  to  England 
on  the  occasion. 


152  READINGS  IN  ECONOMIC  HISTORY 

F.    The  Sugar  Act  of  1764  1 

By  the  so-called  Molasses  Act  of  1 733  Parliament  imposed  practically  prohibi- 
tory duties  upon  rum,  molasses,  and  sugar  imported  into  the  British  colonies  of 
North  America  from  the  West  India  islands  that  belonged  to  other  nations.  The 
duties  were  gd.  per  gallon  upon  rum  or  spirits,  6d.  per  gallon  upon  molasses 
or  syrups,  and  5  s.  per  hundredweight  upon  sugar.  Had  these  duties  been  enforced 
they  would  have  destroyed  an  important  and  lucrative  trade  between  the  northern 
colonies  and  the  French  West  Indies,  from  which  both  molasses  and  rum  could  be 
had  more  cheaply  than  from  the  British  West  Indies.  But  the  act  was  disregarded 
and  remained  practically  a  dead  letter. 

In  1 764  Parliament  decided  to  enforce  the  revenue  acts  and  modified  the  pro- 
hibitive duties  imposed  by  the  Act  of  1733,  at  the  same  time  providing  for  their 
vigorous  collection.  The  so-called  Sugar  Act  of  1764  prohibited  the  importation 
of  rum  or  spirits  from  foreign  plantations,  raised  the  duty  upon  foreign  sugars  to 
22  s.  per  hundredweight,  but  reduced  that  upon  molasses  to  3  d.  As  the  former  act 
had  been  inoperative,  this  was  practically  equivalent  to  the  imposition  of  new  duties. 
Sir  Francis  Bernard,  Governor  of  Massachusetts,  was  one  of  the  more  liberal  and 
farsighted  British  officials  in  America  and  warned  his  country  of  the  consequences 
if  the  Sugar  Act  were  enforced. 

The  publication  of  orders  for  the  strict  execution  of  the  Molasses 
Act  has  caused  a  greater  alarm  in  this  country  than  the  taking  of 
Fort  William  Henry  did  in  1757.  Petitions  from  the  trading  towns 
have  been  presented  to  the  General  Court;  and  a  large  Committee 
of  both  Houses  is  sitting  every  day  to  prepare  instructions  for  their 
Agent.  In  the  mean  time,  the  Merchants  say,  There  is  an  end  of  the 
trade  in  this  Province;  that  it  is  sacrificed  to  the  West  Indian  Planters; 
that  it  is  time  for  every  prudent  man  to  get  out  of  debt  with  Great 
Britain  as  fast  as  he  can,  and  betake  himself  to  husbandry,  and  be 
content  with  such  coarse  manufactures  as  this  country  will  produce. 
This  is  now  the  common  talk  wherever  one  goes;  and  it  is  certain, 
that  whatever  detriment  the  continuation  and  strict  execution  of  the 
Molasses  Act  will  bring  to  the  trade  of  North  America  (and  surely 
more  or  less  it  will  bring),  it  will  soon  come  home  to  Great  Britain; 
and  then  the  British  Merchants  will  see  their  imprudence  in  sitting 
still  as  unconcerned  spectators,  whilst  the  West  Indians  are  confining 
the  trade  of  this  extensive  and  improving  country  within  their  own 
narrow  and  unextensible  circle.  For  nothing  is  more  plain,  than 
that  if  the  exports  of  North  America  are  diminished  (be  it  by  one 
fourth,  one  third,  or  one  half),  her  imports  from  Great  Britain  must 
be  lessened  in  the  same  proportion.  To  apply  this  to  a  fact:  last 

1  Select  Letters  on  the  Trade  and  Government  of  America.  By  Francis  Bernard 
(London,  1764),  9-11. 


CAUSES  AND   CONDUCT  OF  THE   REVOLUTION        153 

year  were  imported  into  this  Province  15,000  hogsheads  of  molasses, 
all  of  which,  except  less  than  500,  came  from  Ports,  which  are  now 
Foreign.  The  value  of  this,  at  is.  4d.  a  gallon  (which  is  a  middling 
price  as  sold  out  of  merchants  storehouses)  is  100,000  pounds  sterling; 
to  purchase  which,  fish  and  lumber  of  near  the  same  value  must  be 
sent  from  hence.  Now  suppose  this  trade  prohibited  (for  a  duty  of 
50  per  cent,  amounts  to  a  prohibition)  the  consequences  must  be, 
that  this  Province  must  import  100,000  pounds  less  of  British  goods; 
and  there  is  an  entire  loss  of  100,000  pounds  (the  fish  and  lumber 
coming  from  an  inexhaustible  store)  worth  of  goods  to  the  general 
British  Empire,  besides  the  loss  of  trade  and  decrease  of  shipping; 
and  this  annual,  in  one  Province,  and  in  one  article  of  trade  only. 
Is  there  not  therefore  just  cause  of  alarm  from  the  apprehensions  of 
the  probability  or  possibility  of  such  consequences?  If  it  should  be 
proposed  to  try  the  experiment  for  two  or  three  years  only;  first  let  it 
be  considered,  that  the  experiment  itself,  if  it  turns  out  as  is  expected, 
will  cost  Great  Britain  many  hundred  thousand  pounds.  But  this 
is  not  all:  if,  after  the  experiment  has  been  made,  it  should  be  thought 
proper  to  restore  the  North  Americans  to  the  freedom  of  this  trade, 
is  it  certain  that,  after  an  interruption  of  two  or  three  years,  it  can  be 
recovered  again?  Is  it  not  probable,  that  in  the  interim  the  Foreign 
Plantations  may  be  supplied  from  other  parts  (viz.  low-priced  fish 
from  the  French  fisheries,  lumber  from  the  East  side  of  the  Mississippi;) 
and  when  the  North  Americans  have  leave  again  to  resort  to  the  For- 
eign Ports,  they  may  find  them  shut  against  them?  When  the  sale 
of  French  Molasses  to  the  North  Americans  is  prohibited,  may  it  not 
be  the  cause  of  procuring  the  French  planters  liberty  to  distil  it  them- 
selves? And  if  this  valuable  trade,  which  takes  from  us  what  no  other 
markets  will  receive,  and  returns  to  us  what  ultimately  centers  in 
Great  Britain,  should,  by  making  experiments,  be  destroyed;  would 
it  not  be  the  case  of  the  man  whose  curiosity  (or  expectation  of  ex- 
traordinary present  gain)  killed  the  goose  who  laid  him  the  golden 
eggs?  Surely  it  is  not  an  idle  or  groundless  fear  which  makes  think- 
ing people  dread  the  consequences  of  continuing  and  enforcing  this 
Act. 

G.  Grievances  of  the  Colonists,  1764  v 

•  Governor  Pownall  here  sums  up  the  obnoxious  acts  of  the  year  1 764  of  which 
the  colonists  were  complaining  so  loudly.  Pownall  was  one  of  the  most  liberal 

1  The  Administration  of  the  British  Colonies.    By  Thomas  Pownall  ($th  edition, 
London,  1774),  I,  126-129. 


154  READINGS  IN  ECONOMIC  HISTORY 

administrators  in  the  colonies,  serving  as  governor  of  Massachusetts  and  of  South 
Carolina,  and  as  lieutenant  governor  of  New  Jersey.  After  his  return  to  England 
he  wrote  and  spoke  in  Parliament  in  defense  of  the  colonies. 

Upon  the  restoration  of  the  monarchy,  when  many  of  the  rights 
of  the  subject,  and  of  the  constitution,  were  settled;  the  constitution 
of  the  colonies,  received  their  great  alteration:  the  King  participated  the 
sovereignty  of  the  colonies  with  the  parliament;  the  parliament,  in 
its  proper  capacity,  was  admitted  to  a  share  in  the  government  of 
them:  The  parliament  then  first,  taking  up  the  idea,  indeed  very 
naturally,  from  the  power  they  had  exercised  during  the  common- 
wealth; that  all  these,  his  Majesty's  sovereign  dominions,  and  "all 
these,  his  Majesty's  subjects,"  were  of  or  belonging  to  the  realm; 
then  first,  in  the  proper  capacity  of  legislature,  (supreme  legislature 
of  the  realm,)  interposed  in  the  regulation  and  governing  of  the  colo- 
nies. —  And  thenceforward,  from  time  to  time,  sundry  acts  of  parlia- 
ment were  made,  not  only  (ist)  for  regulating  the  trade  of  the  colonies; 
but  also  (2dly)  for  ordering  and  limiting  their  internal  rights,  privi- 
leges and  property;  and  even  (3dly)  for  taxing  them.  —  In  the  course 
of  which  events;  while  the  Colonists  considered  this  principle  as  the 
Palladium  of  their  liberties,  viz.  that  they  were  to  be  ruled  and  gov- 
erned only  by  acts  of  parliament,  together  with  their  own  laws  not 
contrary  to  the  laws  of  England ;  the  King  in  the  same  course  of  events 
called  in  the  aid  of  parliament,  to  enable  him  to  regulate  and  govern 
the  colonies.  —  The  British  merchants  at  times  applied  to  parliament, 
on  the  affairs  of  the  colonies :  and  even  the  West  India  Planters  applied 
to  the  same  power,  to  carry  a  measure  against  the  colonies  of  North 
America.  Hence  we  find  enacted,  in  the  course  of  those  events, 

I.  The  navigation  act;    the  sugar,  and  other  acts,  for  regulating 
and  restraining  the  trade  of  the  colonies. 

II.  Also  Acts,  i.  altering  the  nature  of  their  estates,  by  treating 
real  estates  as  chattels.     2.   Restraining  them  from  manufactures. 
3.   Regulating  their  money.     4.   Altering  the  nature  of  evidence  in 
the  courts  of  common  law;   by  making  an  affidavit  of  a  debt  before 
the  Lord  mayor  in  London,  &c.  certified  in  writing,  an  evidence  in 
their  courts  in  America.     5.   Dissolving  indentures;    by  discharging 
such  of  their  servants  as  should  enlist  in  the  King!s  service. 

III.  Also  Acts,  fixing  a  tax  upon  American  sailors,  payable  to  the 
Greenwich  Hospital.     2.   Likewise  imposing  taxes;    by  the  several 
duties  payable  on  sundry  goods,  if  intended  as  materials  of  trade, 
to  be  paid  within  the  province,  or  colony,  before  they  can  be  put  on 
board,  for  exportation.     3.   Also,  the  revenue  arising  from  the  duties 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        155 

payable  on  the  postage  of  letters.  4.  Also,  the  tax  of  quartering 
soldiers,  and  supplying  them  in  their  quarters.  Lastly,  establishing 
the  claim  which  Great  Britain  makes,  of  taxing  the  colonies  in  all. 
cases  whatsoever,  by  enacting  the  claim  into  a  declared  right,  by  act 
of  parliament. 

H.  Opposition  to  Acts  of  Trade,  1775  1 

The  essays  from  which  this  extract  was  taken  were  written  by  John  Adams  in 
answer  to  one  by  Leonard,  in  which  the  latter  had  defended  the  conduct  of  Great 
Britain  toward  the  colonies.  While  some  allowance  must  be  made  for  the  purpose 
for  which  the  essay  was  written,  it  yet  contains  some  very  significant  statements. 

This  writer  says,  acts  of  parliament  for  regulating  our  internal 
polity  were  familiar.  This  I  deny.  So  far  otherwise,  that  the  hatter's 
act  was  never  regarded;  the  act  to  destroy  the  Land  Bank  Scheme 
raised  a  greater  ferment  in  this  province,  than  the  stamp-act  did, 
which  was  appeased  only  by  passing  province  laws  directly  in  oppo- 
sition to  it.  The  act  against  slitting  mills,  and  tilt  hammers,  never 
was  executed  here.  As  to  the  postage,  it  was  so  useful  a  regulation, 
so  few  persons  paid  it,  and  they  found  such  a  benefit  by  it,  that  little 
opposition  was  made  to  it.  Yet  every  man  who  thought  about  it 
called  it  an  usurpation.  Duties  for  regulating  trade  we  paid,  because 
we  thought  it  just  and  necessary  that  they  should  regulate  the  trade 
which  their  power  protected.  As  for  duties  for  a  revenue,  none  were 
ever  laid  by  parliament  for  that  purpose  until  1764,  when,  and  ever 
since,  its  authority  to  do  it  has  been  constantly  denied.  Nor  is 
this  complacent  writer  near  the  truth,  when  he  says,  "We  know  that 
in  all  those  acts  of  government,  the  good  of  the  whole  had  been  con- 
sulted." On  the  contrary,  we  know  that  the  private  interest  of  pro- 
vincial governors  and  West  India  planters,  had  been  consulted  in 
the  duties  on  foreign  molasses,  &c.  and  the  private  interest  of  a 
few  Portugal  merchants,  in  obliging  us  to  touch  at  Falmouth  with 
fruit,  &c.  in  opposition  to  the  good  of  the  whole,  and  in  many  other 
instances. 

I.   Testimony  on  the  Stamp  Act,  1765 2 

A  part  of  the  scheme  for  colonial  taxation  had  been  a  stamp  act,  which  was  ap- 
proved by  Parliament  with  very  little  opposition,  the  vote  being  205  to  49  in  the 

1  Novanglus  and  Massachusetlensis:   or  Political  Essays,  published  in  the  years 
1774  and  1775. By    John  Adams  and  Jonathan  Sewall  [Daniel  Leonard]  (Boston, 
1819),  39. 

2  Franklin,  B.,  Works  (Sparks  edition,  Boston,  1840),  IV,  162-181,  passim. 
Also  in  Hansard,  Parliamentary  History  of  England,  XVI,  137-160. 


156  READINGS  IN  ECONOMIC  HISTORY 

House  of  Commons  and  unanimous  in  the  House  of  Lords.  In  the  colonies,  how- 
ever, where  the  stricter  enforcement  of  the  acts  of  trade  were  already  threatening 
commerce  with  disaster,  especially  that  carried  on  with  the  French  and  Spanish 
West  Indies,  the  Stamp  Act  was  vigorously  resisted.  To  secure  information  as  to 
the  reasons  for  this  attitude  and  as  to  general  conditions  in  the  colonies  Parliament 
summoned  Benjamin  Franklin  as  a  witness.  The  testimony  he  gave  in  this  hearing 
is  marked  by  tact  and  firmness  and  presents  the  colonial  attitude  very  shrewdly. 
It  made  a  deep  impression  upon  Parliament.  Some  of  the  questions  were  evidently 
put  by  sympathizers  with  the  colonies,  for  they  invite  answers  favorable  to  their 
cause. 

Q.    What  is  your  name,  and  place  of  abode? 

A.     Franklin,  of  Philadelphia. 

Q.  Do  the  Americans  pay  any  considerable  taxes  among 
themselves? 

A .     Certainly  many,  and  very  heavy  taxes. 

Q.  What  are  the  present  taxes  in  Pennsylvania,  laid  by  the  laws 
of  the  colony? 

A.  There  are  taxes  on  all  estates,  real  and  personal;  a  poll  tax; 
a  tax  on  all  offices,  professions,  trades,  and  businesses,  according  to 
their  profits;  an  excise  on  all  wine,  rum,  and  other  spirits;  and  a 
duty,  of  ten  pounds  per  head  on  all  negroes  imported,  with  some  other 
duties. 

Q.     For  what  purposes  are  those  taxes  laid? 

A.  For  the  support  of  the  civil  and  military  establishments  of 
the  country,  and  to  discharge  the  heavy  debt  contracted  in  the  last 
war. 

Q.    How  long  are  those  taxes  to  continue? 

A.  Those  for  discharging  the  debt  are  to  continue  till  1772,  and 
longer,  if  the  debt  should  not  be  then  all  discharged.  The  others 
must  always  continue.  .  .  . 

Q.  What  may  be  the  amount  of  one  year's  imports  into  Penn- 
sylvania from  Britain? 

A .  I  have  been  informed  that  our  merchants  compute  the  imports 
from  Britain  to  be  above  five  hundred  thousand  pounds. 

Q.  What  may  be  the  amount  of  the  produce  of  your  province 
exported  to  Britain? 

A .  It  must  be  small,  as  we  produce  little  that  is  wanted  in  Britain. 
I  suppose  it  cannot  exceed  forty  thousand  pounds. 

Q.     How  then  do  you  pay  the  balance? 

A .  The  balance  is  paid  by  our  produce  carried  to  the  West  Indies, 
and  sold  in  our  own  islands,  or  to  the  French,  Spaniards,  Danes,  and 
Dutch;  by  the  same  produce  carried  to  other  colonies  in  North 


CAUSES  AND   CONDUCT  OF  THE   REVOLUTION        157 

America,  as  to  New  England,  Nova  Scotia,  Newfoundland,  Carolina, 
and  Georgia;  by  the  same,  carried  to  different  parts  of  Europe,  as 
Spain,  Portugal,  and  Italy.  In  all  which  places  we  receive  either 
money,  bills  of  exchange,  or  commodities  that  suit  for  remittance 
to  Britain;  which,  together  with  all  the  profits  on  the  industry  of  our 
merchants  and  mariners,  arising  in  those  circuitous  voyages,  and  the 
freights  made  by  their  ships,  center  finally  in  Britain  to  discharge 
the  balance,  and  pay  for  British  manufactures  continually  used  in 
the  provinces,  or  sold  to  foreigners  by  our  traders.  .  .  . 

Q.  You  have  said  that  you  pay  heavy  taxes  in  Pennsylvania; 
what  do  they  amount  to  in  the  pound? 

A.  The  tax  on  all  estates,  real  and  personal,  is  eighteen  pence 
on  the  pound,  fully  rated;  and  the  tax  on  the  profits  of  trades  and 
professions,  with  other  taxes,  do,  I  suppose,  make  full  half  a 
crown  in  the  pound  [i.e.  a  tax  of  12%%,  which  would  be  very 
heavy.  —  Ed.]  .  .  . 

Q.  Do  you  think  the  people  in  America  would  submit  to  pay  the% 
stamp  duty,  if  it  was  moderated? 

A.     No,  never,  unless  compelled  by  force  of  arms.  .  .  . 

Q.  What  was  the  temper  of  America  towards  Great  Britain 
before  the  year  1763? 

A.  The  best  in  the  world.  They  submitted  willingly  to  the 
government  of  the  crown,  and  paid,  in  their  courts,  obedience  to  the 
acts  of  Parliament.  .  .  . 

Q.     And  what  is  their  temper  now? 

A.     0,  very  much  altered. 

Q.  Did  you  ever  hear  the  authority  of  Parliament  to  make  laws 
for  America  questioned  till  lately? 

A.  The  authority  of  Parliament  was  allowed  to  be  valid  in  all 
laws,  except  such  as  should  lay  internal  taxes.  It  was  never  disputed 
in  laying  duties  to  regulate  commerce.  .  .  . 

Q.     And  have  they  not  still  the  same  respect  for  Parliament? 

A.     No,  it  is  greatly  lessened. 

Q.     To  what  cause  is  that  owing? 

A.  To  a  concurrence  of  causes;  the  restraints  lately  laid  on  their 
trade,  by  which  the  bringing  of  foreign  gold  and  silver  into  the  colo- 
nies was  prevented;  the  prohibition  of  making  paper  money  among 
themselves,  and  then  demanding  a  new  and  heavy  tax  by  stamps, 
taking  away,  at  the  same  time,  trials  by  juries,  and  refusing  to  receive 
and  hear  their  humble  petitions. 

Q.     Don't  you  think  they  would  submit  to  the  Stamp  Act,  if  it 


158  READINGS  IN  ECONOMIC  HISTORY 

was  modified,  the  obnoxious  parts  taken  out,  and  the  duty  reduced 
to  some  particulars  of  small  moment? 

A.    No,  they  will  never  submit  to  it.  ... 

Q.  You  say  the  colonies  have  always  submitted  to  external  taxes, 
and  object  to  the  right  of  Parliament  only  in  laying  internal  taxes; 
now  can  you  show,  that  there  is  any  kind  of  difference  between  the 
two  taxes  to  the  colony  on  which  they  may  be  laid? 

A.  I  think  the  difference  is  very  great.  An  external  tax  is  a 
duty  laid  on  commodities  imported;  that  duty  is  added  to  the  first 
cost  and  other  charges  on  the  commodity,  and,  when  it  is  offered  to 
sale,  makes  a  part  of  the  price.  If  the  people  do  not  like  it  at  that 
price,  they  refuse  it;  they  are  not  obliged  to  pay  it.  But  an  internal 
tax  is  forced  from  the  people  without  their  consent,  if  not  laid  by  their 
own  representatives.  The  Stamp  Act  says,  we  shall  have  no  com- 
merce, make  no  exchange  of  property  with  each  other,  neither  pur- 
chase, nor  grant,  nor  recover  debts;  we  shall  neither  marry  nor  make 
our  wills,  unless  we  pay  such  and  such  sums;  and  thus  it  is  intended 
to  extort  our  money  from  us,  or  ruin  us  by  the  consequences  of 
refusing  to  pay  it. 

Q.  But  supposing  the  external  tax  or  duty  to  be  laid  on  the  neces- 
saries of  life,  imported  into  your  colony,  will  not  that  be  the  same 
thing  in  its  effects  as  an  internal  tax? 

A.  I  do  not  know  a  single  article  imported  into  the  northern 
colonies,  but  what  they  can  either  do  with  out,  or  make  themselves. 

Q.  Don't  you  think  cloth  from  England  absolutely  necessary 
to  them? 

A.  No,  by  no  means  absolutely  necessary;  with  industry  and 
good  management,  they  may  very  well  supply  themselves  with  all 
they  want. 

Q.  Will  it  not  take  a  long  time  to  establish  that  manufacture 
among  them ;  and  must  they  not  in  the  mean  while  suffer  greatly? 

A.  I  think  not.  They  have  made  a  surprising  progress  already. 
And  I  am  of  opinion,  that  before  their  old  clothes  are  worn  out, 
they  will  have  new  ones  of  their  own  making. 

Q.     Can  they  possibly  find  wool  enough  in  North  America? 

A.  They  have  taken  steps  to  increase  the  wool.  They  entered 
into  general  combinations  to  eat  no  more  lamb;  and  very  few  lambs 
were  killed  last  year.  This  course,  persisted  in,  will  soon  make  a 
prodigious  difference  in  the  quantity  of  wool.  And  the  establishing 
of  great  manufactories,  like  those  in  the  clothing  towns  here,  is  not 
necessary,  as  it  is  where  the  business  is  to  be  carried  on  for  the  pur- 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        159 

poses  of  trade.  The  people  will  all  spin,  and  work  for  themselves, 
in  their  own  houses.  .  .  . 

Q.  '  If  the  act  is  not  repealed,  what  do  you  think  will  be  the  conse- 
quences? 

A.  A  total  loss  of  the  respect  and  affection  the  people  of  America 
bear  to  this  country,  and  of  all  the  commerce  that  depends  on  that 
respect  and  affection. 

Q.     How  can  the  commerce  be  affected? 

A.  •  You  will  find,  that  if  the  act  is  not  repealed,  they  will  take 
a  very  little  of  your  manufactures  in  a  short  time. 

Q.     Is  it  in  their  power  to  do  without  them? 

A.     I  think  they  may  very  well  do  without  them. 

Q.     Is  it  their  interest  not  to  take  them? 

A .  The  goods  they  take  from  Britain  are  either  necessaries,  mere 
conveniences,  or  superfluities.  The  first,  as  cloth,  &c.,  with  a  little 
industry  they  can  make  at  home;  the  second  they  can  do  without, 
till  they  are  able  to  provide  them  among  themselves;  and  the  last, 
which  are  much  the  greatest  part,  they  will  strike  off  immediately. 
They  are  mere  articles  of  fashion,  purchased  and  consumed  because 
the  fashion  in  a  respected  country;  but  will  now  be  detested  and  re- 
jected. The  people  have  already  struck  off,  by  general  agreement,  the 
use  of  all  goods  fashionable  in  mournings,  and  many  thousand  pounds' 
worth  are  sent  back  as  unsalable.  .  .  . 

Q.  You  say  they  do  not  object  to  the  right  of  Parliament,  in 
laying  duties  on  goods  to  be  paid  on  their  importation;  now,  is 
there  any  kind  of  difference  between  a  duty  on  the  importation  of 
goods,  and  an  excise  on  their  consumption? 

A.  Yes,  a  very  material  one;  an  excise,  for  the  reasons  I  have 
just  mentioned,  they  think  you  can  have  no  right  to  lay  within  their 
country.  But  the  sea  is  yours;  you  maintain,  by  your  fleets,  the 
safety  of  navigation  in  it,  and  keep  it  clear  of  pirates ;  you  may  have, 
therefore,  a  natural  and  equitable  right  to  some  toll  or  duty  on  mer- 
chandises carried  through  that  part  of  your  dominions,  towards  defray- 
ing the  expense  you  are  at  in  ships  to  maintain  the  safety  of  that 
carriage. 

J.   Causes  of  American  Discontent  before  1768  l 

In  the  following  extract  Franklin  puts  his  finger  upon  a  weak  point  in  the 
colonial  system,  namely  the  ease  with  which  interested  parties  or  private  interests 
could  secure  favorable  legislation  directed  against  the  colonies.  Acts  which  might 

1  Franklin,  B.,  Works  (Sparks  edition,  Boston,  1840),  IV,  249-52. 


160  READINGS  IN  ECONOMIC  HISTORY 

have  been  borne  without  a  murmur,  if  clearly  in  the  interest  of  the  Empire,  took 
on  a  very  different  aspect  when  they  were  seen  to  favor  only  a  few  individuals. 
There  wer,e  enough  of  these  to  discredit  the  whole  system  in  the  eyes  of  the  colonists. 

The  colonists  thus  being  greatly  alarmed,  as  I  said  before,  by  the 
news  of  the  act  for  abolishing  the  legislature  of  New  York,  and  the 
imposition  of  these  new  duties,  professedly  for  such  disagreeable  pur- 
poses, (accompanied  by  a  new  set  of  revenue  officers,  with  large  ap- 
pointments, which  gave  strong  suspicions  that  more  business  of  the 
same  kind  was  soon  to  be  provided  for  them,  that  they  might  earn 
their  salaries,)  began  seriously  to  consider  their  situation ;  and  to  re- 
volve afresh  in  their  minds  grievances,  which,  from  their  respect  and 
love  for  this  country,  they  had  long  borne,  and  seemed  almost  willing 
to  forget. 

They  reflected  how  lightly  the  interest  of  all  America  had  been 
estimated  here,  when  the  interests  of  a  few  of  the  inhabitants  of  Great 
Britain  happened  to  have  the  smallest  competition  with  it.  That  the 
whole  American  people  was  forbidden  the  advantage  of  a  direct  impor- 
tation of  wine,  oil,  and  fruit,  from  Portugal,  but  must  take  them  loaded 
with  all  the  expense  of  a  voyage  one  thousand  leagues  round  about, 
being  to  be  landed  first  in  England,  to  be  re-shipped  for  America; 
expenses  amounting,  in  war  time  at  least,  to  thirty  pounds  per  cent 
more  than  otherwise  they  would  have  been  charged  with;  and  all 
this,  merely  that  a  few  Portugal  merchants  in  London  may  gain  a 
commission  on  those  goods  passing  through  their  hands,  (Portugal 
merchants,  by  the  by,  that  can  complain  loudly  of  the  smallest  hard- 
ships laid  on  their  trade  by  foreigners,  and  yet,  even  in  the  last  year, 
could  oppose  with  all  their  influence  the  giving  ease  to  their  fellow 
subjects  labouring  under  so  heavy  an  oppression!)  That,  on  a  slight 
complaint  of  a  few  Virginia  merchants,  nine  colonies  had  been  re- 
strained from  making  paper  money,  become  absolutely  necessary  to 
their  internal  commerce,  from  the  constant  remittance  of  their  gold 
and  silver  to  Britain. 

But  not  only  the  interests  of  a  particular  body  of  merchants,  but 
the  interests  of  any  small  body  of  British  tradesmen  or  artificers, 
has  been  found,  they  say,  to  outweigh  that  of  all  the  King's  subjects 
in  the  colonies.  There  cannot  be  a  stronger  natural  right  than  that 
of  a  man's  making  the  best  profit  he  can  of  the  natural  produce  of 
his  lands,  provided  he  does  not  thereby  hurt  the  state  in  general. 
Iron  is  to  be  found  everywhere  in  America,  and  the  beaver  furs  are 
the  natural  produce  of  that  country.  Hats,  and  nails,  and  steel  are 
wanted  there  as  well  as  here.  It  is  of  no  importance  to  the  common 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        161 

welfare  of  the  empire,  whether  a  subject  of  the  King's  obtains  his 
living  by  making  hats  on  this  or  that  side  of  the  water.  Yet  the 
hatters  of  England  have  prevailed  to  obtain  an  act  in  their  own  favor, 
restraining  that  manufacture  in  America ;  in  order  to  oblige  the  Ameri- 
cans to  send  their  beaver  to  England  to  be  manufactured,  and 
purchase  back  the  hats,  loaded  with  the  charges  of  a  double  transpor- 
tation. In  the  same  manner  have  a  few  nail-makers,  and  a  still  smaller 
body  of  steel-makers  (perhaps  there  are  not  half  a  dozen  of  these  in 
England),  prevailed  totally  to  forbid  by  an  act  of  Parliament  the 
erecting  of  slitting-mills,  or  steel  furnaces  in  America;  that  the  Ameri- 
cans may  be  obliged  to  take  all  their  nails  for  their  buildings,  and 
steel  for  their  tools,  from  these  artificers,  under  the  same  disadvan- 
tages. 

Added  to  these,  the  Americans  remembered  the  act  authorizing 
the  most  cruel  insult  that  perhaps  was  ever  offered  by  one  people  to 
another,  that  of  emptying  our  gaols  into  their  settlements;  Scotland 
too  having  within  these  two  years  obtained  the  privilege  it  had  not 
before,  of  sending  its  rogues  and  villains  also  to  the  plantations. 

K.   Opposition  to  Tax  on  Tea  due  to  Smugglers,  7770  l 

John  Adams  was  living  in  Boston  at  the  time  of  the  destruction  of  the  tea  in 
Boston  harbor  and  was  in  intimate  touch  with  the  leading  men  in  the  movements 
leading  to  the  Revolution.  As  the  extract  is  taken  from  his  private  diary  we  may 
assume  his  comment  is  sincere. 

Stephens,  the  Connecticut  hemp  man,  was  at  my  office,  with 
Mr.  Counsellor  Powell  and  Mr.  Kent.  Stephens  says,  that  the  whole 
colony  of  Connecticut  has  given  more  implicit  observance  to  a  letter 
from  the  selectmen  of  Boston  than  to  their  Bibles  for  some  years; 
and  that,  in  consequence  of  it,  the  country  is  vastly  happier  than  it 
was;  for  every  family  has  become  a  little  manufactory-house,  and 
they  raise  and  make  within  themselves  many  things  for  which  they 
used  to  run  in  debt  to  the  merchants  and  traders.  So  that  nobody  is 
hurt  but  Boston  and  the  maritime  towns. 

"I  wish  there  was  a  tax  of  five  shillings  sterling  on  every  button 
from  England.  It  would  be  vastly  for  the  good  of  this  country,  &c. 
As  to  all  the  bustle  and  bombast  about  tea,  it  has  been  begun  by  about 
half  a  dozen  Holland  tea-smugglers,  who  could  not  find  so  much 
profit  in  their  trade  since  the  ninepence  was  taken  off  in  England." 
Thus  he.  Some  sense  and  some  nonsense! 

1  Diary,  in  Works.  By  John  Adams.  Edited  by  C.  F.  Adams  (Boston, 
1850),  II,  237- 


162  READINGS  IN  ECONOMIC  HISTORY 


L.   A  Defence  of  the  Navigation  Acts,  1769  l 

A  vigorous  defense  of  the  navigation  acts  and  of  the  English  colonial  policy  was 
made  by  Sir  George  Grenville,  the  chancellor  of  the  exchequer  during  this  period, 
under  whose  direction  the  execution  of  these  acts  was  carried  out.  It  is  an  extreme 
presentation  of  the  English  point  of  view,  making  it  appear  that  all  the  acts  were 
passed  primarily  for  the  sake  of  the  colonies  and  that  the  Seven  Years'  War  was 
"undertaken  for  their  defense  only." 

But  of  all  the  Measures  which  were  pursued  for  the  Benefit  of 
Trade,  those  were  by  far  the  most  important  which  respected  the 
Colonies,  who  have  been  of  late  the  Darling  Object  of  their  Mother 
Country's  Care:  We  are  not  yet  recovered  from  a  War  undertaken 
solely  for  their  Protection:  Every  Object  for  which  it  was  begun,  is 
accomplished;  and  still  greater  are  obtained  than  at  first  were  even 
thought  of;  but  whatever  may  be  the  Value  of  the  Acquisitions  in 
America,  the  immediate  Benefit  of  them  is  to  the  Colonies;  and  this 
Country  feels  it  only  in  their  Prosperity;  for  though  the  Accessions 
of  Trade  and  Territory  which  were  obtained  by  the  Peace,  are  so 
many  Additions  to  the  Empire  and  the  Commerce  of  Great  Britain  at 
large,  yet  they  principally  affect  that  Part  of  her  Dominions,  and  that 
Branch  of  her  Trade,  to  which  they  immediately  relate.  To  improve 
these  Advantages,  and  to  forward  still  further  the  peculiar  Interests 
of  Colonies,  was  the  chief  Aim  of  the  Administration  in  the  Period 
now  before  me.  Their  Whale-Fishery  was  encouraged  by  taking  off 
the  heavy  Duty  under  which  it  laboured;  in  consequence  of  which 
Gratuity  it  must  now  soon  entirely  overpower  our  own,  and  will 
probably  rival  that  of  the  Dutch;  so  as  to  supply  not  only  the  whole 
Demand  of  this  Country,  but  Part  also  of  the  foreign  Consumption. 
The  Restraint  laid  by  the  Acts  of  Navigation  upon  the  Exportation 
of  Rice,  was  at  the  same  Time  relaxed,  and  Liberty  given  to  both  the 
Carolinas  and  to  Georgia,  to  carry  it  to  foreign  Plantations  where  large 
Cargoes  may  be  annually  disposed  of.  The  Culture  of  Hemp  and 
Flax  in  America  was  promoted  by  Bounties;  and  another  Bounty 
was  given  upon  the  native  wild  Produce  of  the  Continent ;  the  Timber, 
in  such  Proportions  in  the  several  Species  of  it,  as  will  enable  the  Colo- 
nists to  bring  vast  Quantities  hither.  Should  the  Ends  intended 
by  all  this  Liberality  be  answered,  and  the  Effect  be,  as  in  time  it 
probably  will  be,  that  the  foreign  Plantations  will  be  supplied  wholly 
with  Rice,  and  this  Island  in  a  great  Measure  with  Whale  Bone  and 

1  Considerations  on  the  Trade  and  Finances  of  this  Kingdom.  By  George 
Grenville  [?]  (London,  1769),  61-3. 


CAUSES  AND   CONDUCT   OF  THE   REVOLUTION        163 

Oil,  with  Hemp,  Flax,  and  Timber,  from  the  Colonies,  the  Encrease  of 
their  Trade  will  exceed  the  most  sanguine  Expectations:  The  Con- 
sumption of  these  Commodities  which  they  may  be  able  to  furnish 
cannot  be  estimated  at  less  than  a  Million  a  Year:  In  all  they  will 
undoubtedly  have  a  Preference,  and  in  some  a  Monopoly. 

At  ths  same  Time  that  new  Branches  of  Commerce  were  thus 
given  to  them,  others  which  they  had  before  were  improved.  The 
Prohibition  on  the  Exportation  of  American  Bar  Iron  from  this  King- 
dom was  taken  away  by  an  Act  passed  in  1765  .  .  .  and  a  still  further 
Preference  was  shewn  to  the  Produce  of  our  West-India  Colonies,  by 
laying  heavy  Impositions  upon  the  Indigo,  Coffee,  Sugar,  and  Melasses 
of  the  foreign  Islands  imported  into  North  America,  while  the  same 
Commodities  raised  in  our  own,  were  lightly  charged  at  the  most,  and 
some  of  them  entirely  free.  .  .  . 

Whatever  may  be  the  Effects  of  the  Attention  thus  shewn  to  the 
Colonies,  the  Benefit  will  be  partially  felt  here,  but  principally  there: 
To  them  the  Whole  is  gain;  we  on  the  contrary  in  many  Respects 
sustain  a  Loss;  and  if  the  Interests  of  the  Mother  Country  could  be 
distinguished  from  those  of  the  Colonies,  it  would  be  difficult  to  justify 
the  Expence  she  has  thereby  incurred;  for  out  of  her  Revenues,  the 
Bounties  upon  Hemp,  Flax,  and  Timber  must  be  paid;  and  on  so 
much  of  the  British  Consumption  as  shall  in  consequence  of  this 
Encouragement  be  supplied  from  America,  there  will  be  a  further 
Loss  of  the  Duties  upon  foreign  Hemp,  Flax,  and  Timber  now  imported 
here :  The  Duty  too  upon  Whale-Fins  must  be  taken  into  the  Account 
which  is  another  Deduction,  avowedly  made  with  a  view  to  give  their 
Fishery  a  Preference  even  to  our  own;  and  it  is  obvious  that  the 
Amount  of  the  Whole,  though  it  cannot  easily  be  estimated,  must  be 
very  considerable. 

Were  there  no  other  Ground  to  require  a  Revenue  from  the  Colo- 
nies, than  as  a  Return  from  these  Obligations,  it  would  alone  be  a  suf- 
ficient Foundation:  Add  to  these  the  Advantages  obtained  for  them 
by  the  Peace;  and  the  Debt  incurred  by  a  War  undertaken  for  their 
Defence  only;  the  Distress  thereby  brought  upon  the  Finances,  upon 
the  Credit,  both  public  and  private,  upon  the  Trade,  and  upon  the 
People  of  this  Country;  and  it  must  be  acknowledged  that  no  Time 
was  ever  so  seasonable  for  claiming  their  Assistance.  The  Distribution 
is  too  unequal,  of  Benefits  only  to  the  Colonies  and  of  all  the  Burthens 
upon  the  Mother  Country;  and  yet  no  more  was  desired,  than  that 
they  should  contribute  to  the  Preservation  of  the  Advantages  they  had 
Received,  and  take  upon  themselves  a  small  share  of  the  Establish- 


1 64  READINGS  IN  ECONOMIC  HISTORY 

ment  necessary  for  their  own  Protection:  Upon  these  Principles 
several  new  Taxes  were  laid  upon  the  Colonies:  Many  of  them  were 
indeed,  as  I  have  already  shewn,  rather  Regulations  of  Trade  than 
Funds  of  Revenue:  But  some  were  intended  to  answer  both  Purposes: 
In  others  the  Produce  was  the  Principal  Object;  and  yet  even  the 
most  productive  of  all,  were  of  that  Kind  which  is  perhaps  more  tender 
of  Trade  than  any  other:  The  same  Sum  could  not  have  been  raised 
with  so  little  Oppression  by  Impost  as  by  Stamp  Duties,1  for  they  do 
not  even  effect  some  Articles  of  Commerce  more  than  others;  they 
do  not  even  fall  upon  Men  of  any  particular  Denomination:  They 
are  heavy  upon  none  because  they  are  paid  only  occasionally;  and 
they  are  collected  with  more  Ease  to  the  Subject  than  any;  but  a 
distinction  between  internal  and  external  Taxes  was  set  up  in  America, 
and  Occasion  was  from  thence  taken  to  raise  Disturbances  there, 
the  Particulars  and  Consequences  of  which  are  of  such  public  Noto- 
riety, that  it  is  needless  to  mention  them:  .  .  . 

M.   Causes  of  the  Revolution,  if]6 2 

Dean  Tucker  wrote  with  considerable  force,  not  to  say  acerbity,  against  the 
demands  of  the  colonists.  In  the  extract  here  quoted  he  inquires  what  the  real 
grievances  were  that  led  to  the  outcry  at  the  time  of  the  Stamp  Act,  and  concludes 
in  no  very  friendly  tone  that  they  were  due  to  the  English  interference  with  smug- 
gling, and  with  the  illegal  issue  of  paper  money,  and  to  a  desire  to  secure  political 
independence.  Tucker  was  Dean  of  Gloucester,  and  a  violent  and  able  partisan. 

Upon  the  Whole  therefore,  what  is  the  Cause  of  such  an  amazing 
Outcry  as  you  raise  at  present?  —  Not  the  Stamp  Duty  itself;  all  the 
World  are  agreed  on  that  Head;  and  none  can  be  so  ignorant,  or  so 
stupid,  as  not  to  see,  that  this  is  a  mere  Sham  and  Pretence.  What 
then  are  the  real  Grievances,  seeing  that  the  Things  which  you  alledge 
are  only  the  pretended  ones?  Why,  some  of  you  are  exasperated 
against  the  Mother  Country,  on  account  of  the  Revival  of  certain 
Restrictions  laid  upon  their  Trade:  —  I  say,  a  Revival;  for  the  same 
Restriction  have  been  the  standing  Rules  of  Government  from  the 
Beginning;  though  not  enforced  at  all  Times  with  equal  Strictness. 
During  the  late  War,  you  Americans  could  not  import  the  Manu- 
factures of  other  Nations  (which  it  is  your  constant  Aim  to  do,  and 

1  It  is  impossible  to  speak  with  Certainty  of  the  Produce  of  any  of  the  American 
Taxes.     I  have  therefore  throughout  followed  the  usual  Calculation,  and  estimated 
the  Impost  Duties  at  60,000  1.  and  the  Stamp  Duties  at  100,000  /.  per  ann. 

2  Four  Tracts  on  Political  and  Commercial  Subjects.     By  Josiah  Tucker  (Glouces- 
ter, 1776),  132-4,  136-7. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        165 

the  Mother  Country  always  to  prevent)  so  conveniently  as  you  can 
in  Times  of  Peace;  and  therefore,  there  was  no  Need  of  watching  you 
so  narrowly,  as  far  as  that  Branch  of  Trade  was  concerned.  But 
immediately  upon  the  Peace,  the  various  Manufactures  of  Europe, 
particularly  those  of  France,  which  could  not  find  Vent  before,  were 
spread,  as  it  were,  over  all  your  Colonies,  to  the  prodigious  Detriment 
of  your  Mother  Country;  and  therefore  our  late  Set  of  Ministers 
acted  certainly  right,  in  putting  in  Force  the  Laws  of  their  Country, 
in  order  to  check  this  growing  Evil.  If  in  so  doing  they  committed 
any  Error;  or,  if  the  Persons  to  whom  the  Execution  of  these  Laws 
were  intrusted,  exceeded  their  Instructions;  there  is  no  Doubt  to  be 
made,  but  that  all  this  will  be  rectified  by  the  present  Administration. 
And  having  done  that,  they  will  have  done  all  that  in  Reason  you  can 
expect  from  them.  But  alas!  the  Expectations  of  an  American  carry 
him  much  further:  For  he  will  ever  complain  and  smuggle,  and  smuggle 
and  complain,  'till  all  Restraints  are  removed,  and  'till  he  can  both 
buy  and  sell,  whenever,  and  wheresoever  he  pleases.  Anything  short 
of  this,  is  still  a  Grievance,  a  Badge  of  Slavery,  an  Usurpation  on  the 
natural  Rights  and  Liberties  of  a  free  People,  and  I  know  not  how 
many  bad  Things  besides. 

But,  my  good  Friend,  be  assured,  that  these  are  Restraints,  which 
neither  the  present,  nor  any  future  Ministry  can  exempt  you  from. 
They  are  the  standing  Laws  of  the  Kingdom;  and  God  forbid,  that 
we  should  allow  that  dispensing  Power  to  our  Ministers,  which  we 
so  justly  deny  to  our  Kings.  In  short  while  you  are  a  Colony,  you 
must  be  subordinate  to  the  Mother  Country.  These  are  the  Terms 
and  Conditions,  on  which  you  were  permitted  to  make  your  first 
Settlements:  They  are  the  Terms  and  Conditions  on  which  you  alone 
can  be  entitled  to  the  Assistance  and  Protection  of  Great-Britain;  —  ... 

So  much  as  to  your  first  Grievance;  and  as  to  your  second  it  is, 
beyond  Doubt,  of  a  Nature  still  worse.  For  many  among  you  are 
sorely  concerned,  That  they  cannot  pay  their  British  Debts  with  an 
American  Sponge.  This  is  an  intolerable  Grievance,  and  they  long 
for  the  day  when  they  shall  be  freed  from  this  galling  Chain.  Our 
Merchants  in  London,  Bristol,  Liverpool,  Glasgow,  &c.  &c.  perfectly 
understand  your  many  Hints  and  Inuendoes  to  us,  on  this  Head.  But 
indeed,  lest  we  should  be  so  dull  as  not  to  comprehend  your  Meaning, 
you  have  spoken  out,  and  proposed  on  open  Association  against  paying 
your  just  Debts.  Had  our  Debtors  in  any  other  Part  of  the  Globe,  had 
the  French  or  Spaniards  proposed  the  like  (and  surely  they  have  all 
at  least  an  equal  Right)  what  Name  would  you  have  given  to  such 


1 66  READINGS  IN  ECONOMIC  HISTORY 

Proceedings?    But  I  forget:    You  are  not  the  faithless  French  or 
Spaniards:  You  are  ourselves:  You  are  honest  Englishmen. 

Your  third  Grievance  is  the  Sovereignty  of  Great-Britain;  For 
you  want  to  be  independent:  You  wish  to  be  an  Empire  by  itself, 
and  to  be  no  longer  the  Province  of  another.  This  Spirit  is  upper- 
most; and  this  Principle  is  visible  in  all  your  Speeches,  and  all  your 
Writings,  even  when  you  take  some  Pains  to  disguise  it.  —  "What! 
an  Island!  A  Spot  such  as  this  to  command  the  great  and  mighty 
Continent  of  N orth- America!  Preposterous!  A  Continent,  whose 
Inhabitants  double  every  five  and  twenty  Years!  Who,  therefore, 
within  a  Century  and  a  Half  will  be  upwards  of  an  hundred  and  twenty 
Millions  of  Souls!  —  Forbid  it  Patriotism,  forbid  it  Politics,  that  such 
a  great  and  mighty  Empire  as  this,  should  be  held  in  Subjection  by 
the  paltry  Kingdom  of  Great-Britain!  Rather  let  the  Seat  of  Empire 
be  transferred;  and  let  it  be  fixt,  where  it  ought  to  be,  viz.  in  Great 
America!" 

II.  NON-IMPORTATION  AS  A  MEANS  OF  PRESSURE 

A.    Unfavorable  Balance  of  Trade  of  the  Northern  American 
Colonies,  1700-1773  l 

The  following  table,  compiled  by  Lord  Sheffield,  shows  clearly  one  of  the  reasons 
for  the  discontent  aroused  in  New  England  by  the  stricter  enforcement  of  the 
navigation  acts.  The  northern  colonies,  many  of  whose  products  were  denied 
access  to  English  markets,  had  been  compelled  to  develop  a  trade  with  the  West 
Indies,  with  southern  Europe,  and  to  a  small  extent  with  Africa.  With  the  profits 
from  this  trade  they  had  been  able  to  purchase  English  manufactures.  How  great 
this  commerce  was  may  be  judged  from  this  table,  where  the  excess  of  exports  in 
the  northern  colonies  alone  is  given  as  £30,000,000  for  the  period  1700  to  1773. 
When  this  trade  was  interrupted  by  the  enforcement  of  the  navigation  acts,  and 
especially  when  the  trade  to  the  West  Indies  was  cut  off,  the  northern  colonies  were 
deprived  of  the  means  of  purchasing  English  manufactured  goods. 

None  of  the  colonies  to  the  north  of  Maryland  have  ever  had  a 
balance  in  their  favour  by  their  imports  from  and  exports  to  Great 
Britain;  but  on  the  contrary,  a  large  balance  against  them,  which  they 
had  no  means  of  discharging  but  by  a  foreign  and  circuitous  2  com- 
merce. By  this  commerce  (except  the  value  of  the  ships  built  for 

1  Observations  on  the  Commerce  of  the  American  States.     By  Lord  John  Sheffield 
(2d  edition,  London,  1784),  246-7. 

2  Whatever  diminution  there  may  be  of  their  circuitous  trade,  we  shall  gain, 
and  with  the  benefit  of  freight,  all  the  profit  connected  with  a  more  extensive 
navigation. 


CAUSES  AND   CONDUCT  OF  THE   REVOLUTION        167 

the  British  merchants,  the  amount  of  which  cannot  possibly  be  ascer- 
tained) they  must,  since  the  year  1700,  have  obtained  from  other 
countries,  and  remitted  to  this,  upwards  of  thirty  millions  sterling 
in  payment  for  goods  taken  from  hence,  over  and  above  the  amount 
of  all  their  own  produce  and  fisheries  remitted  directly.1  By  foreign  is 
meant  the  trade  to  the  West  Indies,  Africa,  and  all  parts  of  Europe, 
except  Great  Britain. 

Balance  or  excess  of  exports  to,  and  of  imports  from,  the  Ameri- 
can States  from  1700  to  1773: 

Excess    of    Exports    Excess    of    Imports 
£  s.     d. 

The  four  New  England  States 13,896,287     17     4$ 

New  York,  New  Jersey,  and  Penn- 
sylvania,    including     Delaware 

counties 16,941,281       9     4! 

30,837,569      69  £  s.     d. 

Virginiaand  Maryland 8,155,363     n       5^ 

North  and  South  Carolina 2,611,671     13     10 

Georgia 123,034       9     7 

Excess  of  exports  to  the  provinces 


north  of  Maryland 30,960,603     16    4        10,767,035       5      3? 

Balance  or  excess  of  exports  to 
America  over  the  excess  of  im- 
ports    20,193,568  ii  | 


B.   Non-importation  Agreements  in  Boston  and  New  York,  1768 2 

In  order  to  protest  against  the  Stamp  Act  the  merchants  of  Massachusetts, 
Rhode  Island,  New  York,  and  Pennsylvania  in  1765  united  in  a  non-importation 
agreement,  by  which  they  bound  themselves  not  to  import  British  goods.  Because 
of  the  loss  of  trade  British  merchants  petitioned  Parliament  to  repeal  the  Stamp  Act, 


1  There  should  be  added  to  the  value  of  exports  to  America,  between  2  and 
300,000 1.  sent  to  Africa  annually  for  the  purchase  of  slaves,  which  were  chiefly  im- 
ported by  our  merchants  into  the  revolted  provinces.    The  real  exports  of  England, 
then,  to  those  provinces  would  be  1,531,206  1.  instead  of  1,331,206  1.,  the  average 
annual  export  of  ten  years  to  the  American  States,  as  in  the  annexed  Tables,  and  as 
the  whole  imports  from  those  states  into  England  were  only  valued  at  743,560  1., 
they  must  have  been  bad  paymasters  indeed,  or  have  had  as  much  foreign  and 
circuitous  trade  for  their  exports  as  they  had  directly  with  Great  Britain,  to  be 
enabled  to  pay  20  s.  in  the  pound. 

2  An  Historical  and  Chronological  Deduction  of  the  Origin  of  Commerce.     By 
Adam  Anderson  (London,  1789),  IV,  118-119. 


1 68  READINGS  IN  ECONOMIC  HISTORY 

which  was  done.  Again  in  1768  the  same  method  of  boycott  was  employed,  with 
equally  successful  results.  The  following  extract  states  briefly  the  agreement  made 
by  Boston  merchants. 

From  the  voluminous  miscellany  of  public  writings,  which  the 
colony  transactions  of  the  present  year  produced,  we  shall  only  select 
the  following  agreements  entered  into  by  the  inhabitants  of  Boston 
and  New  York. 

"The  merchants  and  traders  in  the  town  of  Boston,  having  taken 
into  consideration  the  deplorable  situation  of  the  trade,  and  the  many 
difficulties  it  at  present  labours  under,  on  account  of  the  scarcity  of 
money,  which  is  daily  increasing  for  want  of  the  other  remittances  to 
discharge  our  debts  in  Great  Britain,  and  the  large  sums  collected  by 
the  officers  of  the  Customs  for  duties  on  goods  imported;  the  heavy 
taxes  levied  to  discharge  the  debts  contracted  by  the  Government  in 
the  late  war;  the  embarrassments  and  restrictions  laid  on  the  trade 
by  the  several  late  acts  of  Parliament;  together  with  the  bad  success 
of  our  cod  fishery  this  season,  and  the  discouraging  prospect  of  the 
whale  fishery,  by  which  our  principal  sources  of  remittances  are  like 
to  be  greatly  diminished,  and  we,  thereby,  rendered  unable  to  pay  the 
debts  we  owe  the  merchants  in  Great  Britain,  and  to  continue  the 
importation  of  goods  from  thence. 

"We,  the  subscribers,  in  order  to  relieve  the  trade,  under  those 
discouragements,  to  promote  industry,  frugality,  and  economy,  and 
to  discourage  luxury,  and  every  kind  of  extravagance,  do  promise  and 
engage  to  and  with  each  other  as  follows: 

"First,  That  we  will  not  send  for  or  import  from  Great  Britain, 
either  upon  our  own  account,  or  upon  commission,  this  fall,  any  other 
goods  than  what  are  already  ordered  for  the  fall  supply. 

"Secondly,  That  we  will  not  send  for  or  import  any  kind  of  goods 
or  merchandize  from  Great  Britain,  either  on  our  own  account,  or  on 
commissions,  or  any  otherwise,  from  January  i,  1769,  to  January  i, 
1770,  except  salt,  coals,  fish-hooks  and  lines,  hamp  and  duck  bar  lead 
and  shot,  wool  cards  and  wool  wire. 

"Thirdly,  That  we  will  not  purchase  of  any  factor  or  others,  any 
kind  of  goods  imported  from  Great  Britain  from  January  i,  1769,  to 
January  i,  1770. 

"Fourthly,  That  we  will  not  import,  on  our  own  account,  or  on 
commissions,  or  purchase  of  any  who  shall  import  from  any  other 
colony  in  America,  from  January  1769  to  January  1770,  any  tea, 
glass,  paper,  or  other  goods,  commonly  imported  from  Great 
Britain. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        169 

"  Fifthly,  That  we  will  not,  from  and  after  the  first  of  January  1 769, 
import  into  this  province  any  tea,  paper,  glass,  or  painter's  colours, 
until  the  act  imposing  duties  on  those  articles  shall  be  repealed. 

"In  witness  whereof,  &c."  —  Dated  August  i,  1768. 

On  the  1 5th  of  September  following,  the  inhabitants  of  New  York, 
incited,  according  to  their  own  declaration,  by  the  example  of  those 
of  Boston,  entered  into  a  similar  agreement  for  the  non-use,  and  non- 
importation of  British  produce  and  manufactures. 

C.   Effect  in  England  of  Stamp  Act,  1765  1 

The  value  of  the  policy  of  non-importation  by  the  colonies  in  order  to  exert 
pressure  upon  Parliament  through  English  merchants  is  well  illustrated  by  Adam 
Smith's  comment.  This  "nation  of  shop-keepers,"  as  he  called  them  in  another 
place,  preferred  profits  to  principles. 

.  .  .  The  expectation  of  a  rupture  with  the  colonies,  accordingly, 
has  struck  the  people  of  Great  Britain  with  more  terror  than  they  ever 
felt  for  a  Spanish  armada,  or  a  French  invasion.  It  was  this  terror, 
whether  well  or  ill  grounded,  which  rendered  the  repeal  of  the  stamp 
act,  among  the  merchants  at  least,  a  popular  measure.  In  the  total 
exclusion  from  the  colony  market,  was  it  to  last  only  for  a  few  years, 
the  greater  part  of  our  merchants  used  to  fancy  that  they  foresaw  an 
entire  stop  to  their  trade;  the  greater  part  of  our  master  manufac- 
turers, the  entire  ruin  of  their  business;  and  the  greater  part  of  our 
workmen,  an  end  of  their  employment.  A  rupture  with  any  of  our 
neighbours  upon  the  continent,  though  likely  too  to  occasion  some 
stop  or  interruption  in  the  employments  of  some  of  all  these  different 
orders  of  people,  is  foreseen,  however,  without  any  such  general 
emotion.  .  .  . 

D.   Non-importation  in  North  Carolina,  1774 2 

The  closure  of  the  port  of  Boston  in  1774  aroused  the  other  colonies,  and  a 
third  non-importation  association  was  agreed  to  by  the  Continental  Congress,  to 
go  into  effect  on  December  i.  The  following  resolutions  from  North  Carolina, 
passed  a  month  before  the  Continental  Congress  voted  to  approve  of  such  action, 
shows  the  unanimity  of  feeling  which  characterized  the  colonies  by  this  time. 


1  An  Inquiry  into  the  Nature  and  Causes  of  the  Wealth  of  Nations.     By  Adam 
Smith  (Edinburgh,  1776).     Edited  by  Edwin  Cannan  (London,  1904),  II,  105-6. 

2  The  Colonial  Records  of  North  Carolina  (Raleigh,  1886),  IX,  1024-6.     For 
proceedings  of  the  Safety  Committees,  showing  how  the  agreement  was  enforced, 
see  ibid.,  IX,  1101,  1103,  1107  ff. 


1 70  READINGS  IN  ECONOMIC  HISTORY 

Proceedings  of  the  Freeholders  in  Rowan  County. 

August  8th  1774. 

At  a  meeting  August  8th  1774,  The  following  resolves  were  unani- 
mously agreed  to.  ... 

Resolved,  That  the  Right  to  impose  Taxes  or  Duties  to  be  paid  by 
the  Inhabitants  within  this  Province  for  any  purpose  whatsoever  is 
peculiar  and  essential  to  the  General  Assembly  in  whom  the  legislative 
Authority  of  the  Colony  is  vested.  .  .  . 

Resolved,  That  a  general  Association  between  all  the  American 
Colonies,  not  to  import  from  Great  Britain  any  Commodity  what- 
soever (except  such  things  as  shall  be  hereafter  excepted  by  the 
General  Congress  of  this  Province)  ought  to  be  entered  into  and  not 
dissolved  until  the  just  Rights  of  the  said  Colonies  are  restored  to 
them,  and  the  cruel  Acts  of  the  British  Parliament  against  the 
Massachusetts  Bay  and  Town  of  Boston  are  repealed. 

Resolved,  That  no  friend  to  the  Rights  and  Liberties  of  America 
ought  to  purchase  any  Commodity  whatsoever,  except  such  as  shall  be 
excepted,  which  shall  be  imported  from  Great  Britain  after  the  gen- 
eral Association  shall  be  agreed  upon. 

Resolved,  That  every  kind  of  Luxury,  Dissipation,  and  Extrava- 
gance ought  to  be  banished  from  among  us. 

Resolved,  That  manufactures  ought  to  be  encouraged  by  opening 
Subscriptions  for  that  purpose,  or  by  any  other  proper  means. 

Resolved,  That  the  African  Trade  is  injurious  to  this  Colony, 
obstructs  the  Population  of  it  by  freemen,  prevents  manufactures, 
and  other  Useful  Emigrants  from  Europe  from  settling  among  us, 
and  occasions  an  annual  increase  of  the  Balance  of  Trade  against  the 
Colonies. 

Resolved,  That  the  raising  of  Sheep,  Hemp  and  Flax  ought  to  be 
encouraged. 

Resolved,  That  to  be  cloathed  in  manufactures  fabricated  in  the 
Colonies  ought  to  be  considered  as  a  Badge  and  Distinction  of  Respect 
and  true  Patriotism. 

E.   Petition  of  London  Merchants  for  Reconciliation,  7775  1 

The  success  of  the  policy  of  non-importation  by  the  colonists,  through  the 
pressure  they  exerted  upon  British  merchants,  is  well  illustrated  by  this  petition  of 
London  merchants  to  the  House  of  Commons  to  apply  "healing  remedies"  to  the 
interrupted  trade  between  the  two  countries. 

1  Parliamentary  History  of  England.  By  Hansard  (London,  1813),  XVIII, 
168-179. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION       d?i 

Debate  in  the  Commons  on  the  Petitions  of  the  Merchants  of  London 
and  Bristol  for  Reconciliation  with  America.  Jan.  23.  Mr.  Alderman 
Hayley  said  he  had  a  petition  from  the  merchants  of  the  city  of  London 
concerned  in  the  commerce  to  North-America,  to  that  honourable 
House,  and  desired  leave  to  present  the  same,  which  being  given,  it 
was  brought  up  and  read,  setting  forth; 

"That  the  petitioners  are  all  essentially  interested  in  the  trade  to 
North- America,  either  as  exporters  and  importers,  or  as  venders  of 
British  and  foreign  goods  for  exportation  to  that  country;  and  that 
the  petitioners  have  exported,  or  sold  for  exportation,  to  the  British 
colonies  in  North-America,  very  large  quantities  of  the  manufacture 
of  Great  Britain  and  Ireland,  and  in  particular  the  staple  articles  of 
woollen,  iron,  and  linen,  also  those  of  cotton,  silk,  leather,  pewter, 
tin,  copper,  and  brass,  with  almost  every  British  manufacture;  also 
large  quantities  of  foreign  linens  and  other  articles  imported  into  these 
kingdoms,  from  Flanders,  Holland,  Germany,  the  East  Countries, 
Portugal,  Spain,  and  Italy,  which  are  generally  received  from  those 
countries  in  return  for  British  manufactures;  and  that  the  petitioners 
have  likewise  exported,  or  sold  for  exportation,  great  quantities  of 
the  various  species  of  goods  imported  into  this  kingdom  from  the  East- 
Indies,  part  of  which  receive  additional  manufacture  in  Great  Britain; 
and  that  the  petitioners  receive  returns  from  North  America  to  this 
kingdom  directly,  viz.  pig  and  bar  iron,  timber,  staves,  naval  stores, 
tobacco,  rice,  indigo,  deer  and  other  skins,  beaver  and  furs,  train  oil, 
whalebone,  bees  wax,  pot  and  pearl  ashes,  drugs,  and  dying  woods, 
with  some  bullion,  and  also  wheat  flour,  Indian  corn  and  salted  pro- 
visions, when,  on  account  of  scarcity  in  Great  Britain,  those  articles 
are  permitted  to  be  imported;  and  that  the  petitioners  receive  returns 
circuitously  from  Ireland  (for  flax  seed,  &c.  exported  from  North 
America)  by  bills  of  exchange  on  the  merchants  of  this  city  trading  to 
Ireland,  for  the  proceeds  of  linens,  &c.  imported  into  these  kingdoms 
from  the  West  Indies;  in  return  for  provisions,  lumber  and  cattle, 
exported  from  North  America,  for  the  use  and  support  of  the  West 
India  islands,  by  bills  of  exchange  on  the  West  India  merchants,  for 
the  proceeds  of  sugar,  molasses,  rum,  cotton,  coffee,  or  other  produce, 
imported  from  those  islands  into  these  kingdoms;  from  Italy,  Spain, 
Portugal,  France,  Flanders,  Germany,  Holland,  and  the  East  Coun- 
tries, by  bills  of  exchange  or  bullion  in  return  for  wheat  flour,  rice, 
Indian  corn,  fish,  and  lumber  exported  from  the  British  colonies  in 
North  America,  for  the  use  of  those  countries;  and  that  the  petitioners 
have  great  reason  to  believe,  from  the  best  informations  they  can 


172  READINGS  IN  ECONOMIC  HISTORY 

obtain,  that  on  the  balance  of  this  extensive  commerce,  there  is  now 
due  from  the  colonies  in  North  America  to  the  said  city  only,  2,000,- 
oool.  sterling,  and  upwards;  and  that,  by  the  direct  commerce  with 
the  colonies,  and  the  circuitous  trade  thereon  depending,  some  thou- 
sands of  ships  and  vessels  are  employed,  and  many  thousands  of 
seamen  are  bred  and  maintained,  thereby  encreasing  the  naval  strength 
and  power  of  Great  Britain;  and  that  in  the  year  1765,  there  was  a 
great  stagnation  of  the  commerce  between  Great  Britain  and  her 
colonies,  in  consequence  of  an  Act  for  granting  and  applying  certain 
stamp-duties  and  other  duties,  in  the  British  colonies  and  planta- 
tions in  America,  by  which  the  merchants  trading  to  North  America, 
and  the  artificers  employed  in  the  various  manufactures  consumed 
in  those  countries,  were  subjected  to  many  hardships;  and  that,  in 
the  following  year,  the  said  Act  was  repealed,  under  an  express  dec- 
laration of  the  legislature,  that  the  continuance  of  the  said  Act  would 
be  attended  with  many  inconveniences  and  might  be  productive  of 
consequences  greatly  detrimental  to  the  commercial  interests  of  these 
kingdoms;  upon  which  repeal,  the  trade  to  the  British  colonies  imme- 
diately resumed  its  former  nourishing  state;  and  that  in  the  year 
1767,  an  Act  passed  for  granting  certain  duties  in  the  British  colonies 
and  plantations  in  America,  which  imposed  certain  duties,  to  be 
paid  in  America,  on  tea,  glass,  red  and  white  lead,  painters'  colours, 
paper,  paste-board,  mill-board,  and  scale-board,  when  the  commerce 
with  the  colonies  was  again  interrupted;  and  that  in  the  year  1770, 
such  parts  of  the  said  Act  as  imposed  duties  on  glass,  red  and  white 
lead,  painters'  colours,  paper,  paste-board,  mill-board,  and  scale- 
board,  were  repealed,  when  the  trade  to  America  soon  revived,  except- 
ing the  article  of  tea,  on  which  a  duty  was  continued,  to  be  demanded 
on  its  importation  into  America,  whereby  that  branch  of  our  com- 
merce was  nearly  lost;  and  that,  in  the  year  1773,  an  Act  passed  to 
allow  a  drawback  of  the  duties  of  customs  on  the  exportation  of  tea 
to  his  Majesty's  colonies  or  plantations  in  America,  and  to  empower 
the  commissioners  of  the  Treasury  to  grant  licenses  to  the  East  India 
Company  to  export  tea,  duty  free;  and  by  the  operations  of  those  and 
other  laws,  the  minds  of  his  Majesty's  subjects  in  the  British  colonies 
have  been  greatly  disquieted,  a  total  stop  is  now  put  to  the  export 
trade  with  the  greatest  and  the  most  important  part  of  North  America, 
the  public  revenue  is  threatened  with  a  large  and  fatal  diminution, 
the  petitioners  with  grievous  distress,  and  thousands  of  industrious 
artificers  and  manufacturers  with  utter  ruin;  under  these  alarming 
circumstances,  the  petitioners  receive  no  small  comfort,  from  a  per- 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        173 

suasion  that  the  representatives  of  the  people,  newly  delegated  to  the 
most  important  of  all  trusts,  will  take  the  whole  of  these  weighty 
matters  into  their  most  serious  consideration;  and  therefore  praying 
the  House,  that  they  will  enter  into  a  full  and  immediate  examination 
of  that  system  of  commercial  policy  which  was  formerly  adopted, 
and  uniformly  maintained  to  the  happiness,  and  advantage  of  both 
countries,  and  will  apply  such  healing  remedies  as  can  alone  restore 
and  establish  the  commerce  between  Great  Britain  and  her  colonies 
on  a  permanent  foundation;  and  that  the  petitioners  may  be  heard 
by  themselves,  or  agents,  in  support  of  the  said  petition." 

F.   Petition  of  West  India  Planters  for  Reconciliation,  1775  l 

The  effects  of  the  non-importation  agreements  of  the  colonists  were  felt  not  only 
by  London  merchants,  but  also  by  West  India  planters,  who  were  deprived  at  the 
same  time  of  needed  supplies  and  of  a  market  for  their  products.  They  also  brought 
pressure  to  bear  upon  Parliament  to  repeal  the  obnoxious  legislation  which  had  led 
to  this  situation. 

Petition  of  the  West  India  Planters  to  the  Commons  respecting  the 
American  Non-Importation  Agreement.  Feb.  2  [1775].  A  Petition 
of  the  planters  of  his  Majesty's  sugar  colonies  residing  in  Great  Britain, 
and  of  the  merchants  of  London  trading  to  the  said  colonies,  was 
presented  to  the  House,  and  read;  setting  forth, 

"That  the  petitioners  are  exceedingly  alarmed  at  an  Agreement 
and  Association  entered  into,  by  the  Congress  held  at  Philadelphia 
in  North  America,  on  the  5th  of  Sept.  1774,  whereby  the  members 
thereof  agreed  and  associated,  for  themselves  and  the  inhabitants  of 
the  several  provinces  lying  between  Nova  Scotia  and  Georgia,  that 
from  and  after  the  ist  of  Sept.  1774,  they  would  not  import  into 
British  America  any  melasses,  syrups,  paneles,  coffee,  or  piemento, 
from  the  British  plantations;  and  that  after  the  loth  of  Sept.  1775, 
if  the  Acts  and  the  parts  of  the  Acts  of  the  British  parliament  therein 
mentioned,  are  not  repealed,  they  would  not  directly,  or  indirectly, 
import  any  merchandize  or  commodity  whatsoever  to  the  West  Indies; 
and  representing  to  the  House  that  the  British  property  in  the  West 
India  islands  amounts  to  upwards  of  30  millions  sterling;  and  that  a 
further  property  of  many  millions  is  employed  in  the  commerce  created 
by  the  said  islands,  a  commerce  comprehending  Africa,  the  East 
Indies  and  Europe;  and  that  the  whole  profits  and  produce  of  these 

1  Parliamentary  History  of  England.  By  Hansard  (London,  1813),  XVIII, 
219-221. 


174  READINGS  IN  ECONOMIC  HISTORY 

capitals  ultimately  center  in  Great  Britain,  and  add  to  the  national 
wealth,  while  the  navigation  necessary  to  all  its  branches,  establishes 
a  strength  which  wealth  can  neither  purchase  nor  balance;  and  that 
the  sugar  plantations  in  the  West  Indies  are  subject  to  a  greater  variety 
of  contingencies  than  many  other  species  of  property,  from  their 
necessary  dependence  on  external  support;  and  that  therefore,  should 
any  interruption  happen  in  the  general  system  of  their  commerce, 
the  great  national  stock  thus  vested  and  employed  must  become  un- 
profitable and  precarious ;  and  that  the  profits  arising  from  the  present 
state  of  the  said  islands,  and  that  are  likely  to  arise  from  their  future 
improvement,  in  a  great  measure  depend  on  a  free  and  reciprocal 
intercourse  between  them  and  the  several  provinces  of  North  America, 
from  whence  they  are  furnished  with  provisions  and  other  supplies 
absolutely  necessary  for  their  support  and  the  maintenance  of  their 
plantations;  and  that  the  scarcity  and  high  price,  in  Great  Britain 
and  other  parts  of  Europe,  of  those  articles  of  indispensible  necessity 
which  they  now  derive  from  the  middle  colonies  of  America,  and  the 
inadequate  population  in  some  parts  of  that  continent,  with  the  dis- 
tance, danger,  and  uncertainty,  of  the  navigation  from  others,  forbid 
the  petitioners  to  hope  for  a  supply  in  any  degree  proportionate  to 
their  wants;  and  that,  if  the  first  part  of  the  said  Agreement  and 
Association  for  a  non-importation  hath  taken  place,  and  shall  be 
continued,  the  same  will  be  highly  detrimental  to  the  sugar  colonies; 
and  that,  if  the  second  part  of  the  said  Agreement  and  Association 
for  a  non-exportation  shall  be  carried  into  execution,  which  the  peti- 
tioners do  firmly  believe  will  happen,  unless  the  harmony  that  sub- 
sisted a  few  years  ago  between  this  kingdom  and  the  provinces  of 
America,  to  the  infinite  advantage  of  both,  be  restored,  the  islands, 
which  are  supplied  with  most  of  their  subsistence  from  thence,  will 
be  reduced  to  the  utmost  distress,  and  the  trade  between  all  the  islands 
and  this  kingdom  will  of  course  be  obstructed,  to  the  diminution  of  the 
public  revenue,  to  the  extreme  injury  of  a  great  number  of  planters, 
and  to  the  great  prejudice  of  the  merchants,  not  only  by  the  said 
obstruction,  but  also  by  the  delay  of  payment  of  the  principal  and 
interest  of  an  immense  debt  due  from  the  former  to  the  latter;  and 
therefore  praying  the  House,  to  take  into  their  most  serious  consid- 
eration that  great  political  system  of  the  colonies  heretofore  so  very 
beneficial  to  the  mother  country  and  her  dependencies,  and  adopt 
such  measures  as  to  them  shall  seem  meet,  to  prevent  the  evils  with 
which  the  petitioners  are  threatened,  and  to  preserve  the  intercourse 
between  the  West  India  islands  and  the  northern  colonies,  to  the 


CAUSES  AND   CONDUCT  OF  THE   REVOLUTION        175 

general  harmony  and  lasting  benefit  of  the  whole  British  empire;  and 
that  they  may  be  heard,  by  themselves,  their  agents,  or  counsel,  in 
support  of  their  Petition." 

Ordered  to  be  referred  to  the  consideration  of  the  committee  on 
the  Petition  of  the  merchants  of  London,  concerned  in  the  commerce 
of  North  America. 


III.   CONTINENTAL  PAPER  MONEY 

A.   Continental  Paper  Money,  1775-1780  l 

When  the  Revolution  began  the  Continental  Congress  had  no  authority  to  levy 
taxes,  nor  power  to  borrow  money  by  issuing  bonds.  It  was  therefore  compelled  to 
resort  to  the  issue  of  paper  money  as  practically  the  only  financial  resource  at  their 
command.  Under  the  pressure  of  their  necessities,  however,  they  issued  too  much, 
and  as  soon  as  it  was  overissued  it  began  to  depreciate,  until  finally  it  became  worth- 
less and  was  ultimately  repudiated.  A  defense  by  Franklin  of  the  use  of  this 
continental  currency  is  here  given. 

Much  conversation  having  arisen  lately  on  the  subject  of  this 
money,  and  few  persons  being  well  acquainted  with  the  nature  of  it, 
you  may  possibly  oblige  many  of  your  readers  by  the  following  account 
of  it. 

When  Great  Britain  commenced  the  present  war  upon  the  colonies, 
they  had  neither  arms  nor  ammunition,  nor  money  to  purchase  them 
or  to  pay  soldiers.  The  new  government  had  not  immediately  the 
consistence  necessary  for  collecting  heavy  taxes;  nor  would  taxes 
that  could  be  raised  within  the  year  during  peace,  have  been  sufficient 
for  a  year's  expense  in  time  of  war;  they  therefore  printed  a  quantity 
of  paper  bills,  each  expressing  to  be  of  the  value  of  a  certain  number 
of  Spanish  dollars,  from  one  to  thirty;  with  these  they  paid,  clothed, 
and  fed  their  troops,  fitted  out  ships,  and  supported  the  war  during 
five  years  against  one  of  the  most  powerful  nations  of  Europe. 

The  paper  thus  issued,  passed  current  in  all  the  internal  commerce 
of  the  United  States  at  par  with  silver  during  the  first  year;  supplying 
the  place  of  the  gold  and  silver  formerly  current,  but  which  was  sent 
out  of  the  country  to  purchase  arms,  &c.,  or  to  defray  expenses  of 
the  army  in  Canada ;  but  the  great  number  of  troops  necessary  to  be 
kept  on  foot  to  defend  a  coast  of  near  five  hundred  leagues  in  length, 
from  an  enemy,  who,  being  masters  at  sea,  could  land  troops  where 


1  Of  the  Paper  Money  of  the  United  States  of  America.     By  Benjamin  Franklin. 
In  Works  (Sparks  edition,  Boston,  1840),  II,  42 1-4. 


176  READINGS  IN  ECONOMIC  HISTORY 

they  pleased,  occasioned  such  a  demand  for  money,  and  such  frequent 
additional  emissions  of  new  bills,  that  the  quantity  became  much 
greater  than  was  wanted  for  the  purposes  of  commerce;  and,  the 
commerce  being  diminished  by  the  war,  the  surplus  quantity  of  cash 
was  by  that  means  also  proportionately  augmented. 

It  has  been  long  and  often  observed,  that  when  the  current  money 
of  a  country  is  augmented  beyond  the  occasions  for  money,  as  a 
medium  of  commerce,  its  value  as  money  diminishes.  .  .  . 

.  .  .  Paper  money  not  being  easily  received  out  of  the  country 
that  makes  it,  if  the  quantity  becomes  excessive,  the  depreciation  is 
quicker  and  greater. 

Thus  the  excessive  quantities  which  necessity  obliged  the  Ameri- 
cans to  issue  for  continuing  the  war,  occasioned  a  depreciation  of 
value,  which,  commencing  towards  the  end  of  1776,  has  gone  on 
augmenting,  till  at  the  beginning  of  the  present  year,  fifty,  sixty, 
and  as  far  as  seventy  dollars  in  paper  were  reckoned  not  more  than 
equal  to  one  dollar  in  silver,  and  the  prices  of  all  things  rose  in 
proportion.  .  .  . 

The  general  effect  of  the  depreciation  among  the  inhabitants  of 
the  States  has  been  this,  that  it  has  operated  as  a  gradual  tax  upon 
them,  their  business  has  been  done  and  paid  for  by  the  paper  money, 
and  every  man  has  paid  his  share  of  the  tax  according  to  the  time  he 
retained  any  of  the  money  in  his  hands,  and  to  the  depreciation  within 
that  time.  Thus  it  has  proved  a  tax  on  money,  a  kind  of  property 
very  difficult  to  be  taxed  in  any  other  mode;  and  it  has  fallen  more 
equally  than  many  other  taxes,  as  those  people  paid  most,  who,  being 
richest,  had  most  money  passing  through  their  hands. 


B.   Depreciation  of  Continental  Paper  Money,  1775-1779 l 

The  following  table  of  depreciation  by  Thomas  Jefferson  shows  that  the  de- 
preciation did  not  begin  until  the  year  1777,  and  after  $14,000,000  had  been  issued. 
After  that,  however,  it  went  on  rapidly  as  a  result  of  the  great  overissue  by  Con- 
gress, until  the  last  emission  brought  in  only  25  cents  for  every  $1.00  issued. 


1  Quoted  in  Historical  Sketches  of  American  Paper  Currency,  Second  Series. 
By  Henry  Phillips  (Roxbury,  1866),  199. 


CAUSES   AND   CONDUCT  OF  THE   REVOLUTION        177 

DEPRECIATION   OF  THE   CONTINENTAL  CURRENCY 

Jefferson's  Table  of  Emissions 


Emissions 

Sum  Emitted 

Depreciation 

Worth  of  the  Sum  Emitted 
in  Silver  Dollars 

T77C      TlinP    23 

$  2,000,000 

$2,000,000 

1  /  IJ>  J  ullc   ^O 

Nov.  20 

3,000,000 

3,000  ooo 

T77fi     Ffb     17 

4,000,000 

4,000  ooo 

*  /  I*-*)  •*•  tlj«   *•  1 
Auff     11 

5,000,000 

5  ,000  ooo 

'VU6-    *-O 

1777,  May  20 

5,000,000 

2,  2,  3 

1,877,273 

Aug.  15 

1,000,000 

3 

333,3331 

Nov.  7 

1,000,000 

4 

250,000 

Dec.  3 

1,000,000 

4 

250,000 

1778,  Jan.  8 

1,000,000 

4 

250,000 

Jan.  22 

2,000,000 

4 

500,000 

Feb.  1  6 

2,000,000 

5 

400,000 

Mar.  5 

2,000,000 

5 

400,000 

April  4 

1,000,000 

6 

i66,666f 

April  ii 

5,000,000 

6 

833,3335 

April  18 

500,000 

6 

83,333f 

May  22 

5,000,000 

5 

1,000,000 

June  20 

5,000,000 

4 

1,250,000 

July  30 

5,000,000 

4^ 

i,  in,  in 

Sept.  5 

5,000,000 

5 

1,000,000 

Sept.  26 

10,000,100 

5 

2,000,020 

Nov.  4 

10,000,100 

6 

1,666,683^ 

Dec.  14 

10,000,100 

6 

1,666,683! 

1779,  Jan.  14 

24,447,620* 

8 

3,05S,952| 

Feb.  3 

5,000,160 

10 

500,016 

Feb.  12 

5,000,160 

10 

500,016 

April  2 

5,000,160 

17 

294,127 

May  5 

10,000,100 

24 

416,670! 

June  4 

10,000,100 

20 

500,005 

June  17 

15,000,280 

2O 

75°,oi4_ 

Sept.  17 

15,000,260 

24 

625,010! 

Oct.  14 

5,000,180 

3° 

166,672! 

Nov.  17 

10,050,540 

381 

261,053 

Nov.  29 

10,000,140 

3»l 

259,743 

$200,000,000 

$36,367,719! 

*  The  sum  actually  voted  was  $50,000,400,  but  part  of  it  was  for  exchange  of 
old  bills,  without  saying  how  much.  It  is  presumed  that  these  exchanges  absorbed 
$25> 552, 780,  because  $24,447,620  with  all  the  other  emissions  preceding  September 
2,  1779,  will  amount  to  $159,948,880,  the  sum  which  Congress  declared  to  be  then 
in  circulation. 


1 78 


C.   Effects  of  Continental  Paper  Money, 


The  economic  and  social  effects  of  the  depreciation  of  the  continental  paper 
money  in  South  Carolina  are  here  pictured.  This  may  be  accepted  as  typical  of 
conditions  in  all  the  colonies  during  this  period. 

That  the  money  should  finally  sink,  or  that  it  should  be  redeemed 
by  a  scale  of  depreciation,  were  events  neither  forseen  nor  expected 
by  the  bulk  of  the  people.  The  Congress  and  the  local  Legislatures, 
for  the  first  five  years  of  the  war,  did  not  entertain  the  most  distant 
idea  of  such  a  breach  of  public  faith.  The  generality  of  the  friends 
of  the  revolution,  reposing  unlimited  confidence  in  the  integrity  of 
their  rulers,  the  plighted  faith  of  government,  and  the  success  of  the 
cause  of  America,  amused  themselves  with  the  idea  that  in  a  few  years 
their  paper  dollars,  under  the  influence  of  peace  and  independence, 
would  be  sunk  by  equal  taxes  or  realized  into  silver  at  their  nominal 
value;  and  that,  therefore,  the  sellers  wrould  ultimately  increase  their 
estates  in  the  same  proportion  that  the  currency  had  depreciated. 
The  plunderings  and  devastations  of  the  enemy  made  several 
think  that  their  property  would  be  much  safer,  when  turned  into 
money,  than  when  subject  to  the  casualties  of  war.  The  disposition 
to  sell  was  in  a  great  degree  proportioned  to  the  confidence  in  the 
justice  and  final  success  of  the  revolution,  superadded  to  expectations 
of  a  speedy  termination  of  the  war.  The  most  sanguine  Whigs  were, 
therefore,  oftenest  duped  by  the  fallacious  sound  of  high  prices. 
These  principles  operated  so  extensively  that  the  property  of  the  in- 
habitants, in  a  considerable  degree,  changed  its  owners.  Many 
opulent  persons,  of  ancient  families,  were  ruined  by  selling  paternal 
estates  for  a  depreciating  paper  currency,  which,  in  a  few  weeks, 
would  not  replace  half  of  the  real  property  in  exchange  for  which  it 
was  obtained.  Many  bold  adventurers  made  fortunes  in  a  short 
time  by  running  in  debt  beyond  their  abilities.  Prudence  ceased  to  be 
a  virtue,  and  rashness  usurped  its  place.  The  warm  friends  of 
America,  who  never  despaired  of  their  country,  and  who  cheerfully 
risked  their  fortunes  in  its  support,  lost  their  property;  while  the 
timid,  who  looked  forward  to  the  re-establishement  of  British  govern- 
ment, not  only  saved  their  former  possessions,  but  often  increased 
them.  In  the  American  revolution,  for  the  first  time,  the  friends  of 
the  successful  party  were  the  losers. 


1  The  History  of  South  Carolina.     By  David  Ramsay.     (Written  1808.     Pub- 
lished, Newberry,  S.  C.,  1858),  98,  102. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        179 

The  enthusiasm  of  the  Americans,  and  their  confidence  in  the 
money,  gave  the  Congress  the  same  advantage  in  carrying  on  the 
war  which  old  countries  derive  from  the  anticipation  of  their  per- 
manent funds.  It  would  have  been  impossible  to  have  kept  together 
an  American  army  for  so  many  years  without  this  paper  expedient. 
Though  the  bills  of  credit  operated  as  a  partial  tax  on  the  monied 
interest,  and  ruined  many  individuals,  yet  it  was  productive  of  great 
national  benefits  by  enabling  the  popular  leaders  to  carry  on  a  neces- 
sary defensive  war.  .  .  . 

The  paper  currency  continued  to  have  a  partial  circulation  in 
the  northern  States  for  a  year  after  a  scale  of  depreciation  was  fixed. 
It  gradually  diminished  in  value  till  the  summer  of  1781.  By  com- 
mon consent,  it  then  ceased  to  have  any  currency.  Like  an  aged 
man,  expiring  by  the  decays  of  nature  without  a  sigh  or  a  groan,  it 
gently  fell  asleep  in  the  hands  of  its  last  possessors,  and  continued 
so  for  ten  years;  when  the  Congress  paper  dollars  were  funded  at  the 
rate  of  100  for  one  of  silver. 


D.   Issues  of  Paper  Money  by  the  States,  1781-1788  l 

After  the  disappearance  of  the  continental  paper  money  from  circulation,  seven 
of  the  states,  under  the  plea  of  necessity,  plunged  afresh  into  paper  money  emissions 
during  the  years  1781  to  1788.  The  history  of  these  issues  was  the  same  as  that 
of  the  continental  currency  —  overissue,  depreciation,  and  disturbance  of  trade. 
A  vivid  picture  of  the  effects  in  two  of  the  states  is  drawn  for  us  by  Brissot  de  War- 
ville,  a  French  traveler  of  liberal  views,  who  usually  had  only  words  of  praise  for 
things  American. 

The  port  of  Newport  is  considered  as  one  of  the  best  in  the  United 
States.  The  bottom  is  good,  the  harbour  capable  of  receiving  the 
largest  ships,  and  seems  destined  by  nature  to  be  of  great  consequence. 
This  place  was  one  of  the  principal  scenes  of  the  last  war.  The 
successive  arrival  of  the  American,  English,  and  French  armies,  left 
here  a  considerable  quantity  of  money.2 

Since  the  peace  every  thing  is  changed.3  The  reign  of  solitude 
is  only  interrupted  by  groups  of  idle  men,  standing  with  folded  arms 
at  the  corners  of  the  streets;  houses  falling  to  ruin;  miserable  shops, 

1  New  Travels  in  the  United  States  of  America.     By  Jean  Pierre  Brissot  de 
Warville  (Dublin,  1792),  144-7,  176-8. 

2  The  English  destroyed  all  the  fine  trees  of  ornament  and  fruit:   they  took 
a  pleasure  in  devastation. 

3  This  town  owed  a  part  of  its  prosperity  to  the  slave  trade,  which  is  at  present 
suppressed. 


i8o  READINGS  IN  ECONOMIC  HISTORY 

which  present  nothing  but  a  few  coarse  stuffs,  or  baskets  of  apples, 
and  other  articles  of  little  value;  grass  growing  in  the  public  square, 
in  front  of  the  court  of  justice;  rags  stuffed  in  the  windows,  or  hung 
upon  hideous  women  and  lean  unquiet  children. 

Every  thing  announces  misery,  the  triumph  of  ill  faith,  and  the 
influence  of  a  bad  government.  .  .  . 

At  Newport  the  people,  deceived  by  two  or  three  knaves,  have 
brought  on  their  own  misery,  and  destroyed  the  blessings  which  Na- 
ture had  lavished  upon  them.  They  have  themselves  sanctioned 
fraud;  and  this  act  has  rendered  them  odious  to  their  neighbors, 
driven  commerce  from  their  doors,  and  labour  from  their  fields. 

Read  again,  my  friend,  the  charming  description  given  of  this 
town  and  this  State,  by  M.  de  Crevecoeur.1  It  is  not  exaggerated. 
Every  American  whom  I  have  questioned  on  this  subject,  has  described 
to  me  its  ancient  splendor,  and  its  natural  advantages,  whether  for 
commerce,  agriculture;  or  the  enjoyments  of  life. 

The  State  of  Rhode  Island  will  never  again  see  those  happy  days, 
till  they  take  from  circulation  their  paper  money,  and  reform  their 
government. 

.  .  .  but  this  State  [New  Jersey]  is  ravaged  by  a  political  scourge, 
more  terrible  than  either;  it  is  paper  money.  This  paper  is  still, 
in  New  Jersey,  what  the  people  call  a  legal  tender,  that  is,  you  are 
obliged  to  receive  it  at  its  nominal  value,  as  a  legal  payment. 

I  saw,  in  this  journey,  many  inconveniences  resulting  from  this 
fictitious  money.  It  gives  birth  to  an  infamous  kind  of  traffic,  that 
of  buying  and  selling  it,  by  deceiving  the  ignorant;  a  commerce 
which  discourages  industry,  corrupts  the  morals,  and  is  a  great 
detriment  to  the  public.  This  kind  of  stock-jobber  is  the  enemy  to 
his  fellow-citizens.  He  makes  a  science  of  deceiving;  and  this  science 
is  extremely  contagious.  It  introduces  a  general  distrust.  A  person 
can  neither  sell  his  land,  nor  borrow  money  upon  it;  for  sellers  and 
lenders  may  be  paid  in  a  medium  which  may  still  depreciate,  they  know 
not  to  what  degree  it  may  depreciate.  A  friend  dares  not  trust  his 
friend.  Instances  of  perfidy  of  this  kind  have  been  known,  that  are 
horrible.  Patriotism  is  consequently  at  an  end,  cultivation  lan- 
guishes, and  commerce  declines.  How  is  it  possible,  said  I  to  Mr. 
Livingston,  that  a  country,  so  rich,  can  have  recourse  to  paper  money? 
New  Jersey  furnishes  productions  in  abundance  to  New  York  and 


1  Letters  from  an  American  Farmer  (1770-1781).     By  St.  John  de  Crevecoeur 
(London,  1782). —  Ed. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        181 

Philadelphia.  She  draws  money,  then,  constantly  from  those  places; 
she  is  their  creditor.  And  shall  a  creditor  make  use  of  a  resource 
which  can  be  proper  only  for  a  miserable  debtor;  How  is  it  that  the 
members  of  your  legislature  have  not  made  these  reflections?  The 
reason  of  it  is  very  simple,  replied  he:  At  the  close  of  the  rtiinous 
war,  that  we  have  experienced,  the  greater  part  of  our  citizens  were 
burdened  with  debts.  They  saw  in  this  paper  money,  the  means  of 
extricating  themselves;  and  they  had  influence  enough  with  their 
representatives  to  force  them  to  create  it.  —  But  the  evil  falls  at  length 
on  the  authors  of  it,  said  I ;  they  must  be  paid  themselves,  as  well  as 
pay  others,  in  this  same  paper;  why  do  they  not  see  that  it  dis- 
honours their  country,  that  it  ruins  all  kinds  of  honest  industry,  and 
corrupts  the  morals  of  the  people ;  Why  do  they  not  repeal  this  legal 
tender?  A  strong  interest  opposes  it,  replied  he,  of  stock-jobbers  and 
speculators.  They  wish  to  prolong  this  miserable  game,  in  which 
they  are  sure  to  be  the  winners,  though  the  ruin  of  their  country 
should  be .  the  consequence.  We  expect  relief  only  from  the  new 
situation,  which  takes  away  from  the  States  the  power  of  making 
paper-money.  All  honest  people  wish  the  extinction  of  it,  when 
silver  and  gold  would  reappear;  and  our  national  industry  would  soon 
repair  the  ravages  of  the  war. 

IV.   SOCIAL  EFFECTS  OF  THE  REVOLUTION 

Views  of  a  Contemporary,  17 75- 17 #3  * 

Whatever  else  it  may  involve  war  always  brings  changes;  it  throws  men  out  of 
their  accustomed  callings  and  makes  new  demands  upon  them.  The  Wax  of  the 
Revolution,  which  severed  the  political  ties  with  England  and  introduced  a  new 
government,  which  interrrupted  the  ordinary  lines  of  trade  and  disorganized 
business  by  the  introduction  of  a  depreciating  paper  money,  had  particularly  marked 
effects.  These  are  described  by  Ramsay,  a  physician  of  South  Carolina,  and  a  very 
able  and  judicious  observer  of  contemporary  events. 

The  American  revolution,  on  the  one  hand,  brought  forth  great 
vices;  but  on  the  other  hand,  it  called  forth  many  virtues,  and  gave 
occasion  for  the  display  of  abilities  which,  but  for  that  event,  would 
have  been  lost  to  the  world.  When  the  war  began,  the  Americans 
were  a  mass  of  husbandmen,  merchants,  mechanics  and  fishermen; 
but  the  necessities  of  the  country  gave  a  spring  to  the  active  powers 
of  the  inhabitants,  and  set  them  on  thinking,  speaking  and  acting, 

1  The  History  of  the  American  Revolution.  By  David  Ramsay  (Philadelphia, 
1789),  II,  315-6. 


182  READINGS  IN  ECONOMIC  HISTORY 

in  a  line  far  beyond  that  to  which  they  had  been  accustomed.  The 
difference  between  nations  is  not  so  much  owing  to  nature,  as  to 
education  and  circumstances.  While  the  Americans  were  guided  by 
the  leading  strings  of  the  mother  country,  they  had  no  scope  nor 
encouragement  for  exertion.  All  the  departments  of  government 
were  established  and  executed  for  them,  but  not  by  them.  In  the 
years  1775  and  1776  the  country,  being  suddenly  thrown  into  a 
situation  that  needed  the  abilities  of  all  its  sons,  these  generally  took 
their  places,  each  according  to  the  bent  of  his  inclination.  As  they 
severally  pursued  their  objects  with  ardor,  a  vast  expansion  of  the 
human  mind  speedily  followed.  This  displayed  itself  in  a  variety 
of  ways.  It  was  found  that  their  talents  for  great  stations  did  not 
differ  in  kind,  but  only  in  degree,  from  those  which  were  necessary 
for  the  proper  discharge  of  the  ordinary  business  of  civil  society.  .  .  . 

...  It  seemed  as  if  the  war  not  only  required,  but  created 
talents.  Men  whose  minds  were  warmed  with  the  love  of  liberty, 
and  whose  abilities  were  improved  by  daily  exercise,  and  sharpened 
with  a  laudable  ambition  to  serve  their  distressed  country,  spoke, 
wrote,  and  acted,  with  an  energy  far  surpassing  all  expectations 
which  could  be  reasonably  founded  on  their  previous  acquirements. 

The  Americans  knew  but  little  of  one  another,  previous  to  the 
revolution.  Trade  and  business  had  brought  the  inhabitants  of 
their  seaports  acquainted  with  each  other,  but  the  bulk  of  the  people 
in  the  interior  country  were  unacquainted  with  their  fellow  citizens. 
A  continental  army,  and  a  Congress  composed  of  men  from  all  the 
States,  by  freely  mixing  together,  were  assimilated  into  one  mass. 
Individuals  of  both,  mingling  with  the  citizens,  disseminated  prin- 
ciples of  union  among  them.  Local  prejudices  abated.  By  frequent 
collision  asperities  were  worn  off,  and  a  foundation  was  laid  for  the 
establishment  of  a  nation,  out  of  discordant  materials.  Intermar- 
riages between  men  and  women  of  different  States  were  much  more 
common  than  before  the  war,  and  became  an  additional  cement  to 
the  union.  Unreasonable  jealousies  had  existed  between  the  inhab- 
itants of  the  eastern  and  of  the  southern  States;  but  on  becoming 
better  acquainted  with  each  other,  these  in  a  great  measure  subsided. 
A  wiser  policy  prevailed.  Men  of  liberal  minds  led  the  way  in  dis- 
couraging local  distinctions,  and  the  great  body  of  the  people,  as 
soon  as  reason  got  the  better  of  prejudice,  found  that  their  best 
interests  would  be  most  effectually  promoted  by  such  practices  and 
sentiments  as  were  favourable  to  union.  Religious  bigotry  had 
broken  in  upon  the  peace  of  various  sects,  before  the  American  war. 


CAUSES  AND   CONDUCT  OF  THE  REVOLUTION        183 

This  was  kept  up  by  partial  establishments,  and  by  a  dread  that 
the  church  of  England  through  the  power  of  the  mother  country, 
would  be  made  to  triumph  over  all  other  denominations.  These 
apprehensions  were  done  away  by  the  revolution.  .  .  .  The  world 
will  soon  see  the  result  of  an  experiment  in  politics,  and  be  able  to 
determine  whether  the  happiness  of  society  is  increased  by  religious 
establishments,  or  diminished  by  the  want  of  them. 

Though  schools  and  colleges  were  generally  shut  up  during  the 
war,  yet  many  of  the  arts  and  sciences  were  promoted  by  it.  The 
Geography  of  the  United  States  before  the  revolution  was  but  little 
known;  but  the  marches  of  the  armies,  and  the  operations  of  war, 
gave  birth  to  many  geographical  enquiries  and  discoveries,  which 
otherwise  would  not  have  been  made.  .  .  .  The  necessities  of  the 
States  led  to  the  study  of  Tactics,  Fortification,  Gunnery,  and  a 
variety  of  other  arts  connected  with  war,  and  diffused  a  knowledge 
of  them  among  a  peaceable  people,  who  would  otherwise  have  had 
no  inducement  to  study  them.  .  .  . 

The  science  of  government,  has  been  more  generally  diffused 
among  the  Americans  by  means  of  the  revolution.  The  policy  of 
Great  Britain,  in  throwing  them  out  of  her  protection,  induced  a 
necessity  of  establishing  independent  constitutions.  This  led  to 
reading  and  reasoning  on  the  subject.  The  many  errors  that  were 
at  first  committed  by  unexperienced  statesmen,  have  been  a  practical 
comment  on  the  folly  of  unbalanced  constitutions,  and  injudicious 
laws.  .  .  . 

When  Great  Britain  first  began  her  encroachments  on  the  colonies, 
there  were  few  natives  of  America  who  had  distinguished  themselves 
as  speakers  or  writers,  but  the  controversy  between  the  two  countries 
multiplied  their  number.  .  .  . 

.  .  .  Such  have  been  some  of  the  beneficial  effects,  which  have 
resulted  from  that  expansion  of  the  human  mind,  which  has  been 
produced  by  the  revolution,  but  these  have  not  been  without  alloy. 

To  overset  an  established  government  unhinges  many  of  those 
principles,  which  bind  individuals  to  each  other.  A  long  time,  and 
much  prudence,  will  be  necessary  to  reproduce  a  spirit  of  union  and 
that  reverence  for  government,  without  which  society  is  a  rope  of 
sand.  The  right  of  the  people  to  resist  their  rulers,  when  invading 
their  liberties,  forms  the  corner  stone  of  the  American  republics. 
This  principle,  though  just  in  itself,  is  not  favourable  to  the  tran- 
quillity of  present  establishments.  The  maxims  and  measures, 
which  in  the  years  1774  and  1775  were  successfully  inculcated  and 


1 84  READINGS  IN  ECONOMIC  HISTORY 

adopted  by  American  patriots,  for  oversetting  the  established 
government,  will  answer  a  similar  purpose  when  recurrence  is  had 
to  them  by  factious  demagogues,  for  disturbing  the  freest  govern- 
ments that  were  ever  devised. 

War  never  fails  to  injure  the  morals  of  the  people  engaged  in  it. 
The  American  war,  in  particular,  had  an  unhappy  influence  of  this 
kind.  Being  begun  without  funds  or  regular  establishments,  it  could 
not  be  carried  on  without  violating  private  rights ;  and  in  its  progress, 
it  involved  a  necessity  for  breaking  solemn  promises,  and  plighted 
public  faith.  The  failure  of  national  justice,  which  was  in  some 
degree  unavoidable,  increased  the  difficulties  of  performing  private 
engagements,  and  weakened  that  sensibility  to  the  obligations  of 
public  and  private  honor,  which  is  a  security  for  the  punctual  per- 
formance of  contracts.  .  .  . 

On  the  whole,  the  literary,  political,  and  military  talents  of  the 
citizens  of  the  United  States  have  been  improved  by  the  revolution, 
but  their  moral  character  is  inferior  to  what  it  formerly  was.  So 
great  is  the  change  for  the  worse,  that  the  friends  of  public  order 
are  loudly  called  upon  to  exert  their  utmost  abilities,  in  extirpating 
their  vicious  principles  and  habits,  which  have  taken  deep  root  during 
the  late  convulsions. 


CHAPTER  VI 

AMERICAN  COMMERCE  AND  COMMERCIAL  POLICY, 

1783-1812 

I.  EFFORTS  TO  SECURE  A  COMMERCIAL  TREATY  WITH  ENGLAND 

A.  England  should  not  make  a  Commercial  Treaty  with  the  United 

States,  1783  : 

After  peace  was  declared  and  political  independence  was  secured,  the  first 
question  that  presented  itself  to  the  new  nation  was  that  of  the  terms  upon  which  she 
would  carry  on  trade  with  other  nations.  The  United  States  desired  to  make 
commercial  treaties  with  other  nations  guaranteeing  reciprocal  commercial  privi- 
leges, and  endeavored,  though  unsuccessfully,  to  incorporate  some  such  provisions 
in  the  treaty  of  peace  with  England.  Pitt,  who  had  just  become  prime  minister, 
tried  in  turn  to  secure  the  adoption  of  a  treaty  that  would  grant  freedom  of  trade 
between  the  United  States  and  the  British  colonies  as  well  as  Great  Britain.  It  was 
against  this  proposal  that  Lord  Sheffield  wrote  his  well-known  book,  urging  that  no 
action  be  taken,  as  the  Americans  must  buy  of  England  in  any  case. 

We  are  told  it  is  proper  to  court  the  trade  with  the  American 
States,  but  their  treaties  with  France  and  Holland  in  direct  terms 
forbid  our  being  put  on  a  better  footing  than  those  countries.2 

The  state  of  our  manufactures  make  it  unnecessary,  and  nothing 
can  be  more  weak  than  the  idea  of  courting  commerce.3  America 

1  Observations  on  the  Commerce  of  the  American  States.     By  Lord  John  Sheffield 
(ist  edition,  London,  1783),  59-70,  passim. 

2  Article  II,  of  the  Treaty  of  Commerce  between  France  and  the  United 
States  of  America,  "  The  most  Christian  King  and  the  United  States  engage 
mutually  not  to  grant  any  particular  favour  to  other  nations,  in  respect  of 
commerce  and  navigation,  which  shall  not  immediately  become  common  to  the 
other  party,  who  shall  enjoy  the  same  favour  freely." 

3  By  ineffectual  and  unnecessary  attempts  to  court  American  commerce, 
we  shall  disgust  nations  with  whom  we  have  great  intercourse,  and  prejudice 
the  best  trade  we  have.     Our  exports  to  the  Baltic  and  the  countries  North  of 
Holland  are  equal  to  what  our  exports  to  the  American  States  were  at  any  time, 
and  more  real  British  shipping  has  been  employed  to  the  North,  than  had  ever 
been  employed  to  the  American  States.     Before  the  war,  very  few  British  ships 
went  to  the  ports  north  of  Philadelphia;  they  went  principally  to  the  Southern 
States.   . 


1 86  READINGS  IN  ECONOMIC  HISTORY 

will  have  from  us  what  she  cannot  get  cheaper  and  better  elsewhere, 
and  she  will  sell  to  us  what  we  want  from  her  as  cheap  as  she  will  to 
others.  .  .  .  The  truth  is,  we  want  little  of  her  produce  in  Great- 
Britain,  coarse  tobacco  excepted.  The  finest  tobacco  grows  in  the 
islands,  and  in  South  America.  The  indigo  of  the  islands  and  of 
South  America  is  infinitely  better  than  that  of  North  America,  but 
we  must  take  that  and  naval  stores,  and  other  articles  from  the 
American  States  which  may  be  got  as  good  or  better  elsewhere,  in 
return  for  our  manufactures,  instead  of  money.  In  payment,  for 
want  of  other  sufficient  returns,  large  quantities  of  tobacco  must 
come  to  Great-Britain,  and  we  can  afford  to  give  the  best  price  for 
it,  by  taking  it  in  exchange  for  our  manufactures.  .  .  . 

Instead  of  exaggerating  the  loss  suffered  by  the  dismemberment 
of  the  empire,  our  thoughts  may  be  employed  to  more  advantage 
in  considering  what  our  situation  really  is,  and  the  greatest  advantage 
that  can  be  derived  from  it.  It  will  be  found  better  than  we  expect, 
nor  is  the  independence  of  the  American  States,  notwithstanding 
their  connection  with  France,  likely  to  interfere  with  us  so  essentially 
as  has  been  apprehended,  except  as  to  the  carrying  trade,  the  nursery 
for  seamen.  The  carriage  of  our  produce  is  nothing  in  comparison 
with  that  of  America;  a  few  tobacco  ships  will  carry  back  as  much 
of  our  manufactures  as  all  the  American  States  will  consume.  We 
must  therefore  retain  the  carrying  trade  wherever  we  possibly  can.  — 
But  the  demand  for  our  manufactures  will  continually  encrease  with 
the  population  of  America.  Those  who  have  been  disposed  to  de- 
spond may  comfort  themselves  with  the  prospect,  that  if  the  American 
States  should  hereafter  be  able  to  manufacture  for  themselves,  as  the 
consumption  of  the  manufactures  of  England  decreases  with  them, 
the  demand  will  encrease  elsewhere;  .  .  . 

If  manufacturers  should  emigrate  from  Europe  to  America,  at 
least  nine- tenths  will  become  farmers;  they  will  not  work  at  manu- 
factures when  they  can  get  double  the  profit  by  farming. 

No  American  articles  are  so  necessary  to  us,  as  our  manufactures, 
&c.,  are  to  the  Americans,  and  almost  every  article  of  the  produce 
of  the  American  States,  which  is  brought  into  Europe,  we  may  have 
at  least  as  good  and  as  cheap,  if  not  better,  elsewhere.  Both  as  a 
friend  and  an  enemy  America  has  been  burthensome  to  Great  Britain. 
It  may  be  some  satisfaction  to  think,  that  by  breaking  off  rather 
prematurely,  Great  Britain  may  find  herself  in  a  better  situation  in 
respect  to  America,  than  if  she  had  fallen  off  when  more  ripe.  .  .  . 

It  will  not  be  an  easy  matter  to  bring  the  American  States  to  act 


AMERICAN  COMMERCE   AND   COMMERCIAL  POLICY     187 

as  a  nation;  they  are  not  to  be  feared  as  such  by  us.  It  must  be  a 
long  time  before  they  can  engage,  or  will  concur  in  any  material 
expence.  A  Stamp  act,  a  Tea  act,  or  such  act  that  never  can  again 
occur,  could  alone  unite  them;  their  climate,  their  staples,  their 
manners,  are  different;  their  interests  opposite;  and  that  which  is 
beneficial  to  one  is  destructive  to  the  other.  In  short,  every  circum- 
stance proves  that  it  will  be  extreme  folly  to  enter  into  any  engage- 
ments, by  which  we  may  not  wish  to  be  bound  hereafter.  It  is 
impossible  to  name  any  material  advantage  the  American  States  will, 
or  can  give  us  in  return,  more  than  what  we  of  course  shall  have. 
No  treaty  can  be  made  with  the  American  States  that  can  be  binding 
on  the  whole  of  them.  The  act  of  Confederation  does  not  enable 
Congress  to  form  more  than  general  treaties:  at  the  moment  of  the 
highest  authority  of  Congress  the  power  in  question  was  withheld 
by  the  several  States.  No  treaty  that  could  be  made  would  suit  the 
different  interests.  When  treaties  are  necessary,  they  must  be  made 
with  the  States  separately.  Each  State  has  reserved  every  power 
relative  to  imports,  exports,  prohibitions,  duties,  &c.,  to  itself.  But 
no  treaty  at  present  is  necessary. 

B.   Why  England  would  not  make  a  Commercial  Treaty,  1785  l 

One  of  the  greatest  weaknesses  of  the  Confederation  was  the  reservation  by  the 
several  states  of  all  the  important  powers  over  finance,  foreign  relations,  and  similar 
subjects.  Consequently  the  Congress  of  the  Confederation  was  unable  to  levy 
taxes  or  to  make  treaties  without  first  securing  the  consent  of  all  the  states.  "  We 
are  one  nation  today,  and  thirteen  tomorrow,"  said  Washington;  "who  will  treat 
with  us  on  those  terms?"  Whether  the  ostensible  reason  urged  by  the  Duke  of 
Dorset  was  the  real  one  or  not,  the  fact  remained  that  England  refused  to  negotiate 
a  commercial  treaty  with  us. 

Paris,  March  26,  1785. 
GENTLEMEN, 

Having  communicated  to  my  Court  the  readiness  you  expressed 
in  your  letter  to  me  of  the  gth  of  December,  to  remove  to  London, 
for  the  purpose  of  treating  upon  such  points  as  may  materially  con- 
cern the  interests,  both  political  and  commercial,  of  Great  Britain 
and  America;  and  having,  at  the  same  time,  represented  that  you 
declared  yourselves  to  be  fully  authorized  and  empowered  to  nego- 
tiate, I  have  been,  in  answer  thereto,  instructed  to  learn  from  you, 

1  Letter  from  the  Duke  of  Dorset  to  the  American  Commissioners.  Diplomatic 
Correspondence  of  the  United  States  of  America,  1783-9  (Washington,  1837),  I, 
574-5- 


1 88  READINGS  IN  ECONOMIC  HISTORY 

gentlemen,  what  is  the  real  nature  of  the  powers  with  which  you  are 
invested,  whether  you  are  merely  commissioned  by  Congress,  or 
whether  you  have  received  separate  powers  from  the  respective 
States.  A  committee  of  North  American  merchants  have  waited 
upon  his  Majesty's  principal  Secretary  of  State  for  Foreign  Affairs, 
to  express  how  anxiously  they  wished  to  be  informed  upon  this  sub- 
ject, repeated  experience  having  taught  them  in  particular,  as  well 
as  the  public  in  general,  how  little  the  authority  of  Congress  could 
avail  in  any  respect,  where  the  interests  of  any  one  individual  State 
was  even  concerned,  and  particularly  so  where  the  concerns  of  that 
particular  State  might  be  supposed  to  militate  against  such  resolu- 
tions as  Congress  might  think  proper  to  adopt. 

The  apparent  determination  of  the  respective  States  to  regulate 
their  own  separate  interests,  renders  it  absolutely  necessary  towards 
forming  a  permanent  system  of  commerce,  that  my  Court  should  be 
informed  how  far  the  Commissioners  can  be  duly  authorized  to 
enter  into  any  engagements  with  Great  Britain,  which  it  may  not 
be  in  the  power  of  any  one  of  the  States  to  render  totally  fruitless  and 
ineffectual. 

I  have  the  honor  to  be,  &c.,  DORSET 

C.  British  Merchants  sure  of  the  American  Market,  1776  l 

While  Dean  Tucker  was  very  bitter  against  the  colonists  for  rebelling  against 
the  mother  country,  he  urged  the  people  of  England  to  accept  separation  philosophi- 
cally, as  they  would  lose  nothing  in  the  way  of  trade.  The  long  credit  secured  by 
Americans  from  English  merchants  would  always  lead  them,  he  argued,  to  prefer 
British  goods  to  those  of  any  other  country. 

ANSWER  5.  The  Trade  of  Great-Britain  with  the  Colonies  rests 
on  a  much  firmer  Foundation  than  that  of  a  nominal  Subjection  by 
Means  of  Paper  Laws  and  imaginary  Restrictions :  —  A  Foundation 
so  very  obvious,  as  well  as  secure,  that  it  is  surprising  it  hath  not 
been  taken  Notice  of  in  this  Dispute.  The  Foundation,  I  mean, 
is,  the  Superiority  of  the  British  Capitals  over  those  of  every  other 
Country  in  the  Universe.  As  a  signal  Proof  of  this,  let  it  be  observed, 
that  the  British  Exporter  gives  long  Credit  to  almost  every  Country, 
to  which  he  sends  his  Goods;  but  more  especially  he  used  to  do  so 
to  North- America:  Yet  when  he  imports  from  other  Countries,  he 
receives  no  Credit.  On  the  Contrary,  his  general  Custom  is,  either 

1  A  Series  of  Answers  to  Certain  Objections  against  Separation  from  the  Rebellious 
Colonies.  By  Josiah  Tucker  (Glocester,  17/6),  30-1. 


to  advance  Money  beforehand,  or  at  least  to  pay  for  the  Goods  as 
soon  as  they  arrive.  Hence  therefore  it  comes  to  pass,  that  the  Trade 
of  the  World  is  carried  on,  in  a  great  Measure,  by  British  Capitals; 
and  whilst  this  Superiority  shall  last,  it  is  morally  impossible  that  the 
Trade  of  the  British  Nation  can  suffer  any  very  great  or  alarming 
Diminution.  Now  the  North- Americans,  who  enjoyed  this  Advan- 
tage to  a  greater  Degree  than  any  others,  by  purchasing  Goods  of 
us  at  long  Credit,  and  then  selling  the  same  Goods  to  the  Spaniards 
for  ready  Money,  will  find  by  Experience,  that  in  quarrelling  with 
the  English,  they  have  quarrelled  with  their  best  Friends.  Let  them 
therefore  go  wherever  they  please,  and  try  all  the  Nations  on  the 
Globe.  When  they  have  done,  they  will  suppliantly  return  to 
Great-Britain,  and  entreat  to  be  admitted  into  the  Number  of  our 
Customers,  not  for  ours,  but  for  their  own  Sakes. 

D.   Advantages  of  the  English  Market  to  Americans,  1783  l 

Writing  several  years  after  Dean  Tucker,  Lord  Sheffield  used  the  same  argument 
against  making  a  commercial  treaty  with  the  United  States,  namely  that  the  superior 
credit  facilities  they  enjoyed  in  England  would  bring  them  to  that  market  in  prefer- 
ence to  any  other.  Other  reasons  were  also  given,  such  as  the  ability  to  secure  best 
in  London  an  assorted  general  cargo.  As  a  matter  of  fact  American  trade  returned 
generally  into  the  old  channels  after  the  war  and  was  carried  on  chiefly  with  England. 

At  least  four-fifths  of  the  importations  from  Europe  into  the 
American  States,  were  at  all  times  made  upon  credit ;  and  undoubtedly 
the  States  are  in  greater  want  of  credit  at  this  time  than  at  former 
periods.  It  can  be  had  only  in  Great  Britain.2  The  French  who 
gave  them  credit,  are  all  bankrupts:  French  merchants  cannot  give 
much  credit.  The  Dutch  in  general  have  not  trusted  them  to  any 
amount;  those  who  did  have  suffered;  and  it  is  not  the  custom  of 
the  Dutch  to  give  credit,  but  on  the  best  security.  It  is  therefore 
obvious  from  this  and  the  foregoing  state  of  imports  and  exports, 
into  what  channels  the  commerce  of  the  American  States  must  in- 


1  Observations  on  the  Commerce  of  the  American  States.     By  Lord  John  Sheffield 
(2d  edition,  London,  1784),  200-7,  263-4,  272. 

2  This  credit  was  so  extensive,  and  so  stretched  beyond  all  proper  bounds,  as 
to  threaten  the  ruin  of  every  British  merchant  trading  to  America  in  the  year  1772. 
The  long  credit  given  to  America,  the  difficulty  of  recovering  debts  (which  from  the 
feebleness  of  the  new  governments,  must  become  still  more  difficult)  greatly  preju- 
diced our  trade  with  that  country,  and  made  bankrupts  of  almost  three- fourths  of 
the  merchants  of  London  trading  to  America,  particularly  to  Virginia  and  Maryland. 
It  is  said  that  more  goods  have  been  sent  to  America  in  1783  than  that  country 
could  possibly  pay  for  in  three  years. 


1 9o  READINGS  IN  ECONOMIC  HISTORY 

evitably  flow,  and  that  nearly  four-fifths  of  their  importations  1  will 
be  from  Great  Britain  directly.  Where  articles  are  nearly  equal,  the 
superior  credit  afforded  by  England  will  always  give  the  preference. 
The  American  will,  doubtless,  attempt  to  persuade  the  British 
merchant  to  be  his  security  with  foreigners;  but  it  is  certain  many 
foreign  articles  will  go  to  America  through  Great  Britain,  as  formerly, 
on  account  of  the  difficulty  the  American  merchant  would  find  in 
resorting  to  every  quarter  of  the  world  to  collect  a  cargo.  The  Ameri- 
cans send  ships  to  be  loaded  with  all  sorts  of  European  goods.  A 
general  cargo  for  the  American  market  cannot  be  made  up  on  such 
advantageous  terms  in  any  part  of  the  world  as  in  England.  In 
our  ports,  all  articles  may  be  got  writh  dispatch  —  a  most  winning  cir- 
cumstance in  trade;  but  wherever  they  carry  fish,  and  those  articles 
for  which  England  cannot  be  the  entrepot,  they  will  take  back  wine, 
silk,  oil,  &c.  from  Spain  and  Portugal,  and  the  Mediterranean.2  But 

1  Notwithstanding  the  resolves  of  Congress,  and  all  the  disadvantages  arising 
from  the  war,  British  manufactures,  to  a  vast  amount,  had  the  preference,  and  in 
great  part  supplied  America,  though  burdened  with  double  freight,  double  port 
charges  and  commission,  and  a  circuitous  voyage  through  a  neutral  port.     Besides, 
what  went  to  the  Americans  through  Halifax,  New  York,  South  Carolina  and 
Georgia,  many  ships  which  cleared  for  New  York  and  Halifax  at  the  ports  of  London, 
Bristol,  Liverpool,  Scotland,  and  Ireland,  went  at  great  risque,  and  in  the  face  of 
act  of  Congress,  directly  to  North  America.   .   .   .     These  facts  being  notorious, 
can  it  be  supposed,  our  manufactures  being  so  much  better,  so  much  cheaper,  and 
so  much  more  suitable,  as  to  support  themselves  against  all  these  disadvantages 
in  war,  that  they  will  not  occupy  the  American  markets  in  peace?     And  no  small 
advantage  may  arise  to  this  country  from  the  distrust  the  French  and  Americans 
have  of  each  other  in  commercial  matters.     The  French  fearing  to  consign  their 
goods  to  Americans,  sent  out  factors;   while  the  latter,  equally  jealous,  sent  their 
own  people  to  transact  their  business  in  France,  where  several  houses  were  estab- 
lished during  the  war,  which  since  the  peace  are  settled  or  settling  in  England. 
American  agents  were  also  in  Holland  to  little  advantage. 

The  Americans  must  seek  the  commerce  of  Britain,  because  our  manufactures 
are  most  suitable.  Few  trading  Americans  speak  any  foreign  language;  they  are 
acquainted  with  our  laws  as  well  as  with  our  language.  They  will  put  a  confidence 
in  British  merchants,  which  they  will  not  in  those  of  other  nations,  with  whose  people 
they  are  unacquainted,  as  well  as  with  their  laws  and  language.  They  have  im- 
pressions of  the  arbitrary  proceedings  of  the  French;  they  will  recollect,  that  when 
they  went  to  the  French  islands,  they  were  not  permitted  to  sell  the  provisions, 
&c.,  they  had  imported,  until  the  French  merchants  had  sold  all  theirs;  that  the 
French  took  their  goods  at  what  price  they  pleased,  and  charged  them  as  they 
thought  proper  for  their  own. 

2  It  is  not  probable  the  American  States  will  have  a  very  free  trade  in  the  Med- 
iterranean; it  will  not  be  the  interest  of  any  of  the  great  maritime  powers  to  protect 
them  there  from  the  Barbary  States.     If  they  know  their  interests,  they  will  not 
encourage  the  Americans  to  be  carriers.     That  the  Barbary  States  are  advantageous 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     191 

if  we  maintain  the  carrying  trade,  half  the  commerce  of  the  American 
States,  or  less  than  half,  without  the  expence  of  their  government  and 
protection,  and  without  the  extravagance  of  bounties,  would  be 
infinitely  better  for  us  than  the  monopoly,  such  as  it  was.  .  .  . 

What  was  foretold  in  the  first  edition  of  this  work,  has  now  [1784] 
actually  happened.  Every  account  from  America  says,  that  British 
manufactures  are  selling  at  a  considerable  profit,  while  other  European 
goods  cannot  obtain  the  first  cost.  Every  day's  experience  shews, 
that  this  country,  from  the  nature  and  quality  of  its  manufactures, 
and  from  the  ascendancy  it  has  acquired  in  commerce,  will  command 
three-fourths  of  the  American  trade.  The  American  merchants  so- 
licit a  correspondence,  and  beg  for  credit,  because,  while  they  feel 
their  own  want  of  capital,  they  know  that  our  traders  are  more  liberal, 
and  our  goods  cheaper  and  better,  than  any  in  Europe.  And  the 
only  danger  is,  not  that  the  American  merchants  will  ask  for  too  few 
manufactures,  but  that  they  will  obtain  too  many.  The  American 
consumers  have  been  impoverished  by  an  expensive  war,  which  has 
bequeathed  them  many  taxes  to  pay;  and  they  will  not  be  more 
punctual  in  their  remittances  at  a  time  when  they  are  associating 
against  the  payment  of  old  debts.  It  may  be  for  our  interest  to  run 
some  hazard,  however,  at  the  renewal  of  our  correspondence,  by 
accepting  a  trade  which  is  pressed  upon  us  by  willing  customers. 
But  how  far  it  may  be  prudent  for  the  British  merchant  to  comply 
with  orders,  till  the  several  States  hold  out  some  regulations,  that 
will  give  them  security,  is  a  question.  .  .  . 

It  is  well  known,  that  numbers  of  our  merchants  have  been  made 
bankrupts  through  the  bad  payment  of  the  Americans. 

E.    Trade  between  England  and  the  United  States,  1784-1790  l 

That  Dean  Tucker  and  Lord  Sheffield  were  right  in  saying  that  the  political 
separation  of  the  colonies  from  the  mother  country  and  the  refusal  on  the  part  of 
England  to  negotiate  a  commercial  treaty  with  the  United  States  would  not  materi- 


to  the  maritime  powers  is  certain.  If  they  were  suppressed  the  little  States  of  Italy 
&c.  would  have  much  more  of  the  carrying  trade.  .  .  .  The  Americans  cannot 
protect  themselves  from  the  latter;  they  cannot  pretend  to  a  navy.  In  war,  New 
England  may  have  privateers,  but  they  will  be  much  fewer  than  they  have  been; 
they  will  be  few  indeed,  if  we  do  not  give  up  the  Navigation  Act.  The  best  informed 
say,  not  less  than  three-fourths  of  the  crews  of  the  American  privateers,  during  the 
late  war,  were  Europeans. 

1  A  Statistical  View  of  the  Commerce  of  the  United  States  of  America.     By  Timothy 
Pitkin  (ad  edition,  New  York,  1817),  30. 


1 92  READINGS  IN  ECONOMIC  HISTORY 

ally  affect  the  trade  between  the  two  countries,  is  proved  by  the  table  here  given. 
After  peace  was  declared  trade  was  renewed  on  an  even  larger  scale.  One  result 
of  this  was  to  show  that  political  control  was  not  necessary  to  secure  the  trade  of  a 
country. 

The  following  is  an  account  of  the  imports  into  England  from  the 
United  States,  and  exports  to  the  United  States  from  that  country 
in  sterling  money,  from  1784  to  1790,  taken  from  the  English  cus- 
tomhouse books  —  viz. 

Years  Imports  Exports 

1784  £  749,345   £3,679,467 

1785   893,594  2,308,023 

1786   843,119  1,603,465 

1787   893,637   2,009,111 

1788   1,023,789  1,886,142 

1789   1,050,198  2,525,298 

1790  1,191,071   3,431,778 

II.  EFFECTS  OF  THE  FAILURE  TO  NEGOTIATE  A  COMMERCIAL  TREATY 

A.    Trade  between  the  West  Indies  and  North  America  before  1774  l 

One  of  the  most  lucrative  and  mutually  advantageous  branches  of  trade  carried 
on  by  the  colonists  was  that  with  the  West  Indies.  To  the  planters  in  those  islands 
it  was  absolutely  essential,  while  to  the  American  colonies  it  was  less  vital  but  not 
less  profitable.  After  American  independence  was  acknowledged  trade  between  the 
North  American  states  and  the  English  West  Indies  was  of  course  impossible  under 
the  navigation  acts,  which  permitted  colonial  trade  to  be  carried  on  only  in  British 
ships.  The  impossibility  of  renewing  this  trade  had  disastrous  consequences. 
Edwards  was  governor  of  Jamaica  and  wrote  a  very  valuable  book  on  the  West 
Indies. 

It  may,  I  think,  be  affirmed,  without  hazard  of  contradiction,  that 
if  ever  there  was  any  one  particular  branch  of  commerce  in  the  world, 
that  called  less  for  restraint  and  limitation  than  any  other,  it  was  the 
trade  which,  previous  to  the  year  1774,  was  carried  on  between  the 
planters  of  the  West  Indies  and  the  inhabitants  of  North  America. 
It  was  not  a  traffick  calculated  to  answer  the  fantastick  calls  of  vanity, 
or  to  administer  gratification  to  luxury  or  vice;  but  to  procure  food 
for  the  hungry,  and  to  furnish  materials  (scarce  less  important  than 
food)  for  supplying  the  planters  in  two  capital  objects,  their  buildings, 
and  packages  for  their  chief  staple  productions,  sugar,  and  rum.  Of 
the  necessity  they  were  under  on  the  latter  account,  an  idea  may  be 

1  The  History,  Civil  and  Commercial,  of  the  British  Colonies  in  the  West 
Indies.  By  Bryan  Edwards  (4th  edition,  London,  1807),  II,  485-6. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     193 

formed  from  the  statement  in  the  preceding  chapter  of  the  importation 
of  those  commodities  into  Great  Britain;  the  cultivation  of  which 
must  absolutely  have  stopped  without  the  means  of  conveying  them 
to  market. 

For  the  supply  of  those  essential  articles,  lumber,  fish,  flour,  and 
grain,  America  seems  to  have  been  happily  fitted,  as  well  from 
internal  circumstances,  as  her  commodious  situation;  and  it  is  to  a 
neighbourly  intercourse  with  that  continent,  continued  during  one 
hundred  and  thirty  years,  that  our  sugar  plantations  in  a  great  measure 
owe  their  prosperity.  .  .  . 

B.  The  West  Indies  should  not  be  Opened  to  American  Trade,  1783  l 

It  was  proposed  by  Pitt  to  open  the  West  Indies  to  trade  with  the  American 
states,  and  against  this  Lord  Sheffield  argued  warmly,  urging  that  all  necessary 
supplies  could  be  furnished  by  Nova  Scotia,  by  Ireland,  and  by  England. 

It  should  seem,  that  there  must  be  some  other  object  in  reserve, 
which  is  not  yet  acknowledged,  besides  the  cheapness  of  lumber 
and  provisions,  and  a  market  for  rum,  to  account  for  the  eagerness, 
which  some  express,  for  opening  the  navigation  of  the  West  Indies. 
The  assertion,  that  our  islands  must  starve  if  they  are  not  opened 
to  American  shipping,  is  a  curious  instance  of  the  slight  ground  on 
which  men  will  be  clamorous:  ...  If  our  islands  are  so  helpless, 
and  would  rather  sacrifice  our  marine  than  make  so  small  an  effort 
as  to  fit  our  vessels  in  addition  to  those  of  Bermuda,  and  our  remain- 
ing colonies,  sufficient  to  supply  themselves  with  provisions  and 
lumber,  they  deserve  to  suffer  or  to  pay  an  extraordinary  price. 

C.  American  Vessels  should,  be  Admitted  to  Trade  with  the  West  Indies, 

1784* 

In  reply  to  Lord  Sheffield's  arguments  many  rejoinders  were  written,  from  one 
of  which  a  brief  extract  may  be  given.  In  this  it  was  urged  that  Great  Britain  would 
profit  most  by  the  proposed  arrangement. 

It  is  expedient  however  to  examine  still  more  fully,  what  the 
grand  leading  argument  that  Lord  Sheffield  adduces  in  favour  of 
the  necessity  of  totally  excluding  them  from  a  participation  in  the 

1  Observations  on  the  Commerce  of  the  A  merican  States.  By  Lord  John  Sheffield 
(ad  edition,  London,  1784),  146-7. 

*  A  Letter  from  an  American  .  .  .  on  Lord  Sheffield's  Pamphlet.  .  .  .  Said  to 
be  written  by  William  Bingham  (Philadelphia,  1784),  10-11. 


194  READINGS  IN  ECONOMIC  HISTORY 

British  West  India  trade,  amounts  to.  He  is  fearful  that  they  will 
thereby  become  the  carriers  of  the  produce  of  the  islands  to  the 
place  of  its  consumption,  which  will  create  an  interference  of  foreign 
vessels,  thereby  lessening  the  number  of  seamen,  and  consequently 
the  naval  force  of  the  country. 

But,  if  in  addition  to  all  that  I  have  already  said,  I  answer,  that 
in  return  for  this  accommodation  which  he  may  call  indulgent,  but 
which  I  have  clearly  evinced  to  be  the  interest  of  Great  Britain, 
consulting  the  welfare  of  her  islands,  to  grant. 

I  say,  if  in  return  for  this  accommodation,  her  subjects  may 
be  admitted  to  a  free  ingress  and  egress  to  and  from  the  ports  of  the 
United  States  —  What  reply  will  the  advocates  for  this  system 
make?  —  What  will  become  of  Lord  Sheffield's  reasoning,  when 
weighed  in  the  scale  of  comparative  proportion?  I  only  wish  them  to 
comprehend  the  magnitude  of  the  advantage.  Men  of  weak  or 
limited  understandings,  will  be  incapable  of  extending  their  ideas, 
so  as  to  embrace  the  vast  field  it  opens  to  an  enlightened  mind. 

In  the  first  place,  they  will  not  assuredly  deny,  that  the  produc- 
tions of  the  United  States,  to  the  transportation  of  which,  from  the 
proposed  arrangement,  they  are  freely  to  be  admitted,  will  furnish 
twice  the  quantity  of  bulky  materials,  that  the  exports  of  the  West 
Indies  do,  and  will  consequently  employ  twice  the  quantity  of  ship- 
ping.—  To  stamp  conviction  in  regard  to  the  truth  of  this  assertion, 
let  them  take  a  view  of  the  rice,  indigo,  and  lumber  of  Georgia  and 
South  Carolina; — the  naval  stores,  lumber,  and  tobacco  of  North 
Carolina;  —  the  tobacco,  wheat,  Indian  corn,  &c.  of  Virginia  and 
Maryland;  —  the  flour,  lumber,  corn,  and  various  provisions  of 
Pennsylvania,  Delaware,  Jersey  and  New- York;  —  the  fish,  lumber, 
live  stock,  &c.  of  the  New  England  States. 

D.   Effects  of  the  Prohibition  of  Trade  between  the  West  Indies  and  the 
United  States,  1780-1787  1 

In  1783  Parliament  passed  an  act  excluding  American  vessels  from  trade  with 
the  British  West  Indies.  As  a  result  of  the  stoppage  of  this  trade  the  accustomed 
supplies  of  fish,  breadstuffs,  meat,  etc.,  from  America,  were  cut  off,  and  thousands 
of  persons  on  the  islands  actually  died  of  starvation.  These  disastrous  effects 
are  vividly  portrayed  by  Governor  Edwards. 

On  the  ad  July  1783  the  importation  into  the  British  West  Indies 
of  every  species  of  naval  stores,  staves,  and  lumber,  live  stock,  flour, 

1  The  History,  Civil  and  Commercial,  of  the  British  Colonies  in  the  West  Indies. 
By  Bryan  Edwards  (4th  edition,  London,  1807),  II,  495-515,  passim. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     195 

and  grain  of  all  kinds,  the  growth  of  the  American  states,  was  con- 
fined to  British  ships  legally  navigated;  and  the  export  to  those 
states  of  West  Indian  productions,  was  made  subject  to  the  same 
restriction;  while  many  necessary  articles  (as  salted  beef  and  pork, 
fish,  and  train-oil)  formerly  supplied  by  America,  were  prohibited 
altogether,  it  was  considered  as  a  measure  merely  temporary  and 
experimental;  and  until  a  plan  of  permanent  regulation  should  be 
agreed  to  by  both  countries,  it  was  thought  neither  impolitick  nor 
unjust,  that  Great  Britain  should  reserve  in  her  own  hands  the  power 
of  restraining  or  relaxing  her  system  of  commercial  arrangements,  as 
circumstances  might  arise  to  render  the  exercise  of  such  a  power 
prudent  and  necessary. 

In  these  reasons  the  West  Indian  merchants,  and  such  of  the 
planters  as  were  resident  in  Great  Britain,  acquiesced;  but  on  the 
first  meeting  of  a  new  parliament,  in  May,  1784,  (another  change 
having  taken  place  in  the  mean  time  in  the  British  administration)  1 
the  business  of  a  commercial  intercourse  between  the  West  Indies 
and  the  States  of  America,  pressed  itself  on  the  attention  of  govern- 
ment with  a  force  which  was  not  to  be  resisted.  Petitions,  com- 
plaints, and  remonstrances,  were  poured  in  from  every  island  in  the 
West  Indies.  Some  of  the  petitioners  represented  that  they  had  not 
six  weeks  provisions  in  store,  and  all  of  them  anticipated  the  most 
dreadful  consequences,  if  the  system  of  restriction  should  be  much 
longer  persisted  in;  expecting  nothing  less  than  a  general  revolt 
of  their  slaves,  in  the  apprehension  of  perishing  of  hunger.  .  .  . 

On  the  whole,  the  lords  of  the  committee  strongly  recommended 
a  strict  and  rigid  adherence  to  the  measure  of  confining  the  inter- 
course between  our  West  Indian  islands  and  America,  to  British 
ships  only,  as  a  regulation  of  absolute  necessity;  considering  any 
deviation  from  it,  as  exposing  the  commerce  and  navigation  of  Great 
Britain  to  the  rivalry  of  revolted  subjects,  now  become  ill-affected 
aliens.  .  .  . 

These  doctrines  and  opinions  of  the  lords  of  the  committee  of 
council  were  unfortunately  approved  and  adopted  in  their  fullest 
extent  by  the  British  government;  .  .  . 

But  there  was  this  misfortune  attending  the  sugar  planters,  that 
their  wants  were  immediate;  and  of  a  complexion  affecting  not  only 

1  The  Right  Honourable  William  Pitt,  who  had  been  Chancellor  of  the  Ex- 
chequer from  loth  July,  1782,  to  sth  April,  1783,  was  reappointed  to  that  office, 
and  also  nominated  First  Lord  of  the  Treasury,  on  the  27th  of  December,  1783, 
soon  after  which  the  parliament  was  dissolved. 


196  READINGS  IN  ECONOMIC  HISTORY 

property,  but  life.  Whatever  resources  might  ultimately  be  found  in 
the  opulence  and  faculties  of  the  mother-country,  it  was  impossible, 
in  the  nature  of  things,  to  expect  from  so  distant  a  quarter  an  ade- 
quate supply  to  a  vast  and  various  demand,  coming  suddenly  and 
unexpectedly.  Many  of  the  sugar  islands  too  had  suffered  dread- 
fully under  two  tremendous  hurricanes,  in  1780  and  1781,  in  conse- 
quence whereof  (had  it  not  been  for  the  casual  assistance  obtained 
from  prize-vessels)  one-half  of  their  negroes  must  absolutely  have 
perished  of  hunger.  Should  similar  visitations  occur,  the  most 
dreadful  apprehensions  would  be  realized;  and  I  am  sorry  to  add, 
that  realized  they  were! 

I  have  now  before  me  a  report  of  the  committee  of  the  assembly 
of  Jamaica,  on  the  subject  of  the  slave  trade,  wherein  the  loss  of 
negroes  in  that  island,  in  consequence  of  those  awful  concussions 
of  nature,  and  the  want  of  supplies  from  America,  is  incidentally 
stated.  .  .  . 

"We  shall  now  (say  the  committee)  point  out  the  principal  causes 
to  which  this  mortality  of  our  slaves  is  justly  chargeable.  It  is 
but  too  well  known  to  the  house,  that  in  the  several  years  1780, 
1781,  1784,  1785,  and  1786,  it  pleased  Divine  Providence  to  visit 
this  island  with  repeated  hurricanes,  which  spread  desolation  through- 
out most  parts  of  the  island;  .  .  . 

"We  decline  to  enlarge  on  the  consequences  which  followed  lest 
we  may  appear  to  exaggerate;  but  having  endeavoured  to  compute, 
with  as  much  accuracy  as  the  subject  will  admit,  the  number  of  our 
slaves  whose  destruction  may  be  fairly  attributed  to  these  repeated 
calamities,  and  the  unfortunate  measure  of  interdicting  foreign  sup- 
plies, and  for  this  purpose  compared  the  imports  and  returns  of  ne- 
groes for  the  last  seven  years,  with  those  of  seven  years  preceding, 
we  hesitate  not,  after  every  allowance  for  adventitious  causes,  to  fix 
the  whole  loss  at  fifteen  thousand:  THIS  NUMBER  WE  FIRMLY  BELIEVE 

TO  HAVE  PERISHED  OF  FAMINE,  OR  OF  DISEASES  CONTRACTED  BY  SCANTY 
AND  UNWHOLESOME  DIET,  BETWEEN  THE  LATTER  END  OF  1780,  AND 
THE  BEGINNING  OF  1787." 

Such  (without  including  the  loss  of  negroes  in  the  other  islands, 
and  the  consequent  diminution  in  their  cultivation  and  returns)  was 
the  price  at  which  Great  Britain  thought  proper  to  retain  her  ex- 
clusive right  of  supplying  her  sugar  islands  with  food  and  neces- 
saries! 


AMERICAN  COMMERCE   AND   COMMERCIAL  POLICY     197 

III.  ECONOMIC  REASONS  FOR  THE  CONSTITUTION 

A.   Commercial  Difficulties  Led  to  Constitution,  1783-1789  l 

Under  the  ineffective  Confederation  no  common  legislation  on  commercial 
matters  was  possible,  and  the  conflicting  commercial  and  tariff  legislation  of  the 
different  states  led  inevitably  to  a  demand  for  a  stronger  central  government 
which  could  deal  with  these  matters  as  a  whole.  Seybert  was  a  Philadelphia 
physician  and  at  one  time  a  member  of  Congress. 

During  the  wax  of  the  revolution,  our  commerce  was  suspended; 
after  the*  peace,  in  1783,  our  trade  continued  to  languish;  it  had  to 
contend  with  domestic  and  foreign  obstacles;  foreign  nations  enter- 
tained a  jealousy  concerning  these  states;  at  home  a  rivalship  was 
prevalent  amongst  the  several  members  of  the  confederacy,  and 
checked  the  prosperity  of  the  nation.  Each  of  the  thirteen  inde- 
pendent sovereignties,  contemplated  its  own  intermediate  interests; 
some  of  the  states  declared  the  commercial  intercourse  with  them,  to 
be  equally  free  to  all  nations,  and  they  cautiously  avoided  to  lay 
duties  on  such  merchandise  as  was  subject  to  them,  when  imported 
into  other  states.  To  provide  a  fund  to  discharge  the  public  debt, 
and  to  pay  the  arrears  due  to  the  soldiers  who  fought  the  battles  of 
the  revolution,  it  was  proposed  in  Congress,  during  the  operation  of 
the  articles  of  Confederation,  to  lay  a  duty  of  five  per  centum  ad 
valorem,  on  foreign  merchandise  imported  into  the  United  States; 
the  opposition  of  the  state  of  Rhode  Island,  was,  of  itself,  adequate 
to  defeat  this  plan.2  When  the  state  of  Pennsylvania  laid  a  duty 
on  foreign  merchandise  imported,  the  state  of  New- Jersey,  equally 
washed  by  the  waters  of  the  Delaware  River,  admitted  the  same 
articles  free  of  duty:  they  could  easily  be  smuggled  into  one  state 
from  the  other.  The  several  states  laid  different  rates  of  duty  on 
foreign  tonnage:  in  some  one  shilling  sterling  per  ton  was  imposed  on 
vessels,  which  in  other  states  paid  three  shillings  sterling  per  ton. 
Such  was  the  misunderstanding  amongst  the  several  states;  there 
were  no  general  commercial  regulations  for  them,  nor  could  the  Con- 
gress enforce  any,  unless  they  were  adopted  by  every  member  of  the 
federation;  the  opposition  of  any  one  of  the  states,  could  prevent 
the  passage  of  any  act  on  the  subject. 

1  Statistical  Annals  .  .  .  of  the  United  States.     By  Adam  Seybert  (Philadelphia, 
1818),  57-9. 

2  Proceedings  of  Congress,  i8th  April,  1783. 


198  READINGS  IN  ECONOMIC  HISTORY 

Other  nations  were  well  disposed  to  take  advantage  of  our  domes- 
tic embarrassments.  Very  soon  after  the  conclusion  of  the  American 
war,  Great  Britain  was  not  alone  opposed  to  our  commercial  prosperity; 
France  and  Spain  were  equally  jealous  of  it;  we  were  by  these  nations 
considered  as  their  rival,  possessed  of  the  means  and  the  character 
to  dispute  the  benefits  arising  from  navigation.  Our  intercourse 
with  all  these  nations,  was  placed  under  restrictions;  their  con- 
nection with  us  was  measured  by  the  scale  of  interest.  After  France 
and  Spain  had  become  parties  to  our  revolutionary  war,  they  con- 
sented to  admit  foreign  vessels  into  their  West  India  ports,  whereby 
they  were  enabled  to  man  their  fleets,  and  to  obtain  subsistence  for 
the  inhabitants.  Immediately  after  the  preliminaries  of  the  peace 
were  signed,  in  1783,  these  nations  abridged,  and  very  soon  thereafter, 
abolished  the  privileges,  they  had  granted  to  foreigners  in  this  branch 
of  their  trade.  By  an  arret  of  the  3Oth  of  August,  1784,  foreign  vessels, 
of  more  than  sixty  tons,  were  not  permitted  to  enter  the  ports  of  the 
French  West  Indies ;  the  merchandise  that  was  allowed  to  be  entered, 
was  enumerated  and  very  limited;  it  consisted  principally  of  articles 
of  first  necessity,  and  in  return  for  the  American  cargoes,  molasses, 
rum,  and  such  merchandise  as  had  been  imported  from  France  could 
only  be  taken  away.1  Recently  the  same  system  of  restrictions  has 
been  again  adopted.2 

Soon  after  the  peace,  in  1783,  the  United  States  offered  to  enter 
into  treaties  of  commerce  with  Great  Britain,  France,  Spain  and 
Portugal;3  all  our  overtures  were,  under  various  pretexts,  rejected. 

Surrounded  by  difficulties,  it  became  a  paramount  duty  to  cure 
the  palsy  which  afflicted  us  at  home.  It  was  manifest,  that  general 
regulations  were  essential  to  the  safety  and  welfare  of  the  Union;  it 
was  absolutely  necessary,  that  the  power  to  regulate  and  control  our 
intercourse  with  foreign  nations,  should  be  confided  to  Congress 
alone;  and  it  was  that  conviction,  which,  principally,  induced  the 
people  of  the  United  States,  to  call  the  convention  to  revise  the 
articles  of  the  confederation. 

By  the  Constitution  of  the  United  States,  Congress  has  power, 

"To  regulate  commerce  with  foreign  nations,  and  among  the 
several  states,  and  within  the  Indian  tribes." 

"No  tax  or  duty  shall  be  laid  on  articles  exported  from  any  state; 
no  preference  shall  be  given,  by  any  regulation  of  commerce  or  revenue, 

1  Macpherson,  loc.  cil.,  vol.  iv.,  pp.  55  and  56. 

2  Decree  of  the  governor  of  Martinique,  dated  i4th  March,  1816. 

3  Marshall's  Life  of  Washington,  vol.  v.,  p.  182,  et  seq. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     199 

to  the  ports  of  one  state  over  that  of  another;  nor  shall  vessels, 
bound  to  or  from  one  state,  be  obliged  to  enter,  clear  or  pay  duties 
in  another." 

"No  state  shall,  without  the  consent  of  Congress,  lay  any  impost 
or  duties  on  imports  or  exports,  except  what  may  be  absolutely  neces- 
sary for  executing  its  inspection  laws;  and  the  net  produce  of  all 
duties  and  imposts,  laid  by  any  state,  on  imports  or  exports,  shall  be 
for  the  use  of  the  Treasury  of  the  United  States,  and  all  such  laws 
shall  be  subject  to  the  revision  and  control  of  Congress."  l 

The  adoption  of  our  present  constitution,  stamped  upon  us  the 
characters  of  a  nation;  that  instrument  secured  domestic  tranquillity, 
and  paved  the  way  for  amicable  relations  with  foreign  powers:  at 
home  it  was  succeeded  by  general  prosperity;  abroad,  it  gained 
for  us  the  respect  of  foreign  powers.  .  .  . 


B.   Economic  Reasons  in  Favor  of  the  Constitution,  1787  2 

The  moneyed  men,  the  creditors,  and  those  in  general  who  wished  stability  and 
order  introduced  into  the  government,  favored  the  adoption  of  the  Constitution. 
Hamilton,  who  wrote  and  labored  earnestly  for  the  new  Constitution,  states  the 
situation  clearly. 

The  new  Constitution  has  in  favour  of  its  success  these  circum- 
stances. A  very  great  weight  of  influence  of  the  persons  who  framed 
it,  particularly  in  the  universal  popularity  of  General  Washington. 
The  good-will  of  the  commercial  interest  throughout  the  States, 
which  will  give  all  its  efforts  to  the  establishment  of  a  government 
capable  of  regulating,  protecting,  .and  extending  the  commerce  of 
the  Union.  The  good-will  of  most  men  of  property  in  the  several 
States,  who  wish  a  government  of  the  Union  able  to  protect  them 
against  domestic  violence,  and  the  depredations  which  the  demo- 
cratic spirit  is  apt  to  make  on  property,  and  who  are  besides  anxious 
for  the  respectability  of  the  nation.  The  hopes  of  the  creditors  of 
the  United  States,  that  a  general  government  possessing  the  means 
of  doing  it,  will  pay  the  debt  of  the  Union.  A  strong  belief  in  the 
people  at  large  in  the  insufficiency  of  the  present  Confederation  to 
preserve  the  existence  of  the  Union,  and  of  the  necessity  of  the  Union 
to  their  safety  and  prosperity;  of  course,  a  strong  desire  of  a  change, 
and  a  predisposition  to  receive  well  the  propositions  of  the  convention. 

1  Constitution  of  the  United  States,  Aft.  I.,  Sees,  viii,  ix,  x. 
*  Works  of  Alexander  Hamilton.     Edited  by  H.  C.  Lodge  (New  York,  1885-6), 
I,  400-2. 


200  READINGS  IN  ECONOMIC  HISTORY 

Against  its  success  is  to  be  put  the  dissent  of  two  or  three  important 
men  in  the  convention,  who  will  think  their  characters  pledged  to 
defeat  the  plan;  the  influence  of  many  inconsiderable  men  in  possession 
of  considerable  offices  under  the  State  governments,  who  will  fear 
a  diminution  of  their  consequence,  power,  and  emolument,  by  the 
establishment  of  the  general  government,  and  who  can  hope  for 
nothing  there;  the  influence  of  some  considerable  men  in  office,  possessed 
of  talents  and  popularity,  who,  partly  from  the  same  motives,  and 
partly  from  a  desire  of  playing  a  part  in  a  convulsion  for  their  own 
aggrandizement,  will  oppose  the  quiet  adoption  of  the  newr  government 
(some  considerable  men  out  of  office,  from  motives  of  ambition,  may 
be  disposed  to  act  the  same  part) .  Add  to  these  causes  the  disinclina- 
tion of  the  people  to  taxes,  and  of  course  to  a  strong  government; 
the  opposition  of  all  men  much  in  debt,  who  will  not  wish  to  see  a 
government  established,  one  object  of  which  is  to  restrain  the  means 
of  cheating  creditors;  the  democratical  jealousy  of  the  people,  which 
may  be  alarmed  at  the  appearance  of  institutions  that  may  seem 
calculated  to  place  the  power  of  the  community  in  few  hands,  and 
to  raise  a  few  individuals  to  stations  of  great  pre-eminence;  and  the 
influence  of  some  foreign  powers,  who,  from  different  motives,  will 
not  wish  to  see  an  energetic  government  established  throughout 
the  States. 

IV.  EXPANSION  OF  AMERICAN  COMMERCE 

A.   Commerce  more  profitable  than  Manufactures,  1787  l 

The  reasons  which  had  led  to  the  expansion  of  colonial  commerce  were  still 
operative  after  the  Revolution,  and  commerce  remained  more  profitable  than 
manufactures  for  another  twenty  years.  This,  next  to  agriculture,  formed  the 
most  lucrative  occupation  in  the  states.  Brissot  de  Warville  was  a  Frenchman  of 
liberal  views  who  lived  and  traveled  in  this  country  for  a  couple  of  years. 

Some  writers,  among  whom  are  found  the  celebrated  Dr.  Price 
and  the  Abbe  Mably,  have  exhorted  the  independent  Americans, 
if  not  to  exclude  exterior  commerce  entirely  from  their  ports,  at 
least  to  keep  it  within  very  contracted  bounds.  They  pretend,  that 
the  ruin  of  republicanism  in  the  United  States  can  happen  only  from 
exterior  commerce;  because  by  great  quantities  of  articles  of  luxury 
and  a  frivolous  taste,  that  commerce  would  corrupt  their  morals, 
and  without  pure  morals  a  republic  cannot  exist. 

1  The  Commerce  of  America  with  Europe.     By  J.  P.  Brissot  de  Warville,  and 
Etienne  Claviere  (London,  1794),  64-6,  74-9. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY    201 

"Alas!  What  can  the  United  States  import  from  Europe,  con- 
tinues Dr.  Price,  except  it  be  infection?  I  avow  it,  cries  the  Doctor, 
I  tremble  in  thinking  on  the  furor  for  exterior  commerce,  which  is 
apparently  going  to  turn  the  heads  of  the  Americans.  Every  nation 
spreads  nets  around  the  United  States,  and  caresses  them,  in  order 
to  gain  a  preference;  but  their  interest  cautions  them  to  beware 
of  these  seductions."  l 

I  am  far  from  contradicting,  in  its  basis,  the  opinion  of  these 
politicians.  Moreover,  I  think,  with  Dr.  Price,  that  the  United 
States  will  one  day  be  able  to  produce  every  thing  necessary  and 
convenient,  but  I  am  also  of  the  opinion,  that  these  two  writers 
have  considered  the  independent  Americans  in  a  false  point  of  view; 
that  they  have  not  sufficiently  observed  the  state  of  their  circum- 
stances; in  fine,  that  their  circumstances  and  actual  wants  oblige  them 
to  have  recourse  to  foreign  commerce.  This  is  a  truth  which  I  propose 
to  demonstrate;  for  I  will  prove  that  the  independent  Americans 
are  in  want  of  the  necessaries  and  conveniences  of  life,  and  in  some 
states,  of  luxuries,  and  that  their  habits  and  nature,  added  to  other 
circumstances,  will  always  prevent  their  renouncing  them  entirely. 

I  will  prove,  that  having  no  manufactures,  they  cannot  them- 
selves supply  these  wants,  and  that  they  can  have  no  manufactures 
for  a  long  time  to  come. 

That  although  they  already  possessed  them,  they  ought  to  prefer 
to  national  ones  those  of  exterior  commerce,  and  that  they  should 
rather  invite  Europeans  to  their  ports  than  frequent  those  of  the 
European  states. 

Finally,  that  by  the  same  reason  that  makes  it  impossible  to 
exclude  exterior  commerce,  in  case  of  wants  which  alone  it  can  sup- 
ply, it  is  equally  so  to  fix  its  boundaries.  .  .  . 

...  All  is  reduced  to  two  words;  America  has  wants,  and 
Europe  has  manufactures.  .  .  . 

But,  if  they  had  raw  materials  in  plenty,  they  ought  to  be  advised 
not  to  establish  manufactures;  or,  to  speak  more  justly,  manufactures 
could  not  be  established;  the  nature  of  things  ordains  it  so. 

Besides  there  will  be,  for  a  considerable  time  to  come,  more  to 

1  Price's  Observations,  page  76.  See  the  Abbe  Mably,  what  he  says  of  these 
observations,  from  page  146  to  page  163.  See  also  what  the  Comte  de  Mirabeau 
has  added  to  the  Observations  of  Dr.  Price,  in  his  Reflections  printed  at  the  end  of 
his  translation  of  this  work,  page  319.  London  edition,  1785. 

He  has,  as  a  severe  philosopher,  treated  on  exterior  commerce,  and  made  ab- 
straction of  the  actual  situation  of  the  Americans. 


202  READINGS  IN  ECONOMIC  HISTORY 

be  gained  in  the  United  States,  by  the  earth,  which  yields  abundantly, 
than  by  manufactures  —  and  man  places  himself  in  that  situation 
where  the  greatest  and  most  speedy  gain  is  to  be  acquired. 

As  the  population  must,  for  many  ages,  be  disproportioned  to  the 
extent  of  the  United  States,  land  will  be  cheap  there  during  the 
same  length  of  time,  and  consequently  the  inhabitants  will  for  a  long 
time  be  cultivators. 

B.    The  Trade  with  the  Orient,  1784-1800  1 

The  enforcement  of  the  navigation  acts  by  England  against  the  United  States, 
which  resulted  in  closing  the  West  Indies  to  the  latter  and  depriving  them  of  the 
carrying  trade  to  England,  forced  American  shipowners  to  seek  other  markets. 
There  followed  after  the  Revolution  one  of  the  most  adventurous  and  dramatic 
periods  of  expansion  of  our  foreign  trade.  Pitkin  was  a  member  of  the  House  of 
Representatives  from  Connecticut. 

The  trade  of  the  United  States  with  China  commenced  soon 
after  the  close  of  the  revolutionary  war.  The  first  American  vessel, 
that  went  on  a  trading  voyage  to  China,  sailed  from  the  port  of  New- 
York,  on  the  22d  day  of  February  1784,  and  returned  on  the  nth 
of  May  1785.  She  was  three  hundred  and  sixty  tons  burthen,  com- 
manded by  Captain  John  Green,  and  Samuel  Shaw,  Esq.,  agent 
for  the  owners.  The  Americans  were  well  received  by  the  Chinese 
government,  and  since  that  time,  our  trade  with  China  has  greatly 
increased. 

In  1789,  there  were  fifteen  American  vessels  at  Canton,  being 
a  greater  number,  than  from  any  other  nation,  except  Great-Britain. 
For  many  years,  we  have  imported  more  Chinese  goods,  than  were 
wanted  for  our  consumption,  and  which  we  have  again  exported  to 
other  countries.  The  principal  articles  imported  are  teas,  silks,  nan- 
keens, and  China  ware.  Of  these,  tea  is  of  the  greatest  value.  The 
quantity  of  this  article,  imported  and  consumed  within  the  United 
States,  has  increased  with  the  increase  of  population.  .  .  . 

The  value  of  goods  paying  duties  ad  valorem,  which  includes 
nankeens,  all  silk  and  cotton  goods,  and  China  ware,  imported  in 
1797,  from  China  and  the  East-Indies  generally,  but  principally  from 
the  former,  amounted  to  $922,161.  The  average  value  of  goods 
paying  the  same  duties,  from  China  and  other  native  Asiatic  powers 
during  the  years  1802,  1803,  and  1804,  was  about  two  millions  three 
hundred  thousand  dollars.  . 


1  A  Statistical  View  of  the  Commerce  of  the  United  States  of  America.     By  Timothy 
Pitkin  (2d  edition,  New  York,  1817),  246-9,  passim. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     203 

The  balance  of  trade  with  China,  as  it  appears  on  the  custom- 
house books,  is  much  against  the  United  States;  as  few  articles, 
either  domestic  or  foreign,  are  shipped  directly  from  the  United 
States  to  that  country.  The  payments  for  Chinese  goods  have 
been  generally  made  in  specie,  the  exportation  of  which  is  not 
entered  at  the  custom-house,  or  in  seal-skins  taken  in  the  South-Seas, 
and  furs  procured  on  the  North- West  Coast  of  America,  and  carried 
from  those  places,  directly  to  China,  without  being  brought  to  the 
United  States.  The  amount  of  specie  exported  to  China,  it  is  difficult 
to  ascertain  with  precision.  .  .  .  The  great  prices  obtained  at  Canton, 
for  furs  procured  on  the  North-West  Coast  of  America,  by  those 
who  were  with  Captain  Cook,  in  his  last  voyage  of  discovery,  induced 
others  to  engage  in  this  trade.  The  enterprize  of  the  Americans  led 
them  very  early  to  engage  in  these  long  and  hazardous  trading  voyages. 
The  first  of  the  kind,  undertaken  from  the  United  States,  was  from 
Boston  in  1788,  in  a  ship  commanded  by  captain  Kendrick.  This 
trade,  at  first,  afforded  great  profits,  to  the  concerned,  and  it  has, 
ever  since  the  year  1788,  been  carried  on  from  the  United  States,  to  a 
considerable  extent,  and  with  greater  or  less  profit. 


C.   The  Coasting  Trade, 

Not  merely  was  foreign  trade  developing,  but  the  coastwise  trade  and  fisheries 
were  also  growing.  As  long,  however,  as  America  depended  upon  Europe  for  her 
manufactured  goods  and  upon  China  and  the  East  and  West  Indies  for  her  luxuries, 
the  value  and  extent  of  the  foreign  trade  were  bound  to  exceed  the  coastwise  trade. 

The  coasting  trade  has  become  very  great,  and  the  derangement 
of  the  West-India  trade  must  extend  it  exceedingly,  during  the  cur- 
rent year,  from  the  failure  of  melasses.  The  increase  of  manufactures, 
and  foreign  restrictions  on  other  branches  of  trade,  have  contributed 
to  elevate  this  valuable  part  of  our  commerce;  and  the  former  will 
continue  steadily  to  increase  the  importance  of  the  coasting  business. 
The  vessels  which  take  supplies  of  flour,  and  many  other  articles, 
from  the  middle  and  northern  states  to  South-Carolina  and  Georgia, 
make  very  frequent  voyages,  and  they  return  less  than  half  laden: 
but  if  the  planters  should  pursue  the  cultivation  of  hemp,  flax,  hops, 
and  cotton,  they  may  come  back  with  full  cargoes.  A  similar  re-- 
mark may  be  justly  made  in  regard  to  the  other  states. 

1  A  View  of  the  United  States  of  America.     By  Tench  Coxe  (Philadelphia,  1794), 
34o-i. 


204  READINGS  IN  ECONOMIC  HISTORY 

The  fisheries  would  appear  not  to  have  recovered  their  former 
value;  but  it  is  plain,  they  have  increased  yearly  since  1789:  and  they 
are  even  now  more  valuable  than  they  appear  to  be.  The  consumption 
of  oil,  whale-bone,  skins  of  sea  animals,  spermaceti,  and  pickled  and 
dried  fish,  is  much  greater  in  the  United  States  at  this  time,  than  it 
was  twenty  years  ago.  The  outfits  of  the  fishing  vessels,  too,  are 
more  from  the  industry  and  resources  of  the  country,  than  was  for- 
merly the  case.  Wherefore  the  general  benefits  resulting  from  the 
fisheries  are  probably  not  less  than  before  the  revolution. 


D.  Shipbuilding  in  the  United  States,  ij8 3-1789 1 

Phineas  Bond  was  a  Loyalist  who  went  to  England  at  the  time  of  the  Revolu- 
tion, and  was  later  appointed  British  Consul  at  Philadelphia,  which  post  he  filled 
for  many  years.  The  following  extract  is  taken  from  a  report  to  the  foreign  office 
of  Britain  in  1 789.  It  will  be  noticed  that  he  is  very  pessimistic  as  to  the  prospects 
of  American  shipping. 

The  account  I  transmit  to  your  Grace  (No.  31)  of  the  number  of 
ships  now  building  is  very  accurate  as  to  the  5  middle  states  which 
compose  my  district,  what  relates  to  other  states  I  have  collected 
from  the  opinions  and  observations  of  persons  upon  whom  I  could 
rely:  —  For  a  short  time  subsequent  to  the  Peace,  my  Lord,  ship- 
building went  on  rapidly  in  the  Eastern  and  Middle  States  of  America 
—  but  the  restrictions  upon  the  commerce  of  the  country  soon  dis- 
couraged the  merchants  and  the  ship  builders  found  themselves 
without  employment.  In  Philada  where  this  business  was  carried 
en  formerly  to  a  prodigious  extent,  a  very  small  proportion  of  the 
ship  yards  are  even  now  occupied  —  and  for  a  long  time  ships  were 
so  little  in  demand  that  some  have  been  on  the  stocks  2  or  3  years 
without  a  purchaser  —  others  were  roofed  in  to  secure  them  against 
the  weather  and  in  one  instance  a  small  vessel  actually  rotted  upon 
the  stocks :  —  the  natural  consequence  of  these  discouragements  was 
that  the  journeymen  left  or  were  dismissed  from  their  employ  and 
resorted  to  Nova  Scotia  and  other  parts  of  the  King's  dominions 
where  they  could  earn  their  bread.  The  ship  wrights  for  the  most 
part  became  reduced  and  their  stock  of  timber  being  once  exhausted, 
they  had  no  means  of  replacing  it.  —  Within  the  last  twelve  months, 
my  Lord,  a  combination  of  circumstances  have  prevailed  to  give  some 
sort  of  relief  to  the  artificers  who  were  possessed  of  means  to  pursue 

1  Letters  of  Phiueas  Bond.     In  Annual  Report  of  the  American  Historical  Asso- 
ciation (Washington,  1897),  I,  638-9. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY    205 

their  trades:  —  The  prospect  of  an  efficient  government  —  the  scarcity 
in  Europe  —  large  crops  in  America  —  the  actual  want  of  vessels 
to  carry  off  the  produce  of  the  last  year,  all  operated  favorably,  the 
extension  of  the  China  trade  also  had  its  effect,  and  we  may  throw 
into  the  scale,  the  discrimination  made  by  the  late  Federal  impost 
laws  (No.  i),  by  which  a  discount  of  10%  is  allowed  upon  the  duties 
on  goods  and  merchandize  imported  in  vessels  owned  by  the  citizens 
of  America  —  All  these  matters  have  lately  drawn  forth  some  exer- 
tions in  the  matter  of  ship  building  —  the  number  of  vessels  now  on 
the  stocks  seem  in  a  train  of  being  brought  forward  as  fast  as  the 
scanty  resources  of  the  ship  builders  and  th^  reduced  number  of  hands 
will  admit,  these  are  not  soon  or  easily  supplied  so  let  the  encourage- 
ment be  what  it  may  years  must  elapse  before  this  useful  employment 
will  approach  the  conditions  of  profit  and  consequence  it  enjoyed 
antecedent  to  the  war  —  nor  is  it  at  all  improbable  that  a  reduction 
of  the  prices  of  flour  and  wheat  in  Europe  would  at  once  check  the 
present  exertion  and  cause  many  of  the  vessels  now  on  the  stocks  to 
be  left  dead  weight  upon  the  hands  of  the  ship  builders :  —  From  ah1 
I  have  observed  or  can  collect  my  opinion  is  that  the  general 
tonnage  of  the  United  States  does  not  increase,  but  that  the  tonnage 
of  New  Hampshire,  Mass.  Bay,  Pennsyla  and  Maryland  has  of  late 
advanced  and  is  now  advancing  in  some  degree  and  that  the  advance 
is  the  effect  of  adventitious  circumstances,  which  may  or  may  not 
continue: — In  short,  my  Lord  whatever  tends  to  encourage  the 
commerce  of  the  country,  will  enlarge  the  tonnage  of  the  country 
and  whatever  has  a  contrary  operation  will  produce  a  contrary  effect. 

E.  Comparative  Cost  of  American  and  French  Ships,  17 gi 1 

Owing  to  the  wealth  of  the  forest  resources,  an  American  ship  could  be  built 
for  about  $34  a  ton,  while  both  in  England  and  on  the  continent,  the  cost  was  at 
least  fifty  per  cent  higher.  Coxe  was  well  qualified  to  speak  on  this  subject,  and 
his  estimate  may  be  accepted  as  correct. 

The  french-built  ships  cost  from  55  to  60  dollars  per  ton,  when 
fitted  to  receive  a  cargo,  exclusively  of  sea  stores,  insurance,  the 
charges  of  lading,  outward  pilotage,  and  other  expenses  incidental 
to  the  employment,  and  not  to  the  building  and  outfit  of  a  vessel. 
The  american  live  oak  and  cedar  ships,  to  which  none  are  superior, 
cost  in  the  same  situation,  from  33  to  35  dollars,  finished  very  com- 
pletely. 

1  A  View  of  the  United  States  of  America.     By  Tench  Coxe  (Philadelphia,  1794), 
184. 


206 


READINGS  IN  ECONOMIC  HISTORY 


F.   Comparative  Cost  of  Operation  of  American  and  English  Vessels, 

1805 ! 

Not  merely  in  cost  of  construction,  but  also  in  cost  of  operation  did  an  American 
vessel  have  the  advantage  over  its  foreign  competitors.  Under  these  circumstances, 
it  is  no  wonder  that  the  growth  of  the  American  merchant  marine  should  have  been 
so  rapid  as  to  have  excited  astonishment  not  only  abroad  but  even  in  the  United 
States  itself.  It  is  interesting  to  note  that  this  estimate  of  comparative  costs  is 
furnished  by  an  English  authority. 

COMPARISON  OF  COST  or  OPERATION  OF  AN  AMERICAN  WITH  THAT  OF  AN  ENG- 
LISH VESSEL,  EACH  OF  250  TONS,  IN  1805 

On  a  voyage  between  England  and  America  and  return 
Cost  of  American  Vessel  of  250  tons,  £2,000. 
Cost  of  English  Vessel  of  250  tons,  £4,000. 

A  ship  of  250  tons  would  carry  3,000  bbls.  of  flour  at  9  s £1,350 

The  average  freight  from  England  back 600 

£1,950 


American  charges  £       s.    d. 

Insurance  out  &  home  on 

£2,500  at  45% 95 

8  men,  5  months  at  £5 200 

Captain  and  mate  at  £10 

each 100 

2400  Ibs.  bread  at  16  s 19      4 

Beef,  10  bbls.  at  32  s 16 

Pork,  10  bbls.  at  503 25 

150  gallons  rum 16     17 

Interest  of  £2000,  5  months  .  41     13     4 


English  charges  £          s.    d. 

Insurance  out  &  home  on 

£4,000  at  6  % 360 

12  men,  5  months  at  £5.  .    300 
Captain  and  mate  at  £10 

each zoo 

360  Ibs.  bread  for  14  people 

for  5  months  at  323. ...      57     12 
15  bbls.  of  beef  at  £4  ....      60 

15  bbls.  pork  at  903 67     10 

220  gallons  rum  at  5  s  ....     55 
Interest  on  £4000  5 

months 83       6     8 


1083       8    8 


G.  Foreign  Commerce,  1789-1807* 

One  of  the  results  of  the  Napoleonic  wars  was  to  divert  the  profitable  carrying 
trade  in  part  from  the  belligerent  nations  to  the  vessels  of  the  only  important 
neutral  nation,  the  United  States.  The  tonnage  of  American  ships  engaged  in 
foreign  trade  increased  greatly.  But  not  only  was  an  impetus  given  to  our  shipping; 
agriculture,  the  products  of  which  were  in  growing  demand  in  both  Europe  and 
England,  also  experienced  a  great  stimulus  and  shared  in  the  profits. 

1  Report  of  the  Committee  of  Correspondence  on  Trade  with  the  East  Indies  and 
China.    British  Parliamentary  Papers,  1815.     Quoted  in  Merchant  Venturers  of  Old 
Salem.     By  R.  E.  Peabody  (Boston,  1912),  151.     Printed  by  permission  of  the 
author  and  the  publishers,  Houghton  MifHin  Company. 

2  Statistical  Annals  .  .  .  of  the    United  States.     By   Adam    Seybert   (Phila- 
delphia, 1818),  59-60. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     207 

Independent  of  our  newly  acquired  political  character,  circum- 
stances arose  in  Europe,  by  which  a  new  and  extensive  field  was 
presented  for  our  commercial  enterprize.  The  most  memorable  of 
revolutions  was  commenced  in  France,  in  1789;  the  wars,  consequent 
to  that  event,  created  a  demand  for  our  exports,  and  invited  our 
shipping  for  the  carrying  trade  of  a  very  considerable  portion  of 
Europe;  we  not  only  carried  the  colonial  productions  to  the  several 
parent  states,  but  we  also  became  the  purchasers  of  them  in  the  French, 
Spanish  and  Dutch  colonies.  A  new  era  was  established  in  our 
commercial  history;  the  individuals,  who  partook  of  these  advantages, 
were  numerous ;  our  catalogue  of  merchants  was  swelled  much  beyond 
what  it  was  entitled  to  be  from  the  state  of  our  population.  Many 
persons,  who  had  secured  moderate  capitals,  from  mechanical  pur- 
suits, soon  became  the  most  adventurous.  x  The  predominant  spirit 
of  that  time  has  had  a  powerful  effect  in  determining  the  character  of 
the  rising  generation  in  the  United  States.  The  brilliant  prospects 
held  out  by  commerce,  caused  our  citizens  to  neglect  the  mechani- 
cal and  manufacturing  branches  of  industry;  ...  so  certain  were 
the  profits  on  the  foreign  voyages,  that  commerce  was  only  pursued 
as  an  art;  all  the  knowledge,  which  former  experience  had  considered 
as  essentially  necessary,  was  now  unattended  to;  the  philosophy  of 
commerce,  if  I  am  allowed  the  expression,  was  totally  neglected;  the 
nature  of  foreign  productions  was  but  little  investigated  by  the 
shippers  in  the  United  States;  the  demand  in  Europe  for  foreign 
merchandise,  especially  for  that  of  the  West  Indies  and  South  America, 
secured  to  all  these  cargoes  a  ready  sale,  with  a  great  profit.  The  most 
adventurous  became  the  most  wealthy,  and  that  without  the  knowledge 
of  any  of  the  principles  which  govern  commerce  under  ordinary  cir- 
cumstances. No  one  was  limited  to  any  one  branch  of  trade;  the 
same  individual  was  concerned  in  voyages  to  Asia,  South  America, 
the  West  Indies  and  Europe.  Our  tonnage  increased  in  a  ratio,  with 
the  extended  catalogue  of  the  exports;  we  seemed  to  have  arrived 
at  the  maximum  of  human  prosperity;  in  proportion  to  our  popu- 
lation we  ranked  as  the  most  commercial  nation;  in  point  of  value, 
our  trade  was  only  second  to  that  of  Great  Britain. 


1  We  have  no  trading  companies  under  the  authority  of  the  United  States. 
The  occupations  here  are  voluntary;  it  is  very  common  for  persons  to  change  their 
pursuits  frequently;  foreigners  enjoy  the  same  commercial  privileges  as  the  citizens 
of  the  United  States,  except,  that  aliens  cannot,  in  the  whole  or  in  part,  be  the  owners 
of  American  vesssels, 


208 


READINGS  IN  ECONOMIC  HISTORY 


H.   Tonnage  in  Foreign  and  Coasting  Trade,  1789-1815  l 

The  steady  growth  of  the  American  merchant  marine  during  the  period  under 
review  "has  no  parallel,"  according  to  Pitkin,  "in  the  commercial  annals  of  the 
world."  A  great  stimulus  was  given  to  our  carrying  trade  and  foreign  commerce 
by  the  absorption  of  the  European  nations  in  the  Napoleonic  wars. 

The  following  is  the  amount  of  tonnage  from  1789  to  1815  inclu- 
sive, with  its  employment,  in  the  foreign  trade  and  coasting  trade:  — 


Year 

Foreign  trade 

Coasting  trade 

1789 

123,893 

68,607 

1790 

346,254 

103,775 

1791 

363,110 

106,494 

1792 

4u,438 

120,957 

1793 

367,734 

114,853 

1794 

438,862 

167,227 

I79S 

529,470 

i64,795 

1796 

576,733 

i95>423 

1797 

597,777 

214,077 

1798 

603,376 

227,343 

1799 

669,197 

220,904 

1800 

669,921 

245,295 

1801 

718,549 

246,255 

1802 

560,380 

260,543 

1803 

597,157 

268,676 

1804 

672,530 

286,840 

1805 

749,341 

301,366 

1806 

808,284 

309,977 

1807 

848,306 

318,189 

1808 

769,053 

387,684 

1809 

910,059 

37i,5oo 

1810 

984,269 

37i,n4 

1811 

768,852 

386,258 

1812 

760,624 

443,180 

1813 

674,853 

433,404 

1814 

674,632 

425,713 

1815 

854,294 

435,066 

V.  INTERFERENCE  WITH  NEUTRAL  TRADE 
A.   Growth  of  the  Neutral  Trade,  1791-1816 z 

As  the  French  navy  was  unable  to  protect  her  own  merchant  vessels,  the  French 
government  opened  her  West  Indian  ports  to  American  ships,  which  began  to  carry 

1  A  Statistical  View  of  the  Commerce  of  the  United  States  of  A  merica.     By  Timothy 
Pitkin  (ad  edition,  New  York,  1817),  425-9,  passim. 

2  A  Statistical  View  of  the  Commerce  of  the  United  States  of  America.     By  Timothy 
Pitkin  (ad  edition,  New  York,  1817),  36-7. 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY    209 


her  colonial  products  to  France.  To  this  trade  England  objected,  whereupon  the 
American  vessels  trading  with  the  West  Indies  touched  first  at  an  American  port 
and  took  out  new  clearance  papers  before  proceeding  on  their  journey  to  France. 
The  growth  of  this  indirect  carrying  trade  may  be  studied  in  the  fourth  column  of 
the  table. 

The  whole  value  of  exports  in  each  year,  from  ijgo  to  1816,  and  the  value 
of  those  of  domestic  and  foreign  origin,  since  1803,  was  as  follows:  — 


To  Sept.  30 

Total  value  of 
exports. 
Dolls. 

Value  of  exports 
of  domestic  origin. 
Dolls. 

Value  of  exports 
of  foreign  origin. 
Dolls. 

I7OI 

19012  04  1 

1  702 

20.  7^3  008 

1703 

26,109,572 

1704. 

33,026,233 

I7QC 

47,o8o,472 

1706 

67,064,097 

I7O7 

56  850  2O6 

1708 

6  1    S27  OO7 

1  700 

78  665  522 

1800 

7O,Q7I,78o 

1801 

04,1  1^,02^ 

1802 

72,483,160 

1803 

55,800,033 

42,205,961 

13,594,072 

1804 

77,699,074 

41,467,477 

36,231,597 

1805 

95,566,021 

42,387,002 

53,179,019 

1806 

101,536,963 

41,253,727 

60,283,236 

1807 

108,343,150 

48,699,592 

59,643,558 

1808 

22,430,960 

9,433,546 

12,997,414 

1809 

52,203,283 

31,405,702 

20,797,531 

1810 

66,757,970 

42,366,675 

24,391,295 

1811 

61,316,833 

45,294,043 

16,022,790 

1812 

38,527,236 

30,032,109 

8,495,127 

1813 

27,855,997 

25,008,152 

2,847,845 

1814 

6,927,441 

6,782,272 

145,169 

1815 

52,557,753 

45,974,403 

6,583,350 

1816 

81,920,452 

64,781,896 

17,138,555 

B.   Frauds  of  the  Neutral  Flags,  1805  l 

The  evasion  of  the  English  prohibitions  upon  American  trade  between  the 
French  colonies  and  France  aroused  considerable  bitterness  in  England  and  led 

1  War  in  Disguise;  or,  the  Frauds  of  the  Neutral  Flags.     By  James  Stephen 
(London,  1805),  40-121,  passim. 


2io  READINGS  IN  ECONOMIC  HISTORY 

eventually  to  the  Orders  in  Council.  The  British  case  against  America  was  forcibly 
stated  by  Stephen,  an  English  barrister.  His  book  excited  a  great  deal  of 
attention  and  was  probably  an  important  factor  in  leading  to  reprisals  against  our 
commerce  by  Great  Britain. 

From  these  causes  it  has  naturally  happened  that  the  protection 
given  by  the  American  flag,  to  the  intercourse  between  our  European 
enemies  and  their  colonies,  since  the  instruction  of  January,  1794, 
has  chiefly  been  in  the  way  of  a  double  voyage,  in  which  America 
has  been  the  half-way  house,  or  central  point  of  communication. 
The  fabrics  and  commodities  of  France,  Spain,  and  Holland,  have 
been  brought  under  American  colours  to  ports  in  the  United  States; 
and  from  thence  re-exported,  under  the  same  flag,  for  the  supply 
of  the  hostile  colonies.  Again,  the  produce  of  those  colonies  has 
been  brought,  in  a  like  manner,  to  the  American  ports,  and  from 
thence  re-shipped  to  Europe.  .  .  . 

It  seems  scarcely  necessary  to  shew,  that,  by  this  practice,  the 
licence  accorded  by  the  British  Government  was  grossly  abused.  .  .  . 

By  the  merchants,  and  custom-house  officers  of  the  United  States, 
the  line  of  neutral  duty  in  this  case  was  evidently  not  misconceived; 
for  the  departures  from  it,  were  carefully  concealed,  by  artful  and 
fraudulent  contrivance.  When  a  ship  arrived  at  one  of  their  ports 
to  neutralize  a  voyage  that  fell  within  the  restriction,  e.  g.  from  a 
Spanish  colony  to  Spain,  all  her  papers  were  immediately  sent  on 
shore,  or  destroyed.  Not  one  document  was  left,  which  could  dis- 
close the  fact  that  her  cargo  had  been  taken  in  at  a  colonial  port: 
and  new  bills  of  lading,  invoices,  clearances,  and  passports  were  put 
on  board,  all  importing  that  it  had  been  shipped  in  America.  Nor 
were  official  certificates,  or  oaths  wanting,  to  support  the  fallacious 
pretence.  The  fraudulent  precaution  of  the  agents  often  went  so 
far,  as  to  discharge  all  the  officers  and  crew,  and  sometimes  even  the 
master,  and  to  ship  an  entire  new  company  in  their  stead,  who,  being 
ignorant  of  the  former  branch  of  the  voyage,  could,  in  case  of  examina- 
tion or  capture,  support  the  new  papers  by  their  declarations  and 
oaths,  as  far  as  their  knowledge  extended,  with  a  safe  conscience. 
Thus,  the  ship  and  cargo  were  sent  to  sea  again,  perhaps  within  eight 
and  forty  hours  from  the  time  of  her  arrival,  in  a  condition  to  defy 
the  scrutiny  of  any  British  cruizer,  by  which  she  should  be  stopped 
and  examined  in  the  course  of  her  passage  to  Europe.  .  .  . 

.  .  .  our  prize  courts  .  .  .  finding  themselves  to  have  been 
deceived  for  years  past  by  fallacious  evidence,  have  resolved  to  be 
cheated  in  the  same  way  no  longer.  It  is  on  this  account  only,  and 


AMERICAN   COMMERCE  AND   COMMERCIAL  POLICY     211 

the  consequent  capture  of  some  American  West  Indiamen  supposed 
to  be  practicing  the  old  fraud,  that  we  are  accused  of  insulting  the 
neutral  powers,  of-  innovating  on  the  acknowledged  law  of  nations, 
and  of  treating  as  contraband  of  war,  the  produce  of  the  West  India 
Islands.  .  .  . 

The  worst  consequence,  perhaps,  of  the  independence  and  growing 
commerce  of  America,  is  the  seduction  of  our  seamen.  We  hear 
continually  of  clamours  in  that  country,  on  the  score  of  its  sailors 
being  pressed  at  sea  by  our  frigates.  But  when,  and  how,  have 
these  sailors  become  Americans?  —  By  engaging  in  her  merchant 
service  during  the  last  and  the  present  war;  and  sometimes  by  ob- 
taining that  formal  naturalization,  which  is  gratuitously  given,  after 
they  have  sailed  two  years  from  an  American  port.  If  those  who  by 
birth,  and  by  residence  and  employment,  prior  to  1793,  were  con- 
fessedly British,  ought  still  to  be  regarded  as  his  Majesty's  subjects, 
a  very  considerable  part  of  the  navigators  of  American  ships,  are 
such  at  this  moment;  though,  unfortunately,  they  are  not  easily 
distinguishable  from  genuine  American  seamen.  .  .  . 

It  is  truly  vexatious  to  reflect,  that,  by  this  abdication  of  our 
belligerent  rights,  we  not  only  give  up  the  best  means  of  annoying 
the  enemy,  but  raise  up,  at  the  same  time,  a  crowd  of  dangerous 
rivals  for  the  seduction  of  our  sailors,  and  put  bribes  into  their  hands 
for  the  purpose.  We  not  only  allow  the  trade  of  the  hostile  colonies 
to  pass  safely,  in  derision  of  our  impotent  warfare,  but  to  be  carried 
on  by  the  mariners  of  Great  Britain.  This  illegitimate  and  noxious 
navigation,  therefore,  is  nourished  with  the  life  blood  of  our  navy. 

C.   British  Orders  in  Council  and  French  Decrees,  1803-1808  l 

During  the  Napoleonic  wars  from  1793  to  l&°3  the  carrying  trade  with  Europe 
had  fallen  into  the  hands  of  the  people  of  the  United  States,  who  were  the  only 
neutral  nation  of  commercial  importance.  The  profits  from  this  trade,  from 
ship-building,  and  from  the  production  and  exportation  of  foodstuffs,  had  been 
enormous.  But,  in  their  efforts  to  hurt  each  other,  England  and  France  inter- 
fered seriously  with  this  trade  and  disregarded  our  rights  as  neutrals.  The  follow- 
ing report  sums  up  briefly  some  of  these  injuries. 


1  Report  of  a  Committee  of  the  United  States  Senate  on  the  Negotiations  with  Great 
Britain.  American  State  Papers,  Series  Foreign  Relations  (Washington,  1832), 
III,  220-219  *• 

For  memorials  from  the  merchants  of  New  York  and  Philadelphia  in  1805,  see 
Ibid.,  II,  737-41;  and  for  the  documents  of  all  the  orders  and  decrees,  see  Ibid., 
Ill,  262-94. 


212  READINGS  IN  ECONOMIC  HISTORY 

In  Senate  of  the  U.  S.,  April  16,  1808. 

Mr.  Anderson,  from  the  committee  to  whom  was  referred,  on  the 
4th  instant,  the  correspondence  between  Mr.  Monroe  and  Mr. 
Canning,  and  between  Mr.  Madison  and  Mr.  Rose,  relative  to 
the  attack  made  upon  the  frigate  Chesapeake  by  the  British 
ship  of  war  Leopard;  and  also  the  communications  made  to 
the  Senate  by  the  President  of  the  United  States,  on  the  3oth 
day  of  March  last,  containing  a  letter  from  Mr.  Erskine  to  the 
Secretary  of  State,  and  a  letter  from  Mr.  Champagny  to  General 
Armstrong,  reported: 

That,  on  a  review  of  the  several  orders,  decrees,  and  decisions 
of  Great  Britain  and  France,  within  the  period  of  the  existing  war,  it 
appears  that,  previous  to  the  measures  referred  to  in  the  letters  from 
Mr.  Erskine  to  the  Secretary  of  State,  and  from  Mr.  Champagny  to 
General  Armstrong,  various  and  heavy  injuries  have  been  committed 
against  the  neutral  commerce  and  navigation  of  the  United  States 
under  the  following  heads: 

i st.  The  British  order  of  June,  1803,  unlawfully  restricting 
the  trade  of  the  United  States  with  a  certain  portion  of  the  unblock- 
aded  ports  of  her  enemies,  and  condemning  vessels  with  innocent  car- 
goes, on  a  return  from  ports  where  they  had  deposited  contraband 
articles. 

2d.  The  capture  and  condemnation,  in  the  British  courts  of 
admiralty,  of  American  property,  on  a  pretended  principle,  debarring 
neutral  nations  from  a  trade  with  the  enemies  of  Great  Britain  inter- 
dicted in  time  of  peace.  The  injuries  suffered  by  the  citizens  of  the 
United  States,  on  this  head,  arose,  not  from  any  public  order  of  the 
British  council,  but  from  a  variation  in  the  principle  upon  which 
the  courts  of  admiralty  pronounced  their  decisions.  These  decisions 
have,  indeed,  again  varied,  without  any  new  orders  of  council  being 
issued;  and  in  the  higher  courts  of  admiralty  some  of  the  decisions, 
which  had  formed  the  greatest  cause  for  complaint,  have  been  re- 
versed, and  the  property  restored.  There  still  remains,  however,  a 
heavy  claim  of  indemnity  for  confiscations  which  were  made  during 
the  period  of  these  unwarrantable  decisions,  and  for  which  all  nego- 
tiation has  hitherto  proved  unavailing. 

3d.  Blockades  notified  to  the  minister  of  the  United  States  at 
London,  and  thence  made  a  ground  of  capture  against  the  trade 
of  the  United  States,  in  entire  disregard  of  the  law  of  nations,  and 
even  of  the  definition  of  legal  blockades,  laid  down  by  the  British 


AMERICAN   COMMERCE  AND   COMMERCIAL  POLICY     213 

Government  itself.  Examples  of  these  illegitimate  blockades  will 
be  found  in  the  notifications  of  the  blockade  of  May  16,  1806,  of  the 
coast  from  the  river  Elbe  to  Brest,  inclusive;  blockade  of  nth  May, 
1807,  expounded  igth  June,  1807,  of  the  Elbe,  Weser,  and  Ems,  and 
the  coast  between  the  same;  blockade  nth  of  May,  1807,  of  the 
Dardanelles  and  Smyrna;  blockade  of  8th  January,  1808,  of  Cartha- 
gena,  Cadiz,  and  St.  Lucar,  and  of  all  the  intermediate  ports  between 
Carthagena  and  St.  Lucar,  comprehending  a  much  greater  extent 
of  coast  than  the  whole  British  navy  could  blockade  according  to 
the  established  law  of  nations. 

4th.  To  these  injuries,  immediately  authorized  by  the  British 
Government,  might  be  added  other  spurious  blockades  by  British 
naval  commanders,  particularly  that  of  the  island  of  Curacoa,  which, 
for  a  very  considerable  period,  was  made  a  pretext  for  very  extensive 
spoliations  on  the  commerce  of  the  United  States. 

5th.  The  British  proclamation  of  October  last,  which  makes  it 
the  duty  of  the  British  officers  to  impress  from  American  merchant 
vessels  all  such  of  their  crews  as  might  be  taken  or  mistaken  for 
British  subjects;  those  officers  being  the  sole  and  absolute  judges 
in  the  case. 

For  the  decrees  and  acts  of  the  French  Government  violating  the 
maritime  law  of  nations,  in  respect  to  the  United  States,  the  committee 
refer  to  the  instances  contained  in  the  report  of  the  Secretary  of  State, 
January  25,  1806,  to  the  Senate,  in  one  of  which,  viz:  a  decree  of  the 
French  General  Ferrand,  at  St.  Domingo,  are  regulations  sensibly 
affecting  the  neutral  and  commercial  rights  of  the  United  States. 

The  French  act,  next  in  order  of  time,  is  the  decree  of  November 
21,  1806,  declaring  the  British  isles  in  a  state  of  blockade,  and  pro- 
fessing to  be  a  retaliation  on  antecedent  proceedings  of  Great  Britain, 
violating  the  law  of  nations. 

This  decree  was  followed,  first,  by  the  British  order  of  January, 
1807,  professing  to  be  a  retaliation  on  that  decree,  and  subjecting 
to  capture  the  trade  of  the  United  States,  from  the  port  of  one  belliger- 
ent to  a  port  of  another;  and,  secondly,  by  the  orders  of  November 
last,  professing  to  be  a  further  retaliation  on  the  same  decree,  and 
prohibiting  the  commerce  of  neutrals  with  the  enemies  of  Great 
Britain,  as  explained  in  the  aforesaid  letter  of  Mr.  Erskine. 

These  last  British  orders  again  have  been  followed  by  the  French 
decree  of  December  17,  purporting  to  be  a  retaliation  on  the  said 
orders,  and  to  be  put  in  force  against  the  commerce  of  the  United 
States,  as  stated  in  the  aforesaid  letter  of  Mr.  Champagny. 


214  READINGS  IN  ECONOMIC  HISTORY 

The  committee  forbear  to  enter  into  a  comparative  view  of  these 
proceedings  of  the  different  belligerent  Powers,  deeming  it  sufficient 
to  present  the  materials  from  which  it  may  be  formed.  They  think 
it  their  duty,  nevertheless,  to  offer  the  following  remarks,  suggested 
by  a  collective  view  of  the  whole: 

The  injury  and  dangers  resulting  to  the  commerce  of  the  United 
States  from  the  course  and  increase  of  these  belligerent  measures, 
and  from  similar  ones  adopted  by  other  nations,  were  such  as  first 
to  induce  the  more  circumspect  of  our  merchants  and  ship-owners 
no  longer  to  commit  their  property  to  the  high  seas,  and  at  length 
to  impose  on  Congress  the  indispensable  duty  of  interposing  some 
legislative  provision  for  such  an  unexampled  state  of  things. 

Among  other  expedients,  out  of  which  a  choice  was  to  be  made, 
may  be  reckoned  — 

i  st.   A  protection  of  commerce  by  ships  of  war. 

2d.    A  protection  of  it  by  self-armed  vessels. 

3d.    A  war  of  offence  as  well  as  of  defence. 

4th.  A  general  suspension  of  foreign  commerce. 

5th.  An  embargo  on  our  vessels,  mariners,  and  merchandise. 

This  last  was  adopted,  and  the  policy  of  it  was  enforced,  at  the 
particular  moment,  by  accounts,  quickly  after  confirmed,  of  the 
British  orders  of  November,  and  by  the  probability  that  these  would 
be  followed,  as  has  also  happened  by  an  invigorated  spirit  of  retalia- 
tion in  other  belligerent  Powers;  the  happy  effect  of  the  precaution 
is  demonstrated  by  the  well-known  fact  that  the  ports  of  Europe 
are  crowded  with  captured  vessels  of  the  United  States,  unfortunately 
not  within  the  reach  of  the  precaution. 

D.   Effect  of  the  Embargo  on  New  York  City,  1807  1 

As  a  peaceful  mode  of  retaliation  for  the  indignities  and  injuries  received  by 
American  shipping  at  the  hands  of  the  French  and  English,  Congress  passed  the 
embargo  act,  which  prohibited  American  vessels  leaving  the  ports  of  the  United 
States  for  those  of  any  foreign  nation.  The  effect  of  the  embargo  upon  our  foreign 
trade  and  the  industries  contributory  to  it  was  immediate  and  disastrous.  A 
graphic  picture  of  conditions  in  New  York  City  before  and  after  the  embargo  is 
given  by  Lambert,  an  English  traveler  in  the  United  States. 

When  I  arrived  at  New  York  in  November  [[1807]],  the  port  was 
filled  with  shipping,  and  the  wharfs  were  crowded  with  commodities 

1  Travels  through  Canada,  and  the  United  States  of  North  America,  in  the  Years 
1806,  1807,  &•  1808.  By  John  Lambert  (ad  edition,  London,  1814),  II,  62-5, 
294-S- 


AMERICAN  COMMERCE  AND   COMMERCIAL  POLICY     215 

of  every  description.  Bales  of  cotton,  wool,  and  merchandize; 
barrels  of  pot-ash,  rice,  flour,  and  salt  provisions;  hogsheads  of 
sugar,  chests  of  tea,  puncheons  of  rum,  and  pipes  of  wine;  boxes, 
cases,  packs  and  packages  of  all  sizes  and  denominations,  were 
strewed  upon  the  wharfs  and  landing-places,  or  upon  the  decks  of 
the  shipping.  All  was  noise  and  bustle.  The  carters  were  driving 
in  every  direction;  and  the  sailors  and  labourers  upon  the  wharfs, 
and  on  board  the  vessels,  were  moving  their  ponderous  burthens 
from  place  to  place.  The  merchants  and  their  clerks  were  busily 
engaged  in  their  counting-houses,  or  upon  the  piers.  The  Tontine 
coffee-house  was  filled  with  under-writers,  brokers,  merchants,  traders, 
and  politicians;  selling,  purchasing,  trafficking,  or  insuring;  some 
reading,  others  eagerly  inquiring  the  news.  The  steps  and  balcony 
of  the  coffee-house  were  crowded  with  people  bidding,  or  listening 
to  the  several  auctioneers,  who  had  elevated  themselves  upon  a  hogs- 
head of  sugar,  a  puncheon  of  rum,  or  a  bale  of  cotton;  and  with 
Stentorian  voices  were  exclaiming,  "Once,  twice."  "Once,  twice." 
"Another  cent."  "Thank  ye,  gentlemen,"  or  were  knocking  down  the 
goods,  which  took  up  one  side  of  the  street,  to  the  best  purchaser. 
The  coffee-house  slip,  and  the  corners  of  Wall  and  Pearl-streets, 
were  jammed  up  with  carts,  drays,  and  wheel-barrows;  horses  and 
men  were  huddled  promiscuously  together,  leaving  little  or  no  room  for 
passengers  to  pass.  Such  was  the  appearance  of  this  part  of  the  town 
when  I  arrived.  Everything  was  in  motion;  all  was  life,  bustle, 
and  activity.  The  people  were  scampering  in  all  directions  to  trade 
with  each  other,  and  to  ship  off  their  purchases  for  the  European,  Asian, 
African,  and  West  Indian  markets.  Every  thought,  look,  word,  and 
action  of  the  multitude  seemed  to  be  absorbed  by  commerce;  the 
welkin  rang  with  its  busy  hum,  and  all  were  eager  in  the  pursuit  of 
its  riches. 

But  on  my  return  to  New  York  the  following  April,  what  a  con- 
rast  was  presented  to  my  view !  and  how  shall  I  describe  the  melan- 
loly  dejection  that  was  painted  upon  the  countenances  of  the 

3ple,  who  seemed  to  have  taken  leave  of  all  their  former  gaiety 
ind  cheerfulness?  The  coffee-house  slip,  the  wharfs  and  quays 
along  South-street,  presented  no  longer  the  bustle  and  activity  that 
had  prevailed  there  five  months  before.  The  port,  indeed,  was  full 
if  shipping;  but  they  were  dismantled  and  laid  up.  Their  decks 
vere  cleared,  their  hatches  fastened  down,  and  scarcely  a  sailor  was 
to  be  found  on  board.  Not  a  box,  bale,  cask,  barrel,  or  package,  was 

be  seen  upon  the  wharfs.     Many  of  the  counting-houses  were  shut 


216  ECONOMIC  READINGS  IN  HISTORY 

up,  or  advertised  to  be  let;  and  the  few  solitary  merchants,  clerks, 
porters,  and  labourers,  that  were  to  be  seen,  were  walking  about  with 
their  hands  in  their  pockets.  Instead  of  sixty  or  a  hundred  carts 
that  used  to  stand  in  the  street  for  hire,  scarcely  a  dozen  appeared, 
and  they  were  unemployed;  a  few  coasting  sloops,  and  schooners, 
which  were  clearing  out  for  some  of  the  ports  in  the  United  States, 
were  all  that  remained  of  that  immense  business  which  was  carried 
on  a  few  months  before.  The  coffee-house  was  almost  empty;  or,  if 
there  happened  to  be  a  few  people  in  it,  it  was  merely  to  pass  away 
the  time  which  hung  heavy  on  their  hands,  or  to  enquire  anxiously 
after  news  from  Europe,  and  from  Washington:  or  perhaps  to  pur- 
chase a  few  bills,  that  were  selling  at  ten  or  twelve  per  cent,  above 
par.  In  fact,  every  thing  presented  a  melancholy  appearance.  The 
streets  near  the  water-side  were  almost  deserted,  the  grass  had  begun 
to  grow  upon  the  wharfs,  and  the  minds  of  the  people  were  tortured 
by  the  vague  and  idle  rumours  that  were  set  afloat  upon  the  arrival 
of  every  letter  from  England  or  from  the  seat  of  government.  In 
short,  the  scene  was  so  gloomy  and  forlorn,  that  had  it  been  the 
month  of  September  instead  of  April,  I  should  verily  have  thought 
that  a  malignant  fever  was  raging  in  the  place;  so  desolating  were 
the  effects  of  the  embargo,  which  in  the  short  space  of  five  months 
had  deprived  the  first  commercial  city  in  the  States  of  all  its  life, 
bustle,  and  activity;  caused  above  one  hundred  and  twenty  bank- 
ruptcies; and  completely  annihilated  its  foreign  commerce!  .  .  . 

(April  13)  Everything  wore  a  dismal  aspect  at  New  York.  The 
embargo  had  now  continued  upwards  of  three  months,  and  the  salu- 
tary check  which  Congress  imagined  it  would  have  upon  the  conduct 
of  the  belligerent  powers  was  extremely  doubtful,  while  the  ruination 
of  the  commerce  of  the  United  States  appeared  certain,  if  such  de- 
structive measure  was  persisted  in.  Already  had  120  failures  taken 
place  among  the  merchants  and  traders,  to  the  amount  of  more 
than  5,000,000  dollars;  and  there  were  above  500  vessels  in  the 
harbour,  which  were  lying  up  useless,  and  rotting  for  want  of  em- 
ployment. Thousands  of  sailors  were  either  destitute  of  bread, 
wandering  about  the  country,  or  had  entered  into  the  British  service. 
The  merchants  had  shut  up  their  counting-houses,  and  discharged 
their  clerks,  and  the  farmers  refrained  from  cultivating  their  land; 
for  if  they  brought  their  produce  to  market,  they  either  could  not 
sell  at  all,  or  were  obliged  to  dispose  of  it  for  only  a  fourth  of  its 
value. 


AMERICAN  COMMERCE   AND   COMMERCIAL  POLICY     217 

E.    War  of  1812  l 

The  policy  of  remonstrance,  of  a  domestic  embargo,  and  of  non-intercourse 
with  England  proving  ineffective  in  securing  a  redress  of  American  grievances,  war 
was  finally  decided  upon.  The  tone  of  the  following  report  shows  the  high 
temper  to  which  the  people  had  been  aroused. 

MR.  CALHOUN,  from  the  Committee  on  Foreign  Relations,  to  whom 
was  referred  the  message  of  the  President  of  the  United  States 
of  the  ist  of  June,  1812,  made  the  following  report: 

That,  after  the  experience  which  the  United  States  have  had  of 
the  great  injustice  of  the  British  Government  towards  them,  exem- 
plified by  so  many  acts  of  violence  and  oppression,  it  will  be  more 
difficult  to  justify  to  the  impartial  world  their  patient  forbearance 
than  the  measures  to  which  it  has  become  necessary  to  resort,  to 
avenge  the  wrongs,  and  vindicate  the  rights  and  honor  of  the  nation. 
Your  committee  are  happy  to  observe,  on  a  dispassionate  review 
of  the  conduct  of  the  United  States,  that  they  see  in  it  no  cause  for 
censure.  .  .  . 

More  than  seven  years  have  elapsed  since  the  commencement  of 
this  system  of  hostile  aggression  by  the  British  Government  on  the 
rights  and  interests  of  the  United  States.  The  manner  of  its  com- 
mencement was  not  less  hostile  than  the  spirit  with  which  it  has 
been  prosecuted.  The  United  States  have  invariably  done  every 
thing  in  their  power  to  preserve  the  relations  of  friendship  with 
Great  Britain.  .  .  . 

From  this  review  of  the  multiplied  wrongs  of  the  British  Govern- 
ment since  the  commencement  of  the  present  war,  it  must  be  evident 
to  the  impartial  world  that  the  contest  wrhich  is  now  forced  on  the 
United  States  is  radically  a  contest  for  their  sovereignty  and  inde- 
pendence. Your  committee  will  not  enlarge  on  any  of  the  injuries, 
however  great,  which  have  had  a  transitory  effect.  They  wish  to 
call  the  attention  of  the  House  to  those  of  a  permanent  nature  only, 
which  intrench  so  deeply  on  our  most  important  rights,  and  wound 
so  extensively  and  vitally  our  best  interests,  as  could  not  fail  to  de- 
prive the  United  States  of  the  principal  advantages  of  their  resolu- 
tion, if  submitted  to.  The  control  of  our  commerce  by  Great  Britain, 
in  regulating  at  pleasure,  and  expelling  it  almost  from  the  ocean; 
the  oppressive  manner  in  which  these  regulations  have  been  carried 
into  effect,  by  seizing  and  confiscating  such  of  our  vessels,  with  their 

1  Report  of  the  House  Committee  on  Foreign  Relations.     American  State  Papers, 
Foreign  Relations  (Washington,  1832),  III,  567,  570. 


218  READINGS  IN  ECONOMIC  HISTORY 

cargoes,  as  were  said  to  have  violated  her  edicts,  often  without  pre- 
vious warning  of  their  danger;  the  impressment  of  our  citizens  from 
on  board  our  own  vessels,  on  the  high  seas,  and  elsewhere,  and  holding 
them  in  bondage  till  it  suited  the  convenience  of  their  oppressors  to 
deliver  them  up,  are  encroachments  of  that  high  and  dangerous 
tendency,  which  could  not  fail  to  produce  that  pernicious  effect;  nor 
would  those  be  the  only  consequences  that  would  result  from  it.  The 
British  Government  might,  for  a  while,  be  satisfied  with  the  ascen- 
dency thus  gained  over  us,  but  its  pretensions  would  soon  increase. 
The  proof  which  so  complete  and  disgraceful  a  submission  to  its 
authority  would  afford  of  our  degeneracy,  could  not  fail  to  inspire 
confidence  that  there  was  no  limit  to  which  its  usurpations  and  our 
degradations  might  not  be  carried.  Your  committee  believing  that 
the  freeborn  sons  of  America  are  worthy  to  enjoy  the  liberty  which 
their  fathers  purchased  at  the  price  of  so  much  blood  and  treasure, 
and  seeing  in  the  measures  adopted  by  Great  Britain  a  course  com- 
menced and  persisted  in  which  must  lead  to  a  loss  of  national  char- 
acter and  independence,  feel  no  hesitation  in  advising  resistance  by 
force,  in  which  the  Americans  of  the  present  day  will  prove  to  the 
enemy  and  to  the  world,  that  we  have  not  only  inherited  that  liberty 
which  our  fathers  gave  us,  but  also  the  will  and  power  to  maintain  it. 
Relying  on  the  patriotism  of  the  nation,  and  confidently  trusting 
that  the  Lord  of  Hosts  will  go  with  us  to  battle  in  a  righteous  cause, 
and  crown  our  efforts  with  success,  your  committee  recommend  an 
immediate  appeal  to  arms. 


CHAPTER   VII 

AGRICULTURE,  SLAVERY,   AND  INTERNAL   TRADE 

1783-1808 

•     I.  AGRICULTURE  IN  THE  NORTH 

A.   Effect  of  the  Revolution  on  Agriculture,  1783-1789  l 

The  disorganizing  effect  of  the  war  of  the  Revolution  upon  agriculture  is 
here  pictured,  and  also  the  difficulty  of  improvements. 

As  to  the  5th  article  of  inquiry  contained  in  your  Grace's  letter 
from  the  observation  I  have  myself  made  and  from  every  information 
I  can  collect,  the  agriculture  of  the  Middle  and  Southern  States  is 
certainly  increasing  at  this  time;  tho'  I  do  not  conceive  it  has  yet 
reached  its  level  antecedent  to  the  war. 

During  the  troubles  my  Lord  a  number  of  useful  labourers  were 
taken  from  the  pursuits  of  agriculture  and  employed  as  soldiers;  — 
the  diminution  of  useful  labor  occasioned  a  diminution  of  the  crops 
and  the  farmers  sustained  a  heavy  loss  thereby  —  but  a  very  consider- 
able discouragement  to  agriculture  existed  during  the  war,  the  inter- 
course with  Europe  and  the  W.  Indies  was  so  frequently  obstructed 
by  the  cruizers  that  the  farmer  found  no  certain  vent  for  his  produce 
and  fearful  that  the  little  he  raised  might  perish  on  his  hands  he 
looked  scarcely  further  than  to  the  nurture  of  his  family  and  became 
careless  of  cultivating  more  than  their  wants  required:  —  many  farm- 
ers too  quitted  their  homes  and  engaged  in  military  pursuits:  this 
course  of  life  promoted  dissipation  and  inspired  sentiments  very  in- 
compatible with  the  humility  of  agricultural  life :  —  Men  who  had 
commanded  in  the  field  could  not  suddenly  brook  a  return  to  their 
former  stations  —  the  ruinous  consequences  of  supineness  dissipation 
and  luxury  were  soon  severely  felt;  numbers  became  involved  in 
debt  —  their  farms  were  impoverished  and  their  farm  houses  fell  into 
decay,  so  that  upon  the  accession  of  peace  those  means  which  were 

1  Letters  of  Phineas  Bond.     In  Annual  Report  of  the  American  Historical  Asso- 
ciation (Washington,  1897),  I,  628-9. 


220  READINGS  IN  ECONOMIC  HISTORY 

formerly  exerted  for  the  purposes  of  tillage  and  improvement  were 
appropriated  to  the  discharge  of  old  debts,  (which  had  accumulated 
to  a  fearful  size)  and  to  the  payment  of  taxes  far  exceeding  those  of 
former  times.  —  These  inconveniences  are  gradually  wearing  away  — 
the  eyes  of  the  people  seem  now  to  be  opened  to  their  true  interests  — 
the  prospect  of  an  efficient  government  has  greatly  encouraged  them, 
industry  has  succeeded  to  idleness  and  husbandry  appears  to  be  in  a 
progressive  state  —  the  crop  of  the  last  harvest  was  uncommonly 
great,  the  exports  of  the  present  year  from  this  port  and  from  New 
York,  it  is  supposed  will  be  equal  to  those  of  any  former  years  whatever, 
tho'  perhaps  upon  an  average  calculation  for  several  years  to  come  it 
would  not  be  found  that  the  produce  of  this  state  at  this  rate  of 
computation  nearly  equals  what  it  was  before  the  war. 

B.   Agriculture  in  the  United  States,  i"/ -92  1 

Agriculture  had  probably  reached  its  lowest  ebb  in  the  United  States  in  the 
period  after  the  Revolution.  Coxe  here  gives  a  very  pessimistic  account  of  the 
conditions  then  existing. 

The  most  important  of  all  the  employments  of  our  citizens,  that 
of  the  farmer,  remains  to  be  noticed.  It  is  very  much  to  be  feared, 
that,  in  point  of  execution,  a  candid  examination  would  prove  this 
best  of  pursuits,  to  be  most  imperfectly  conducted.  The  proofs 
are,  innumerable  instances  of  impoverished  lands;  precious  bodies 
of  meadow  lands,  in  the  old  settlements  of  some  of  the  states,  which 
remain  in  a  state  of  nature;  a  frequent  inattention  to  the  making  or 
preserving  of  manure ;  as  frequent  inattention  to  the  condition  of  the 
seed  grain,  evidenced  by  the  growth  of  inferior  grain  in  fields  of  wheat, 
and  by  the  complexion  of  the  flour  in  some  quarters;  the  bad  con- 
dition of  barns,  stables,  and  fences,  and  in  some  places  the  total 
want  of  the  former;  the  deficiency  of  spring-houses  or  other  cool 
dairies,  in  extensive  tracts  of  country;  the  want  of  a  trifling  stock 
of  bees;  the  frequent  want  of  orchards,  and  the  neglect  of  those 
which  have  been  planted  by  preceding  occupants;  the  neglect  of  the 
sugar-tree;  the  neglect  of  fallen  timber  and  fuel,  accompanied  with 
the  extravagant  felling  of  timber  trees  for  fuel;  the  neglect  of  house- 
hold manufactures  in  many  families;  the  neglect  of  making  pot-ash; 
the  non-use  of  oxen;  and  above  all,  the  growth  in  substance  of  large 
bodies  of  farmers  on  lands  of  an  ordinary  quality,  while  the  inhabit- 

1  A  View  of  the  United  States  of  America.     By  Tench  Coxe  (Philadelphia,  1794), 
358^. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     221 

ants  of  extensive  scenes  hardly  extract,  from  much  superior  lands, 
sustenance  and  clothing. 

It  is  a  fact  very  painful  to  observe  and  unpleasant  to  represent, 
but  it  is  indubitably  true,  that  farming,  in  the  grain  states,  their 
great  best  business,  the  employment  most  precious  in  free  govern- 
ments, is,  too  generally  speaking,  the  least  understood,  or  the  least 
economically  and  attentively  pursued,  of  any  of  the  occupations 
which  engage  the  citizens  of  the  United  States.  It  is  acknowledged, 
however,  with  satisfaction,  that  great  changes  have  been  lately  made; 
and  that  the  energy,  spirit  of  improvement,  and  economy,  wrhich  have 
been  recently  displayed,  promise  the  regular  and  rapid  melioration  of 
the  agricultural  system.  All  other  things  have  taken  a  course  of 
great  improvement:  and  it  cannot  be  apprehended,  that  the  yeo- 
manry of  the  United  States  will  permit  themselves  to  be  exceeded 
by  any  of  their  brethren,  in  the  most  valuable  characteristic  of  good 
citizens  —  usefulness  in  their  proper  sphere. 

II.   AGRICULTURE  IN  THE  SOUTH 

A.   Agriculture  in  Virginia,  ij8j  l 

George  Washington  was  deeply  interested  in  the  promotion  of  scientific  agri- 
culture in  the  United  States,  and  corresponded  with  some  of  the  leading  men  in 
England  on  this  subject.  Arthur  Young,  to  whom  this  letter  was  addressed,  was 
probably  the  foremost  authority  in  England  on  the  subject  of  agriculture  and 
wrote  voluminously  on  this  topic.  Washington  introduced  a  plan  of  scientific 
rotation  of  crops  on  his  own  estate  instead  of  the  exhaustive  practice  of  continuous 
tobacco  growing. 

MOUNT  VERNON,  i  November,  1787. 

.  .  .  Before  I  undertake  to  give  the  information  you  request, 
respecting  the  arrangements  of  the  farms  in  this  neighborhood,  &c., 
I  must  observe  that  there  is,  perhaps,  scarcely  any  part  of  America, 
where  farming  has  been  less  attended  to  than  in  this  State.  The  culti- 
vation of  tobacco  has  been  almost  the  sole  object  wTith  men  of  landed 
property,  and  consequently  a  regular  course  of  crops  have  never  been 
in  view.  The  general  custom  has  been,  first  to  raise  a  crop  of  Indian 
corn  (maize)  which  according  to  the  mode  of  cultivation,  is  a  good 
preparation  for  wheat;  then  a  crop  of  wheat;  after  which  the  ground 
is  respited  (except  from  weeds,  and  every  trash  that  can  contribute 

1  Letters  to  Arthur  Young,  England,  containing  an  account  of  his  husbandry  tenth 
a  map  of  his  Farm,  his  Opinions  on  Various  Questions  in  Agriculture  and  many 
Particulars  of  the  Rural  Economy  of  the  United  States.  By  George  Washington 
(London,  1801).  Also  in  Writings  (Ford  edition,  New  York,  1891),  XI,  178-180. 


222  READINGS  IN  ECONOMIC  HISTORY 

to  its  foulness)  for  about  eighteen  months;  and  so  on,  alternately, 
without  any  dressing,  till  the  land  is  exhausted;  when  it  is  turned  out, 
without  being  sown  with  grass-seeds,  or  any  method  taken  to  restore  it; 
and  another  piece  is  ruined  in  the  same  manner.  No  more  cattle  is 
raised  than  can  be  supported  by  lowland  meadows,  swamps,  &c., 
and  the  tops  and  blades  of  Indian  corn;  as  very  few  persons  have 
attended  to  sowing  grasses,  and  connecting  cattle  with  their  crops. 
The  Indian  corn  is  the  chief  support  of  the  labourers  and  horses. 
Our  lands,  as  I  mentioned  in  my  first  letter  to  you,  were  originally 
very  good;  but  use,  and  abuse,  have  made  them  quite  otherwise. 
The  above  is  the  mode  of  cultivation  which  has  been  generally 
pursued  here,  but  the  system  of  husbandry  which  has  been  found 
so  beneficial  in  England,  and  which  must  be  greatly  promoted  by 
your  valuable  annals,  is  now  gaining  ground.  There  are  several 
(among  which  I  may  class  myself),  who  are  endeavoring  to  get  into 
your  regular  and  systematic  course  of  cropping,  as  fast  as  the  nature 
of  the  business  will  admit ;  so  that  I  hope  in  the  course  of  a  few  years, 
we  shall  make  a  more  respectable  figure  as  farmers,  than  we  have 
hitherto  done. 

B.   Farming  in  Maryland  and  Virginia,  1788 l 

In  the  states  of  Maryland  and  Virginia,  where  steady  cultivation  of  tobacco 
had  exhausted  the  land,  agriculture  was  at  a  very  low  ebb  during  the  second  half 
of  the  1 8th  century.  Some  of  the  more  progressive  farmers  were  beginning  to 
follow  more  diversified  farming  instead  of  growing  tobacco,  but  the  majority  did 
not  have  the  knowledge  or  the  energy  to  alter  traditional  practices. 

Cotton  is  cultivated  in  Maryland,  as  in  Virginia;  but  little  care 
is  taken  to  perfect  either  its  culture  or  its  manufacture.  You  see 
excellent  lands  in  these  two  states;  but  they  have  very  few  good 
meadows,  though  these  might  be  made  in  abundance.  For  want  of 
attention  and  labour,  the  inhabitants  make  but  little  hay;  and  what 
they  have  is  not  good.  They  likewise  neglect  the  cultivation  of 
potatoes,  carrots,  and  turnips  for  their  cattle,  of  which  their  neigh- 
bors of  the  north  make  great  use.  Their  cattle  are  left  without 
shelter  in  winter,  and  nourished  with  the  tops  of  Indian  corn.  Of 
consequence  many  of  them  die  with  cold  and  hunger;  and  those 
that  survive  the  winter,  are  miserably  meagre.  .  .  . 

Nothing  but  a  great  crop,  and  the  total  abnegation  of  every 
comfort,  to  which  the  negroes  are  condemned,  can  compensate  the 

1  New  Travels  in  the  United  States  of  America,  performed  in  1788.     By  J.  P. 
Brissot  de  Warville  (Dublin,  1792),  432,  436. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     223 

expenses  attending  this  production  [of  tobacco]  before  it  arrives  at 
the  market.  Thus  in  proportion  as  the  good  lands  are  exhausted,  and 
by  the  propagating  of  the  principles  of  humanity,  less  hard  labour  is 
required  of  the  slaves,  this  culture  must  decline.  And  thus  you  see 
already  in  Virginia  fields  enclosed,  and  meadows  succeed  to  tobacco. 
Such  is  the  system  of  the  proprietors  who  best  understand  their 
interest;  among  whom  I  place  General  Washington,  who  has  lately 
renounced  the  culture  of  this  plant. 


C.   Care  of  Live  Stock,  1794  l 

If  the  energies  of  Washington  had  not  been  so  thoroughly  absorbed  in  military 
and  political  services  to  his  country,  he  would  have  ranked  high  as  a  progressive 
and  scientific  farmer.  Among  the  men  with  whom  he  corresponded  on  agricultural 
subjects  and  whose  advice  he  sought  was  Sir  John  Sinclair,  who  was  the  first 
president  of  the  English  Board  of  Agriculture. 

PHILADELPHIA,  20  July,  1794. 
Sir: 

I  am  indebted  to  you  for  your  several  favours,  of  the  i5th  of 
August  and  4  of  September  of  the  last,  and  for  that  of  the  6th  of 
February  in  the  present  year;  for  which,  and  the  pamphlets  accom- 
panying them,  my  thanks  are  particularly  due.  .  .  . 

Our  domestic  animals  (as  well  as  our  agriculture)  are  inferior 
to  yours  in  point  of  size,  but  this  does  not  proceed  from  any  defect 
in  the  stamina  of  them;  but  to  deficient  care  in  providing  for  their 
support;  experience  having  abundantly  evidenced  that  where  our 
pastures  are  as  well  improved  as  the  soil  and  climate  will  admit, — 
where  a  competent  store  of  wholesome  provender  is  laid  up,  and  proper 
care  used  in  serving  it  —  that  our  horses,  black  cattle,  sheep,  &c.— 
are  not  inferior  to  the  best  of  their  respective  kinds  that  have  been 
imported  from  England.  Nor  is  the  wool  of  our  sheep  inferior  to 
that  of  the  common  sort  with  you. —  As  a  proof  —  after  the  peace 
of  Paris  in  1783,  and  my  return  to  the  occupation  of  a  farmer,  I 
paid  particular  attention  to  my  breed  of  sheep  (of  which  I  usually 
kept  about  seven  or  eight  hundred).  By  this  attention,  at  the  shear- 
ing of  1789,  the  fleeces  yielded  me  the  average  quantity  of  5^  of  wool  — 
a  fleece  of  which  promiscuously  taken,  I  sent  to  Mr.  Arthur  Young, 
who  put  it  for  examination  into  the  hands  of  manufacturers.  They 

1  Letters  to  Sir  John  Sinclair  on  Agriculture  and  other  interesting  topics.  By 
George  Washington  (London,  1801).  Also  in  Writings  (Ford  edition,  New  York, 
1891),  XII,  440-4. 


224  READINGS  IN  ECONOMIC  HISTORY 

pronounced  it  to  be  equal  in  quality  to  the  Kentish  wool.  In  the 
same  year  (i.e.  1789)  I  was  again  called  from  my  home,  and  have 
not  had  it  in  my  power  since  to  pay  any  attention  to  my  farms.  The 
consequence  of  which  is,  that  my  sheep  at  the  last  shearing,  yielded 
me  not  more  than  2\. 

This  is  not  a  single  instance  of  the  difference  between  care  and 
neglect.  Nor  is  the  difference  between  good  and  bad  management 
confined  to  that  species  of  stock,  for  we  find  that  good  pastures  and 
proper  attention  can,  and  does  fill  our  markets  with  beef  of  seven, 
eight,  and  more  hundredweight  the  four  quarters;  whereas  from 
450  to  500  (especially  in  the  States  south  of  this,  where  less  attention 
hitherto  has  been  paid  to  grass)  may  be  found  about  the  average 
weight. —  In  this  market  some  bullocks  were  killed  in  the  months 
of  March  and  April  last,  the  weights  of  which  as  taken  from  the 
accounts  which  were  published  at  the  tune,  you  will  find  in  a  paper 
enclosed.  These  were  pampered  steers,  but  from  800  to  1000,  the 
four  quarters,  is  no  uncommon  weight. 


D.  History  of  Cotton  Growing,  1775-1795  l 

The  inventions  of  Hargreaves,  Arkwright,  Crompton,  and  Cartwright  in  Eng- 
land between  1770  and  1785,  which  revolutionized  the  cotton  industry,  created  an 
immense  demand  for  cotton,  but  until  the  invention  of  the  cotton  gin,  little  cotton 
was  grown  for  export  in  this  country.  Ramsay  wrote  his  History  in  1808,  though 
it  was  not  published  until  fifty  years  later. 

.  .  .  The  first  Provincial  Congress  in  South  Carolina,  held  in 
January,  1775,  recommended  to  the  inhabitants  "to  raise  cotton," 
yet  very  little  practical  attention  was  paid  to  their  recommendation. 
A  small  quantity  only  was  raised  for  domestic  manufactures.  This 
neglect  cannot  solely  be  referred  to  the  confusion  of  the  times,  for 
agriculture  had  been  successfully  prosecuted  for  ten  years  after  the 
termination  of  the  Revolutionary  war  before  the  Carolinians  began 
to  cultivate  it  to  any  considerable  extent.2  In  this  culture  the 
Georgians  took  the  lead.  They  began  to  raise  it  as  an  article  of  export 
soon  after  the  peace  of  1783.  Their  success  recommended  it  to  their 


1  History  of  South  Carolina.     By  David  Ramsay  (Newberry,  S.  C.,  1858),  II, 

I2O-I. 

2  The  labor-saving  machines  invented  in  England  within  the  last  thirty-five 
years,  greatly  promoted  the  manufacture  of  cotton,  and  thereby  opened  a  steady 
and  advantageous  market  for  the  raw  materials.     This  was  one  of  the  principal 
causes  which  encouraged  its  cultivation  in  the  United  States. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     225 

neighbors.  The  whole  quantity  exported  from  Carolina  in  any  one 
year  prior  to  1795  was  inconsiderable,  but  in  that  year  it  amounted 
to  £i,io9,653.1  The  cultivation  of  it  has  been  ever  since  in- 
creasing, and  on  the  first  year  of  the  present  century  eight  million 
of  pounds  were  exported  from  South  Carolina.  .  .  . 

The  cotton  chiefly  cultivated  on  the  sea-coast  is  denominated  the 
black  seed  or  long  staple  cotton,  which  is  of  the  best  quality  and 
admirably  adapted  to  the  finest  manufactures.  The  wool  is  easily 
separated  from  the  seed  by  roller-gins  which  do  not  injure  the  staple. 
A  pair  of  rollers  worked  by  one  laborer  give  about  twenty-five  pounds 
of  clean  cotton  daily.  The  cotton  universally  cultivated  in  the 
middle  and  upper  country  is  called  the  green  seed  kind.  It  is  less 
silky  and  more  wooly,  and  adheres  so  tenaciously  to  the  seed  that  it 
requires  the  action  of  a  saw-gin  to  separate  the  wool  from  the  seed. 
This  cuts  the  staple  exceedingly;  but  as  the  staple  of  this  kind  of 
cotton  is  not  fit  for  the  finer  fabrics  it  is  not  considered  injurious. 
The  quality  of  these  two  kinds  is  very  different.  The  wool  of  the 
green  seed  is  considerably  the  cheapest ;  but  that  species  is  much 
more  productive  than  the  other.  An  acre  of  good  cotton  land  will 
usually  produce  one  hundred  and  fifty  pounds  of  clean  wool  of  the 
long  staple  kind.  An  acre  of  land  of  equal  quality  will  usually  pro- 
duce two  hundred  pounds  of  the  green  seed  or  short  staple  kind. 
Besides  these,  yellow  or  nankeen  cotton  is  also  cultivated  in  the  upper 
country  for  domestic  use.  Two  ingenious  artists,  Miller  and 
Whiteney  of  Connecticut,  invented  a  saw-gin  for  the  separation  of 
the  wool  from  the  seed  which  has  facilitated  that  operation  in  the 
highest  degree.  The  Legislature  of  South  Carolina  purchased  their 
patent-right  for  50,000  dollars,  and  then  munificently  threw  open 
its  use  and  benefits  to  all  its  citizens. 


E.  Invention  of  the  Cotton  Gin,  i/pj 2 

The  work  of  separating  the  seeds  from  the  lint  of  the  cotton  was  at  first  done  by 
hand.  But  this  was  a  very  tedious  and  slow  process.  Whitney  wrote  that  he 
had  never  seen  anyone  who  claimed  that  he  could  clean  as  much  as  one  pound  a 
day  in  this  way.  At  this  rate  it  would  take  almost  two  years  for  one  person  to 
clean  a  bale  of  cotton.  The  importance  of  Whitney's  invention  becomes  evident 
when  we  learn  that  it  would  clean  300  pounds  of  cotton  in  a  day. 


1  The  author  evidently  means  pounds  avoirdupois.  —  Ed. 

2  Correspondence  of  Eli  Whitney.    In  American  Historical  Review  (New  York, 
198),  III,  99-101. 


226  READINGS  IN  ECONOMIC  HISTORY 

NEW  HAVEN,  Sept.  nth,  1793. 

DEAR  PARENT,  —  I  received  your  letter  of  the  i6th  of  August 
with  peculiar  satisfaction  and  delight.  It  gave  me  no  small  pleasure 
to  hear  of  your  health  and  was  very  happy  to  be  informed  that  your 
health  and  that  of  the  family  has  been  so  good  since  I  saw  you.  I 
have  fortunately  just  heard  from  you  by  Mr.  Robbinson  who  says 
you  were  well  when  he  left  Westboro.  When  I  wrote  you  last  I 
expected  to  have  been  able  to  come  to  Westboro'  sooner  than  I  now 
fear  will  be  in  my  power.  I  presume,  sir,  you  are  desirous  to  hear 
how  I  have  spent  my  time  since  I  left  College.  This  I  conceive  you 
have  a  right  to  know  and  that  it  is  my  duty  to  inform  you  and  should 
have  done  it  before  this  tune;  but  I  thought  I  could  do  it  better  by 
verbal  communication  than  by  writing,  and  expecting  to  see  you  soon, 
I  omitted  it.  As  I  now  have  a  safe  and  direct  opportunity  to  send 
by  Mr.  Robbinson,  I  will  give  you  a  sumary  account  of  my  southern 
expedition. 

I  went  from  N.  York  with  the  family  of  the  late  Major  General 
Greene  to  Georgia.  I  went  immediately  with  the  family  to  their 
Plantation  about  twelve  miles  from  Savannah  with  an  expectation 
of  spending  four  or  five  days  and  then  proceed  into  Carolina  to  take 
the  school  as  I  have  mentioned  in  former  letters.  During  this  time 
I  heard  much  said  of  the  extreme  difficulty  of  ginning  Cotton,  that  is, 
seperating  it  from  its  seeds.  There  were  a  number  of  very  respectable 
Gentlemen  at  Mrs.  Greene's  who  all  agreed  that  if  a  machine  could 
be  invented  which  would  clean  the  cotton  with  expedition,  it  would 
be  a  great  thing  both  to  the  Country  and  to  the  inventor.  I  involun- 
tarily happened  to  be  thinking  on  the  subject  and  struck  out  a  plan 
of  a  Machine  in  my  mind,  which  I  communicated  to  Miller,  (who  is 
agent  to  the  Executors  of  Genl.  Greene  and  resides  in  the  family,  a 
man  of  respectibility  and  property)  he  was  pleased  with  the  Plan 
and  said  if  I  would  pursue  it  and  try  an  experiment  to  see  if  it  would 
answer,  he  would  be  at  the  whole  expense,  I  should  loose  nothing  but 
my  time,  and  if  I  succeeded  we  would  share  the  profits.  Previous 
to  this  I  found  I  was  like  to  be  disappointed  in  my  school,  that  is, 
instead  of  a  hundred,  I  found  I  could  get  only  fifty  Guineas  a  year. 
I  however  held  the  refusal  of  the  school  untill  I  tried  some  experiments. 
In  about  ten  Days  I  made  a  little  model,  for  which  I  was  offered,  if  I 
would  give  up  all  right  and  title  to  it,  a  Hundred  Guineas.  I  concluded 
to  relinquish  my  school  and  turn  my  attention  to  perfecting  the 
Machine.  I  made  one  before  I  came  away  which  required  the  labor 
of  one  man  to  turn  it  and  with  which  one  man  will  clean  ten  times  as 


AGRICULTURE,   SLAVERY   AND   INTERNAL  TRADE     227 

much  cotton  as  he  can  in  any  other  way  before  known  and  also 
cleanse  it  much  better  than  in  the  usual  mode.1  This  machine  may 
be  turned  by  water  or  with  a  horse,  with  the  greatest  ease,  and  one 
man  and  a  horse  will  do  more  than  fifty  men  with  the  old  machines. 
It  makes  the  labor  fifty  times  less,  without  throwing  any  class  of 
People  out  of  business. 

I  returned  to  the  Northward  for  the  purpose  of  having  a  machine 
made  on  a  large  scale  and  obtaining  a  Patent  for  the  invintion.  .  .  . 
How  advantageous  this  business  will  eventually  prove  to  me,  I  cannot 
say.  It  is  generally  said  by  those  who  know  anything  about  it,  that 
I  shall  make  a  Fortune  by  it.  I  have  no  expectation  that  I  shall  make 
an  independent  fortune  by  it,  but  think  I  had  better  pursue  it  than 
any  other  business  into  which  I  can  enter.  Something  which  cannot 
be  foreseen  may  frustrate  my  expectations  and  defeat  my  Plan;  but 
I  am  now  so  sure  of  success  that  ten  thousand  dollars,  if  I  saw  the 
money  counted  out  to  me,  would  not  tempt  me  to  give  up  my  right 
and  relinquish  the  object.  I  wish  you,  sir,  not  to  show  this  letter 
nor  communicate  anything  of  its  contents  to  any  body  except  My 
Brothers  and  Sister,  enjoining  it  on  them  to  keep  the  whole  a  pro- 
found secret.  .  .  . 

With  respects  to  Mama 2 1  am, 

kind  Parent,  your  most  obt.  Son 
Mr.  Eli  Whitney.  Eli  Whitney,  Junr. 

F.    Effect    of  the    Cotton  Gin    upon  Export    of  Cotton,   1791-1811 3. 

As  soon  as  it  became  possible  to  clean  cotton  quickly  and  cheaply,  a  rapidly 
growing  export  trade  sprang  up,  most  of  it  with  England. 

In  1790,  the  growth  of  American  cotton  wool  was  problematical. 
The  extent  to  which  the  production  of  this  raw  material  has  been 
subsequently  carried,  enriched  the  nation,  and  very  much  contrib- 
uted to  lessen  the  demand  for  slaves.  Prior  to  1790,  the  Dutch 
settlements  in  Surinam,  and  other  parts  of  the  West  Indies,  were 
considered  as  the  countries,  from  which  the  manufactories  in  the 

1  In  a  letter  to  Jefferson,  dated  Nov.  24,  1793,  Whitney  stated  that  with  this 
machine  "it  is  the  stated  task  of  one  negro  to  clean  fifty  weight  (I  mean  fifty 
pounds  after  it  is  seperated  from  the  seed),  of  the  green  seed  cotton  per  day." 
Olmsted,  Memoir  of  Eli  Whitney,  Esq.,  p.  17. 

2  Eli  Whitney's  step-mother.     His  own  mother  died  while  he  was  still  a  young 
lad. 

8  Statistical    Annals  .  .  .  of    the    United    States    of    America.      By     Adam 
Seybert  (Philadelphia,  1818),  92. 


228  READINGS  IN  ECONOMIC  HISTORY 

United  States  might  be  supplied  with  cotton  wool.  In  1791,  the 
first  parcel  of  cotton,  of  American  growth,  was  exported  from  the 
United  States,  and  amounted  only  to  19,200  Ibs. !  The  cotton  wool 
of  the  growth  of  the  United  States,  exported  in  1809-10,  amounted 
to  93,361,462  Ibs.;  besides,  in  that  year,  it  has  been  estimated  that 
16,000,000  Ibs.  were  consumed  in  our  manufactories.  Calculated  on 
the  average  of  the  six  years,  from  1806  to  1811,  there  was  annually 
imported  into  Great  Britain  from  the  United  States,  34,568,487  Ibs.1 
and  in  1811,  46,872,4^2  Ibs.  Calculated  on  the  average  of  the  five 
years,  from  1805  to  1809,  there  was  annually  imported  into  Great 
Britain  from  all  parts  of  the  world,  69,181,885  Ibs.2  In  1755,  the 
cotton  manufacture,  in  England,  was  ranked  "amongst  the  humblest 
of  the  domestic  arts;"  the  products  of  this  branch,  were  then  almost 
entirely  for  home  consumption;  in  1797,  it  took  the  lead  of  all  the 
other  manufactures  in  Great  Britain,  and  in  1809,  gave  employment 
to  800,000  persons,  and  its  annual  value  was  estimated  at  £30,000,000 
sterling,  or  132,000,000  dollars! 

G.   Agriculture  in  the  Carolinas  and  Georgia,  1802  3 

The  decline  in  the  profitableness  of  indigo  and  tobacco  had  brought  the  agri- 
culture of  this  section  into  a  transitional  period  of  its  development.  If  the  cotton 
gin  had  not  been  invented  they  might  have  developed  mixed  farming.  As  it  was, 
however,  South  Carolina  and  Georgia  turned  eagerly  to  this  new  crop,  and  in  1801 
produced  three  quarters  of  all  that  was  grown  in  the  United  States,  the  remainder 
coming  from  North  Carolina  and  Virginia.  In  South  Carolina,  rice  was  still  culti- 
vated, though  not  so  generally. 

The  two  Carolinas  and  Georgia  are  naturally  divided  into  the 
upper  and  lower  countries,  but  the  upper  embraces  a  greater 
extent.  .  .  . 

Through  the  whole  of  the  country  the  nature  of  the  soil  is  adapted 
for  the  growth  of  wheat,  rye,  and  Indian  corn.  Good  land  produces 
upward  of  twenty  bushels  of  Indian  wheat  per  acre,  which  is  commonly 
worth  about  half  a  dollar  per  bushel.  A  general  consumption  is 
made  of  it  for  the  support  of  the  inhabitants  since,  except  those  who 
are  of  German  origin,  there  are  very  few,  as  we  have  before  remarked, 
that  make  use  of  wheaten  bread.  The  growth  of  corn  is  very  cir- 

1  Naval  Chronicle,  for  1811,  p.  281. 

*  Monthly  Magazine,  vol.  xxx,  p.  115.  In  1705,  only  1,170,881  Ibs.  of  cotton 
wool  were  imported  into  England.  In  1810,  Sir  Robert  Peel  stated,  in  the  House 
of  Commons,  that  135,000,000  Ibs.  had  been  imported  that  year! 

3  Travels  to  the  Westward  of  the  Allegany  Mountains.  By  F.  A.  Michaux 
(London,  1805),  278,  288. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     229 

cumscribed,  and  the  small  quantity  of  flour  that  is  exported  to 
Charleston  and  Savannah  is  sold  fifteen  per  cent,  cheaper  than  that 
imported  from  Philadelphia. 

The  low  price  to  which  tobacco  is  fallen  in  Europe  within  these 
few  years,  has  made  them  give  up  the  culture  of  it  in  this  part  of  the 
country.  That  of  green-sea  cotton  has  resumed  its  place,  to  the  great 
advantage  of  the  inhabitants,  many  of  whom  have  since  made  their 
fortunes  by  it.  The  separation  of  the  seed  from  the  felt  that  en- 
velops them  is  a  tedious  operation,  and  which  requires  many  hands, 
is  now  simplified  by  a  machine  for  which  the  inventor  has  obtained 
a  patent  from  the  federal  government.  .  .  . 

The  best  rice  plantations  are  established  in  the  great  swamps, 
that  favour  the  watering  of  them  when  convenient.  The  harvests 
are  abundant  there,  and  the  rice  that  proceeds  from  them,  stripped 
of  its  husk,  is  larger,  more  transparent,  and  is  sold  dearer  than  that 
which  is  in  a  drier  soil,  where  they  have  not  the  means  or  facility  of 
irrigation.  The  culture  of  rice  in  the  southern  and  maritime  part 
of  the  United  States  has  greatly  diminished  within  these  few  years; 
it  has  been  in  a  great  measure  replaced  by  that  of  cotton,  which  affords 
greater  profit  to  the  planters,  since  they  compute  a  good  cotton  har- 
vest equivalent  to  two  of  rice.  The  result  is,  that  many  rice  fields 
have  been  transformed  into  those  of  cotton,  avoiding  as  much  as 
possible  the  water  penetrating. 

III.   SLAVERY 
A.   Poor  Whites  and  Slaves  in  Virginia,  1780  l 

The  position  of  the  poor  white,  in  a  community  where  most  of  the  labor  was 
performed  by  negro  slaves,  was  a  difficult  one,  and  the  problem  to  which  it  gave 
rise  became  more  important  in  a  later  period.  But  even  at  this  earlier  date,  his 
lot  in  a  state  like  Virginia  could  arouse  the  attention  of  an  intelligent  and  sympa- 
thetic observer  like  Chastellux.  This  writer  was  a  French  officer  who  served 
in  the  Revolution. 

.  .  .  But  if  Reason  ought  to  blush  at  beholding  such  prejudices 
so  strongly  established  amongst  a  new  people,  Humanity  has  still 
more  to  suffer  from  the  state  of  poverty,  in  which  a  great  number  of 
white  people  lives  in  Virginia.  It  is  in  this  country  that  I  saw  poor 
persons,  for  the  first  time,  after  I  passed  the  sea;  for,  in  the  midst  of 
those  rich  plantations,  where  the  negro  alone  is  wretched,  miserable 
huts  are  often  to  be  met  with,  inhabited  by  whites,  whose  wane  looks, 

1  Travels  in  North  America,  in  the  Years  1780,  1781,  and  1782.     By  the  Marquis 
CF.  JO  Chastellux  (London,  1787),  190-9. 


230  READINGS  IN  ECONOMIC  HISTORY 

and  ragged  garments,  bespeak  poverty.  At  first  I  was  puzzled  to 
explain  to  myself,  how,  in  a  country  where  there  is  still  so  much  land 
to  clear,-  men  who  do  not  refuse  to  work  should  remain  in  misery; 
but  I  have  since  learned,  that  all  these  useless  territories,  these  im- 
mense estates,  with  which  Virginia  is  covered,  have  their  proprietors. 
Nothing  is  more  common  than  to  see  some  of  them  possessing  five  or 
six  thousand  acres  of  land,  who  clear  out  only  as  much  as  their 
negroes  can  cultivate ;  yet  will  they  not  give,  or  even  sell  the  smallest 
portion  of  them,  because  they  form  a  part  of  their  possessions,  and 
they  are  in  hopes  of  one  day  augmenting  the  number  of  their  negroes. 
These  white  men,  without  fortune,  and  frequently  without  industry, 
are  straitened,  therefore,  on  every  side,  and  reduced  to  the  small 
number  of  acres  they  are  able  to  acquire.  Now,  the  land  not  being 
good  in  general  in  America,  especially  in  Virginia,  a  considerable 
number  of  them  is  necessary,  in  order  to  clear  it  with  success,  because 
they  are  the  cattle  from  which  the  cultivator  derives  his  aid  and  his 
subsistence.  To  the  eastward  are  a  great  number  of  cleared  grounds, 
but  the  portions  of  land  which  are  easily  purchased  there,  and  for 
almost  nothing,  consist  always  of  at  least  two  hundred  acres;  besides, 
that  to  the  southward,  the  climate  is  less  healthy,  and  the  new  set- 
tlers, without  partaking  of  the  wealth  of  Virginia,  share  all  the  incon- 
veniences of  the  climate,  and  even  the  indolence  it  inspires. 

Beneath  this  class  of  inhabitants  we  must  place  the  negroes,  whose 
situation  would  be  still  more  lamentable,  did  not  their  natural  in- 
sensibility extenuate,  in  some  degree,  the  sufferings  annexed  to 
slavery.  On  seeing  them  ill-lodged,  ill-cloathed,  and  often  oppressed 
with  labour,  I  concluded  that  their  treatment  was  as  rigorous  as 
elsewhere.  I  have  been  assured,  however,  that  it  is  extremely  mild, 
in  comparison  with  what. they  suffer  in  the  sugar  colonies;  .  .  . 

I  must  likewise  do  the  Virginians  the  justice  to  declare,  that  many 
of  them  treat  their  negroes  with  great  humanity.  I  must  add, 
likewise,  a  still  more  honourable  testimony,  that  in  general  they 
seem  afflicted  to  have  any  slavery,  and  are  constantly  talking  of 
abolishing  it,  and  of  contriving  some  other  means  of  cultivating  their 
estates.  It  is  true  that  this  opinion,  which  is  almost  generally  re- 
ceived, is  inspired  by  different  motives.  The  philosophers,  and  the 
young  men,  who  are  almost  all  educated  in  the  principles  of  a  sound 
philosophy,  regard  nothing  but  justice  and  the  rights  of  humanity. 
The  fathers  of  families,  and  such  as  are  principally  occupied  with 
schemes  of  interest,  complain  that  the  maintenance  of  their  negroes 
is  very  expensive;  that  their  labour  is  neither  so  productive  nor  so 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     231 

cheap,  as  that  of  day  labourers,  or  white  servants;  and,  lastly,  that 
epidemical  disorders,  which  are  very  common,  render  both  their 
property  and  their  revenue  extremely  precarious. 

B.   Decline  of  Slavery,  1788  l 

Owing  to  the  impossibility  of  employing  slave  labor  in  the  staple  industries  of 
the  north,  slavery  was  gradually  dying  out  in  that  section.  Even  in  the  south, 
with  the  decline  in  the  profitableness  of  tobacco,  there  was  a  growing  movement 
in  favor  of  abolition.  Brissot's  liberal  philosophy  and  horror  of  the  institution 
of  slavery  led  him  at  times  into  doubtful  generalizations. 

Three  distinct  epochs  mark  the  conduct  of  the  Americans  in  this 
business  —  the  prohibition  of  the  importation  of  slaves  —  their 
manumission  —  and  the  provision  made  for  their  instruction.  All 
the  different  States  are  not  equally  advanced  in  these  three  objects. 

In  the  Northern  and  Middle  States,  they  have  proscribed  for 
ever  the  importation  of  slaves;  in  others,  this  prohibition  is  limited 
to  a  certain  time.  In  South  Carolina,  where  it  was  limited  to  three 
years,  it  has  lately  been  extended  to  three  years  more.  Georgia 
is  the  only  State  that  continues  to  receive  transported  slaves.  .  .  . 

Slavery,  my  friend,  has  never  polluted  every  part  of  the  United 
States.  There  was  never  any  law  in  New  Hampshire,  or  Massa- 
chusetts, which  authorized  it.  When,  therefore,  those  States  pro- 
scribed it,  they  only  declared  the  law  as  it  existed  before.  There 
was  very  little  of  it  in  Connecticut;  the  puritanic  austerity  which 
predominated  in  that  colony,  could  scarcely  reconcile  itself  with 
slavery.  Agriculture  was  better  performed  there  by  the  hands  of 
freemen;  and  everything  concurred  to  engage  the  people  to  give 
liberty  to  the  slaves: — so  that  almost  everyone  has  freed  them; 
and  the  children  of  such  as  are  not  yet  free,  are  to  have  their  liberty 
at  twenty-five  years  of  age. 

The  case  of  the  Blacks  in  New- York  is  nearly  the  same;  yet  the 
slaves  there  are  more  numerous. 

It  is  because  the  basis  of  the  population  there  is  Dutch;  that  is 
to  say,  people  less  disposed  than  any  other  to  part  with  their  property. 
But  liberty  is  assured  there  to  all  the  children  of  the  slaves,  at  a  cer- 
tain age.  The  State  of  Rhode-Island  formerly  made  a  great  business 
of  the  slave  trade.  It  is  now  totally  and  for  ever  prohibited. 

In  New  Jersey  the  bulk  of  the  population  is  Dutch.  You  find 
there,  traces  of  that  same  Dutch  spirit  which  I  have  described.  Yet 

1  New  Travels  in  the  United  States  of  America,  performed  in  1788.  By  J.  P. 
Brissot  de  Warville  (Dublin,  1792),  270-81,  passim. 


232  READINGS  IN  ECONOMIC  HISTORY 

the  Western  parts  of  the  State  are  disposed  to  free  their  Negroes; 
but  the  Eastern  part  are  opposed  to  it.  ... 

[In  Pennsylvania  in  17803  the  General  Assembly  abolished  slavery 
for  ever,  forced  the  owners  of  slaves  to  cause  them  to  be  enregistered, 
declared  their  children  free  at  the  age  of  twenty-eight  years,  placed 
them,  while  under  that  age,  on  a  footing  of  hired  servants,  assured 
to  them  the  benefit  of  trial  by  jury,  &c.  .  .  . 

The  little  State  of  Delaware  has  followed  the  example  of  Penn- 
sylvania. It  is  mostly  peopled  by  Quakers  —  instances  of  giving 
freedom  are  therefore  numerous.  .  .  . 

With  the  State  of  Delaware  finishes  the  system  of  protection  to 
the  blacks.  Yet  there  are  some  negroes  freed  in  Maryland,  because 
there  are  some  Quakers  there;  and  you  perceive  it  very  readily,  on 
comparing  the  fields  of  tobacco  or  of  Indian  corn  belonging  to  these 
people  with  those  of  others;  you  see  how  much  superior  the  hand  of  a 
freeman  is  to  that  of  a  slave  in  the  operations  of  industry. 

When  you  run  over  Maryland  and  Virginia,  you  conceive  yourself 
in  a  different  world;  and  you  are  convinced  of  it  when  you  converse 
with  the  inhabitants.  They  speak  not  here  of  projects  for  freeing 
the  negroes;  they  praise  not  the  societies  of  London  and  America; 
they  read  not  the  works  of  Clarkson  —  No,  the  indolent  masters 
behold  with  uneasiness,  the  efforts  that  are  making  to  render  freedom 
universal.  The  Virginians  are  persuaded  of  the  impossibility  of  cul- 
tivating tobacco  without  slavery;  they  fear,  that  if  the  Blacks  be- 
come free,  they  will  cause  trouble;  on  rendering  them  free,  they 
know  not  what  rank  to  assign  them  in  society;  whether  they 
shall  establish  them  in  a  separate  district,  or  send  them  out  of  the 
country.  These  are  the  objections  which  you  will  hear  repeated 
every  where  against  the  idea  of  freeing  them. 

C.   Slavery  in  the  South,  17^5  * 

A  rather  favorable  view  of  slavery  is  given  by  Weld,  in  spite  of  his  dislike  of  the 
institution.  In  view  of  the  internal  slave  trade  which  sprang  up  shortly  after  this 
date  between  the  exhausted  tobacco  plantations  and  the  new  cotton  districts,  his 
statement  that  the  former  were  overstocked  with  slaves  is  significant. 

The  principal  planters  in  Virginia  have  nearly  everything  they 
can  want  on  their  own  estates.  Amongst  their  slaves  are  found 
taylors,  shoemakers,  carpenters,  smiths,  turners,  wheelwrights, 

1  Travels  through  the  States  of  North  America,  and  the  Provinces  of  Upper  and 
Lower  Canada,  during  the  Years  1795,  1796,  and  1797.  By  Isaac  Weld,  Junior 
(London,  1800),  114-6. 


AGRICULTURE,   SLAVERY  AND  INTERNAL  TRADE     233 

weavers,  tanners,  &c.  I  have  seen  patterns  of  excellent  coarse 
woollen  cloth  made  in  the  country  by  slaves,  and  a  variety  of  cotton 
manufactures,  amongst  the  rest  good  nankeen.  Cotton  grows  here 
extremely  well;  the  plants  are  often  killed  by  frost  in  winter, 
but  they  always  produce  abundantly  the  first  year  in  which  they  are 
sown.  The  cotton  from  which  nankeen  is  made  is  of  a  particular 
kind,  naturally  of  a  yellowish  colour. 

The  large  estates  are  managed  by  stewards  and  overseers,  the 
proprietors  just  amusing  themselves  with  seeing  what  is  going  forward. 
The  work  is  done  wholly  by  slaves,  whose  numbers  are  in  this  part  of 
the  country  more  than  double  that  of  white  persons.  The  slaves  on  the 
large  plantations  are  in  general  very  well  provided  for,  and  treated  with 
mildness.  During  three  months  nearly,  that  I  was  in  Virginia,  but 
two  or  three  instances  of  ill  treatment  towards  them  came  under  my 
observation.  Their  quarters,  the  name  whereby  their  habitations 
are  called,  are  usually  situated  one  or  two  hundred  yards  from  the 
dwelling  house,  which  gives  the  appearance  of  a  village  to  the  resi- 
dence of  every  planter  in  Virginia;  when  the  estate,  however,  is  so 
large  as  to  be  divided  into  several  farms,  then  separate  quarters 
are  attached  to  the  house  of  the  overseer  on  each  farm.  Adjoining 
their  little  habitations,  the  slaves  commonly  have  small  gardens  and 
yards  for  poultry,  which  are  all  their  own  property;  they  have  ample 
time  to  attend  to  their  own  concerns,  and  their  gardens  are  generally 
found  well  stocked,  and  their  flocks  of  poultry  numerous.  Besides 
the  food  they  raise  for  themselves,  they  are  allowed  liberal  rations 
of  salted  pork  and  Indian  corn.  Many  of  their  little  huts  are  com- 
fortably furnished,  and  they  are  themselves,  in  general,  extremely 
well  clothed.  In  short,  their  condition  is  by  no  means  so  wretched 
as  might  be  imagined.  They  are  forced  to  work  certain  hours  in 
the  day;  but  in  return  they  are  clothed,  dieted,  and  lodged  comfort- 
ably, and  saved  all  anxiety  about  provision  for  their  offspring.  .  .  . 

The  number  of  the  slaves  increases  most  rapidly,  so  that  there  is 
scarcely  any  estate  but  what  is  overstocked.  This  is  a  circumstance 
complained  of  by  every  planter,  as  the  maintenance  of  more  than  are 
requisite  for  the  culture  of  the  estate  is  attended  with  great  expence. 
Motives  of  humanity  deter  them  from  selling  the  poor  creatures, 
or  turning  them  adrift  from  the  spot  where  they  have  been  born  and 
brought  up,  in  the  midst  of  friends  and  relations. 

What  I  have  here  said  respecting  the  condition  and  treatment 
of  slaves,  appertains,  it  must  be  remembered,  to  those  only  who 
are  upon  the  large  plantations  in  Virginia;  the  lot  of  such  as  are 


234  READINGS  IN  ECONOMIC  HISTORY 

unfortunate  enough  to  fall  into  the  hands  of  the  lower  class  of  white 
people,  and  of  hard  taskmasters  in  the  towns,  is  very  different.  In 
the  Carolinas  and  Georgia  again,  slavery  presents  itself  in  very 
different  colours  from  what  it  does  even  in  its  worst  form  in  Virginia. 

IV.  PIONEERING  AND  AGRICULTURE  IN  THE  WEST 
A.   Land  the  Lodestone  to  the  West,  1772-1774  l 

The  westward  movement  began  after  the  Seven  Years'  War  had  removed  the 
fear  of  attack  from  the  French  and  Indians.  The  father  of  Joseph  Doddridge 
took  his  family  west  when  the  children  were  small,  so  that  the  author  of  the  book, 
from  which  this  extract  is  taken,  grew  up  in  the  pioneer  settlements  which  he 
describes.  The  Reverend  Joseph  Doddridge  was  an  itinerant  Methodist  preacher. 

The  Settlements  on  this  side  of  the  mountains  commenced  along 
the  Monongahela,  and  between  that  river  and  the  Laurel  Ridge,  in  the 
year  1772.  In  the  succeeding  year  they  reached  the  Ohio  river.  The 
greater  number  of  the  first  settlers  came  from  the  upper  parts  of  the 
then  colonies  of  Maryland,  and  Virginia.  Braddock's  trail,  as  it  was 
called,  was  the  rout  by  which  the  greater  number  of  them  crossed  the 
mountains.  A  less  number  of  them  came  by  the  way  of  Bedford 
and  Fort  Ligonier,  the  military  road  from  Pennsylvania  to  Pitts- 
burgh. They  effected  their  removals  on  horses  furnished  with  pack- 
saddles.  This  was  the  more  easily  done,  as  but  few  of  these  early 
adventurers  into  the  wilderness  were  encumbered  with  much  baggage. 

Land  was  the  object  which  invited  the  greater  number  of  these 
people  to  cross  the  mountain,  for  as  the  saying  then  was,  "It  was  to 
be  had  here  for  taking  up;"  that  is,  building  a  cabin  and  raising  a 
crop  of  grain,  however  small,  of  any  kind,  entitled  the  occupant  to 
four  hundred  acres  of  land,  and  a  preemption  right  to  one  thousand 
acres  more  adjoining,  to  be  secured  by  a  land  office  warrant.  This 
right  was  to  take  effect  if  there  happened  to  be  so  much  vacant  land 
or  any  part  thereof,  adjoining  the  tract  secured  by  the  settlement  right. 

B.  Pioneering  in  Kentucky,  1780-1790 z 

The  first  permanent  settlements  in  Kentucky  were  made  about  1780,  and  ten 
years  later  there  were  probably  a  hundred  thousand  persons  in  that  territory.  It 
was  a  favorite  destination  for  the  early  western  pioneers,  as  it  was  easily  reached 
by  the  Cumberland  Gap.  Imlay  emigrated  to  that  country  after  serving  as  a 
captain  in  the  Revolutionary  army,  and  there  became  a  deputy  surveyor. 

1  Notes,  on  the  Settlement  and  Indian  Wars,  of  the  Western  Parts  of  Virginia 
and  Pennsylvania.     By  Jos.  Doddridge  (Wellsburgh,  Va.,  1824),  99-100. 

2  A  Topographical  Description  of  tlte  Western  Territory  of  North  America.     By 
G.  Imlay  (New  York,  1793),  I,  133-6. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     235 

Under  such  circumstances,  the  first  settlement  of  Kentucky  was 
formed,  which  soon  opened  a  considerable  quantity  of  land  in  the 
county  of  Lincoln,  which  lies  in  the  upper  part  of  the  state,  and  con- 
tiguous to  the  wilderness,  which  ends  in  this  delectable  region. 

As  the  country  gained  strength,  the  stations  began  to  break  up 
in  that  part  of  the  country,  and  their  inhabitants  to  spread  them- 
selves, and  settle  upon  their  respective  estates.  But  the  embarass- 
ment  they  were  in  for  most  of  the  conveniences  of  life,  did  not  admit 
of  their  building  any  other  houses  but  of  logs,  and  of  opening  fields  in 
the  most  expeditious  way  for  planting  the  Indian  corn;  the  only 
grain  which  was  cultivated  at  that  time. 

A  log-house  is  very  soon  erected,  and  in  consequence  of  the  friendly 
disposition  which  exists  among  those  hospitable  people,  every  neigh- 
bour flew  to  the  assistance  of  each  other  upon  occasions  of  emergen- 
cies. Sometimes  they  were  built  of  round  logs  entirely,  covered  with 
rived  ash  shingles,  and  the  interstices  stopped  with  clay,  or  lime  and 
sand,  to  keep  out  the  weather.  The  next  object  was  to  open  the 
land  for  cultivation.  There  is  very  little  under-wood  in  any  part  of 
this  country,  so  that  by  cutting  up  the  cane,  and  girdling  the  trees,  you 
are  sure  of  a  crop  of  corn.  The  fertility  of  the  soil  amply  repays  the 
labourer  for  his  toil;  for  if  the  large  trees  are  not  very  numerous,  and 
a  large  proportion  of  them  the  sugar  maple,  it  is  very  likely  from  this 
imperfect  cultivation,  that  the  ground  will  yield  from  50  to  60  bushel 
of  corn  to  the  acre.  The  second  crop  will  be  more  ample ;  and  as  the 
shade  is  removed  by  cutting  the  timber  away,  great  part  of  our  land 
will  produce  from  seventy  to  one  hundred  bushels  of  corn  from  an 
acre.  This  extraordinary  fertility  enables  the  farmer  who  has  but 
a  small  capital  to  increase  his  wealth  in  a  most  rapid  manner  (I  mean 
by  wealth  the  comforts  of  life).  His  cattle  and  hogs  will  find  suffi- 
cient food  in  the  woods,  not  only  for  them  to  subsist  upon,  but  to 
fatten  them.  His  horses  want  no  provender  the  greatest  part  of  the 
year  except  cane  and  wild  clover;  but  he  may  afford  to  feed  them 
with  corn  the  second  year.  His  garden,  with  little  attention,  pro- 
duces him  all  the  culinary  roots  and  vegetables  necessary  for  his 
table;  and  the  prolific  increase  of  his  hogs  and  poultry,  will  furnish 
him  the  second  year,  without  fearing  to  injure  his  stock,  with  a  plenty 
of  animal  food;  and  in  three  or  four  years  his  stock  of  cattle  and 
sheep  will  prove  sufficient  to  supply  him  with  both  beef  and  mutton; 
and  he  may  continue  his  plan  at  the  same  time  of  increasing  his 
stock  of  those  useful  animals.  By  the  fourth  year,  provided  he  is 
industrious,  he  may  have  his  plantation  in  sufficient  good  order  to 


236  READINGS  IN  ECONOMIC  HISTORY 

build  a  better  house,  which  he  can  do  either  of  stone,  brick,  or 
a  framed  wooden  building,  the  principal  articles  of  which  will  cost 
him  little  more  than  the  labour  of  himself  and  domestics;  and  he  may 
readily  barter  or  sell  some  part  of  the  superfluous  productions  of  his 
farm,  which  it  will  by  this  time  afford,  and  procure  such  things  as  he 
may  stand  in  need  of  for  the  completion  of  his  building.  Apples, 
peaches,  pears,  &c.,  &c.,  he  ought  to  plant  when  he  finds  a  soil  or 
eligible  situation  to  place  them  in,  as  that  will  not  hinder,  or  in  any 
degree  divert,  him  from  the  object  of  his  aggrandizement. —  I  have 
taken  no  notice  of  the  game  he  might  kill,  as  it  is  more  a  sacrifice  of 
time  to  an  industrious  man  than  any  real  advantage. 

Such  has  been  the  progress  of  the  settlement  of  this  country  from 
dirty  stations  or  forts,  and  smoaky  huts,  that  it  has  expanded  into 
fertile  fields,  blushing  orchards,  pleasant  gardens,  luxuriant  sugar 
groves,  neat  and  commodious  houses,  rising  villages,  and  trading 
towns.  Ten  years  have  produced  a  difference  in  the  population  and 
comforts  of  this  country,  which  to  be  pourtrayed  in  just  colours  would 
appear  marvellous.  To  have  implicite  faith  or  belief  that  such  things 
have  happened,  it  is  first  necessary  to  be  (as  I  have  been)  a  spec- 
tator of  such  events. 

C.  Live  Stock  Farming  in  Ohio,  1806 l 

There  was  very  little  money  profit  in  farming  in  the  new  settlements  of  the  west, 
as  there  was  no  adequate  market  for  the  produce,  and  the  few  markets  that  there 
were,  like  New  Orleans,  were  easily  glutted.  Cattle,  moreover,  had  the  advantage 
that  they  could  be  driven  to  market.  The  first  cattle  that  were  so  marketed 
were  driven  from  Ohio  to  Baltimore  in  1805,  and  this  proved  the  beginning  of  a 
profitable  trade.  Ashe  was  an  unfriendly  and  severe  critic  of  the  western 
country  and  probably  exaggerated  the  statement  of  Mr.  Digby,  who  lived  near 
Cincinnati. 

I  learned  from  Mr.  Digby  (so  he  was  called)  that  the  best  he 
could  do  in  the  Western  country,  or  that  any  farmer  could  do,  was 
just  not  to  starve.  The  price  of  produce  was  so  low  and  that  of  labour 
so  high,  that  very  little  profit  attended  the  most  laborious  exertions  of 
industry.  Indian  corn,  in  particular,  carried  a  value  so  mean,  that 
he  never  offered  to  sell  it,  and  for  his  wheat,  he  made  it  into  flour, 
he  could  get  but  about  three  dollars  per  barrel,  and  even  that  had, 
for  the  most  part,  to  be  taken  in  goods  for  which  he  had  not  always 
consumption  or  use.  In  consequence  he  was  about  to  abandon  a 

1  Travels  in  America,  performed  in  1806.  By  Thomas  Ashe  (London,  1808), 
220-1. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     237 

system  so  little  advantageous,  and  take  to  grazing  cattle,  breeding 
hogs,  and  rearing  horses,  for  distant  markets  and  foreign  use,  where 
money  was  to  be  obtained,  and  profit  equal  to  the  extent  and  impor- 
tance of  the  business.  He  had  always  reaped  the  benefit  of  this  plan, 
having  sent  his  son  in  the  spring  of  the  year  with  a  boat  carrying  two 
hundred  live  hogs  to  New  Orleans,  where  they  sold  all  round  at  the 
rate  of  twelve  dollars  per  cwt.  though  they  cost  him  nothing  but  the 
expense  of  the  voyage  and  some  small  attendance  in  the  woods,  where 
they  breed  and  maintain  themselves  all  the  year  round. 

V.   PUBLIC  LANDS 

A.   Democratic  Land  Holding,  1795  1 

One  of  the  striking  effects  of  the  westward  movement  was  the  growth  of 
democracy,  both  political  and  economic.  In  the  West  there  was  essential  equality 
of  fortunes  and  of  education.  This  was  a  direct  result  of  the  equality  of  oppor- 
tunity offered  to  every  settler  by  the  cheap  and  almost  free  lands,  which  were 
divided  for  the  most  part  into  small  holdings. 

The  cultivated  lands  in  this  country  [Shenandoah  Valley  J  are 
mostly  parcelled  out  in  small  portions;  there  are  no  persons  here,  as 
on  the  other  side  of  the  mountains,  possessing  large  farms;  nor  are 
there  any  eminently  distinguished  by  their  education  or  knowledge 
from  the  rest  of  their  fellow  citizens.  Poverty  also  is  as  much  un- 
known in  this  country  as  great  wealth.  Each  man  owns  the  house 
he  lives  in  and  the  land  which  he  cultivates,  and  everyone 
appears  to  be  in  a  happy  state  of  mediocrity,  and  unambitious  of 
a  more  elevated  situation  than  what  he  himself  enjoys. 

B.   Speculation  in  Public  Lands,  1806  z 

In  1800  Congress  adopted  the  credit  system  of  selling  land  at  the  fixed  price  of 
$2  an  acre.  Under  this  law  only  one-fourth  of  the  purchase  money  had  to  be  paid 
down,  the  balance  being  paid  in  three  annual  installments.  This  led  to  consider- 
able speculation  and  the  purchase  by  venturesome  individuals  of  larger  amounts 
of  land  than  they  could  pay  for.  But,  as  Ashe  points  out,  the  factors  were  so  numer- 
ous which  favored  the  rise  in  the  value  of  land  that  speculation  of  this  character 
was  very  tempting. 

By  virtue  of  the  treaty  with  the  aboriginal  confederacy  and  sub- 
sequent purchases,  Congress  has  become  the  proprietor  of  nearly 

1  Travels  through  the  States  of  North  America,  and  the  Provinces  of  Upper  and 
Lou'er  Canada,  during  the  Years  1795,  1796,  and  1797.     By  Isaac  Weld,  Junior 
(4th  edition,  London,  1800),  170. 

2  Travels  in  America,  performed  in  1806.     By  Thomas  Ashe  (London,  1808), 
89-90. 


238  READINGS  IN  ECONOMIC  HISTORY 

all  the  fine  lands  in  the  state  [Ohio].  I  have  mentioned  where  such 
lands  most  abound,  and  should  have  stated  that  nearly  one  third 
of  the  country  is  mountainous  and  ridgy,  bog  and  morass,  to  such  a 
degree  as  not  to  be  worth  one  cent  per  acre.  The  principal  part  of  the 
state  of  this  character  lies  to  the  north-east,  and  east  of  the  river 
Scioto.  The  best  land  is  to  the  west  of  that  river,  and  continues 
with  few  exceptions  to  the  boundary  westward  of  the  Great  Miami. 
It  is  very  necessary  that  purchasers  at  a  distance  should  be  aware 
of  this,  as  I  have  known  several  who  bought  in  a  distant  market  at 
a  good  price  come  several  thousand  miles  to  take  possession  of  a 
sterile  mountain  or  an  unreclaimable  swamp.  The  truth  is,  that  no 
person  should  buy  who  is  not  on  the  spot,  or  who  has  not  a  confidential 
agent.  The  mode  of  sale  adopted  by  Congress  is  highly  commend- 
able. The  entire  country  is  surveyed  and  divided  into  sections  of 
six  hundred  and  forty  acres  each.  A  certain  number  of  these  sections 
lying  contiguous  compose  a  township,  and  a  certain  number  of  town- 
ships form  a  range.  The  sections  are  all  numbered,  and  each  number 
sixteen  in  every  township  is  reserved  for  the  purpose  of  education 
and  the  support  of  its  professors.  There  are  also  reservations  which 
cannot  be  sold  under  eight  dollars  an  acre;  but  every  other  acre  of 
Congress  land  is  sold  at  two  dollars  an  acre  forever:  and,  to  encour- 
age settlers,  the  period  of  four  years  is  allowed  for  the  entire  payment, 
which  commences  one-fourth  at  the  bargain,  and  the  remainder  at 
three  yearly  instalments.  This  indulgence  on  the  part  of  govern- 
ment was  most  productive  to  a  few  sordid  monopolizers,  called  land 
jobbers  or  land  speculators,  who  made  large  contracts  for  twenty 
thousand  to  five  hundred  thousand  acres  of  the  best  land  and  in  the 
best  situations,  and  have  already  sold  the  greatest  part  at  from  three 
to  five  dollars  per  acre.  A  meadow  called  the  Rick-a-way  plains, 
containing  ten  thousand  acres  free  of  wood,  is  advanced  by  one  of 
these  gentlemen,  from  the  two  dollars  an  acre  to  be  paid  by  his  con- 
tract, to  thirty  dollars  per  acre,  and  a  considerable  part  of  it  is  already 
sold.  The  portion  under  cultivation  has  yielded  one  hundred  and 
ten  bushels  of  corn,  and  fifty  bushels  wheat  per  acre.  The  land  the 
most  sought  after  is  on  the  Scioto,  the  Ohio,  and  the  Miamis:  on 
which  situations  the  title  of  Congress  is  for  the  most  part  bought  up, 
and  the  present  owners  demand  for  it  from  six  to  twelve  dollars  per 
acre.  But  if  the  land  should  be  on  a  mill  seat,  or  place  eligible  for 
the  site  of  a  village  or  town,  the  price  might  profitably  be  raised  to 
one  hundred  dollars  per  acre. 

Many  local  circumstances  sometimes  also  unite  to  raise  the  price 


AGRICULTURE,    SLAVERY  AND   INTERNAL  TRADE      239 

of  certain  lands.  Such  as  their  vicinity  to  improving  towns;  their 
abundance  of  ship  timber,  the  facility  of  conveying  it  to  builders' 
yards,  and  their  possession  of  the  sugar-maple,  cherry  tree,  sassafras, 
cotton,  and  other  plants.  On  the  whole,  I  know  of  no  speculation 
so  promising,  as  that  of  buying  the  remaining  good  lands,  reserva- 
tions, and  all  (except  schools,  reservations  which  are  never  to  be  sold) 
from  Congress  at  two  dollars  per  acre,  and  of  holding  them  for  the 
space  of  ten  years;  after  that  period  no  moderate  land  will  be  sold 
under  ten  dollars  per  acre,  and  land  of  the  first  qualities  and  situation 
will  fetch  fifty  in  general,  and  much  more  in  particular,  per  acre. 
The  reasons  for  this  are  obvious;  the  lands  of  the  Atlantic  States  are 
not  to  be  compared  to  these  in  point  of  fertility  and  every  excellence; 
the  climate  here  is  not  worse,  and  the  State  tolerates  no  slavery. 

C.   Sale  of  Public  Lands,  1796-1816  1 

The  sales  of  the  public  lands  of  the  United  States  are  given  in  the  following 
table  for  the  period  1796  to  1806. 

SALES    OF    PUBLIC    LANDS 

Since  the  opening  of  the  several  land  offices  for  the  sale  of  lands 
belonging  to  the  United  States,  the  following  sums  have  been  received 
into  the  Treasury,  each  year  from  the  proceeds  of  the  sales  of  public 
lands,  viz. :  — 

Dolls.  Cts.  Dolls.    Cts. 

In  1796 4,836  13    In  1807 466,163  27 

1797 83,540  60      1808 ...        ...  647,939   6 

1798 11,963  IX      l8°9 442,252  33 

1799 ; l8lO 696,548      82 

1800 443  75  1811...                      ..1,040,237  53 

1801 167,726  6  1812 710,427  78 

1802 188,628  2  1813 835,655  14 

1803 165,675  69  1814 1,135,971  9 

1804 487,526  79  1815...              1,287,959  28 

1805 540,193  80  1816   estimated   at.  .  1,500,000  oo 

1806 765,245  73 

The  whole  number  of  acres  sold  at  the  different  land  offices, 
north-west  of  the  river  Ohio,  from  the  commencement  of  the  sales, 
to  October  ist,  1816,  was  seven  millions  fifty-four  thousand  six  hun- 
dred and  eighty-nine;  the  whole  purchase  money,  was  $14,960,784.48, 
and  the  balance  due,  at  the  latter  period,  was  $4,511,202.85.  .  .  . 

1  A  Statistical  View  of  the  Commerce  of  the  United  States  of  America.  By  Timothy 
Pitkin  (2d  edition,  New  York,  1817),  375. 


240  READINGS  IN  ECONOMIC  HISTORY 

VI.'  INTERNAL  TRADE  AND  TRANSPORTATION 
A.   By  Stage  from  Boston  to  Savannah,  1802  l 

Travel  and  trade  were  for  the  most  part  confined  to  the  natural  waterways, 
with  which  the  United  States  was  so  well  supplied.  Indeed  the  very  excellence 
of  these  routes  retarded  the  building  of  roads  in  the  eastern  states.  When  land 
travel  was  necessary  it  was  usually  made  on  horseback.  Owing  to  the  badness 
of  the  roads  travel  by  stage  did  not  become  important  until  the  beginning  of  the 
nineteenth  century.  By  1802,  however,  roads  had  been  built  along  the  whole 
Atlantic  coast,  and  a  little  later  stages  were  running  from  Philadelphia  to  Pitts- 
burgh, a  distance  of  over  three  hundred  miles.  Michaux  was  sent  to  this  country 
by  the  French  government  to  study  the  forests  of  America,  but  did  not  confine 
his  observations  to  that  subject. 

Till  the  year  1802,  the  stages  that  set  out  at  Philadelphia  did  not 
go  farther  South  than  to  Petersburg  in  Virginia,  which  is  about  three 
hundred  miles  from  Philadelphia;  but  in  the  month  of  March  of 
that  year  a  new  line  of  correspondence  was  formed  between  the 
latter  city  and  Charleston.  The  journey  is  about  a  fortnight,  the 
distance  fifteen  hundred  miles,  and  the  fare  fifty  piastres  [dollars]. 
There  are  stages  also  between  Philadelphia,  New  York,  and  Boston, 
as  well  as  between  Charleston  and  Savannah,  in  Georgia,  so  that  from 
Boston  to  Savannah,  a  distance  of  twelve  hundred  miles,  persons 
may  travel  by  the  stages. 

B.    Traveling  by  Wagon,  1806  2 

If  one  could  not  make  use  of  the  fairly  comfortable  stage,  then  traveling  took 
on  new  terrors.  The  elliptical  spring  over  the  axles  of  wagons  was  not  introduced 
until  1825. 

.  .  .  The  roads  being  bad  at  this  season  of  the  year,  we  could 
not  procure  the  stage  which  otherwise  runs  upon  this  road.  The 
waggon  we  hired  is  common  in  the  States,  and  is  used  by  the  country 
people  to  carry  their  provisions  to  market,  or  to  transport  goods  from 
one  part  of  the  country  to  the  other.  A  great  number  are  constantly 
employed  on  the  road  between  Skenesborough  and  Troy  [N.  Y.  j. 
It  is  a  long  narrow  cart  upon  four  wrheels,  and  drawn  by  two  horses 
abreast.  When  used  as  a  stage  for  travelling,  a  couple  of  chairs  are 
placed  in  it:  but  it  is  a  very  rough  method  of  riding;  for  the  waggon 

1  Travels  to  the   Westward  of  the  Allegany  Mountains.     By  F.   A.   Michaux 
(London,  1805),  25n. 

2  Travels  through  Canada,  and  the  United  States  of  North  America,  in  the  Years 
1806,  1807,  6*  1808.     By  John  Lambert  (2d  edition,  London,  1814),  II,  26-7. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     241 

has  no  springs,  and  a  traveller  ought  to  have  excellent  nerves  to  endure 
the  shaking  and  jolting  of  such  a  vehicle  over  bad  roads. 

C.   Bad  Roads  in  1810  l 

Practically  the  only  good  roads  in  the  United  States  in  1810  were  the  turn- 
pikes, built  and  maintained  by  private  companies  and  on  which  tolls  were  charged. 
As  soon  as  the  traveler  left  these  improved  thoroughfares,  the  roads  became 
execrable.  The  account  given  in  the  sprightly  journal  of  Miss  Dwight  is  prob- 
ably not  exaggerated. 

Mansfield  —  N  J  —  Sat  —  morn  October  27  [1810]  — 
We  yesterday  travell'd  the  worst  road  you  can  imagine  —  over 
mountains  &  thro'  vallies  —  We  have  not  I  believe,  had  20  rods  of 
level  ground  the  whole  day  —  and  the  road  some  part  of  it  so  intol- 
erably bad  on  every  account,  so  rocky  &  so  gullied,  as  to  be  almost 
impassable  —  15  miles  this  side  of  Morristown,  we  cross'd  a  mountain 
call'd  Schyler  or  something  like  it  - 

.  .  .  After  we  left  Mansfield,  we  cross'd  the  longest  hills,  and 
the  worst  road,  I  ever  saw  —  two  or  three  times  after  riding  a  little 
distance  on  turnpike,  we  found  it  fenced  across  &  were  oblig'd  to  turn 
into  a  wood  where  it  was  almost  impossible  to  proceed  —  large  trees 
were  across,  not  the  road  for  there  was  none,  but  the  only  place  we 
could  possibly  ride  —  It  appear 'd  to  me,  we  had  come  to  an  end  of 
the  habitable  part  of  the  globe  —  but  all  these  difficulties  were  at 
last  surmounted,  &  we  reach 'd  the  Delaware  —  The  river  where  it 
is  cross'd,  is  much  smaller  than  I  suppos'd  —  The  bridge  over  it  is 
elegant  I  think  — It  is  covered  &  has  16  windows  each  side — As 
soon  as  we  pass'd  the  bridge,  we  enter'd  Easton,  the  first  town  in 
Pennsylvania  —  It  is  a  small  but  pleasant  town  —  the  houses  are 
chiefly  small,  &  built  of  stone  —  very  near  together  —  The  meeting 
house,  Bank,  &  I  think,  market,  are  all  of  the  same  description  — 
There  are  a  few  very  handsome  brick  houses,  &  some  \vooden  build- 
ings —  From  Easton,  we  came  to  Bethlehem,  which  is  12  miles  dis- 
tant from  it  — .  .  . 

D.    Traveling  from  the  East  to  Kentucky,  1793 * 

The  routes  to  the  west  lay  through  the  mountains,  and  of  these  that  through 
the  Cumberland  Gap  was  the  one  earliest  and  most  generally  used.     The  easier 

1  A  Journey  [from  Connecticut]  to  Ohio  in  1810  as  recorded  in  the  Journal  of 
Margaret  Van  Horn  Dunght  (New  Haven,  1912),  13,  18.     Printed  by  permission 
of  the  editor,  M.  Farrand,  and  the  publisher,  Yale  University  Press. 

2  A  Topographical  Description  of  the  Western  Territory  of  North  America.     By 
G.  Imlay  (New  York,  1793),  I,  140-5. 


242  READINGS  IN  ECONOMIC  HISTORY 

approaches,  now  followed  to  the  north  by  the  Erie  Canal  or  to  the  south  around  the 
end  of  the  Appalachian  mountain  chain,  were  in  each  case  blocked  by  Indian  tribes. 
It  was  a  difficult  and  even  a  dangerous  journey,  but  once  the  rivers  on  the  other 
side  of  the  mountains  were  reached,  it  became  much  easier.  Imlay  was  a  resident 
of  Kentucky  and  had  himself  made  the  journey  more  than  once. 

Travellers  or  emigrants  take  different  methods  of  transporting 
their  baggage,  goods,  or  furniture  from  the  places  they  may  be  at 
to  the  Ohio,  according  to  circumstances  or  their  object  in  coming  to 
the  country.  For,  instance,  if  a  man  is  travelling  only  for  curiosity, 
or  has  no  family  or  goods  to  remove,  his  best  way  would  be  to  pur- 
chase horses,  and  take  his  route  through  the  Wilderness;  but  provided 
he  has  a  family,  or  goods  of  any  sort  to  remove,  his  best  way,  then, 
would  be  to  purchase  a  waggon  and  team  of  horses  to  carry  his 
property  to  Redstone  Old  Fort,  or  to  Pittsburg,  according  as  he 
may  come  from  the  northern  or  southern  States.  A  good  waggon 
will  cost  at  Philadelphia  about  10 1.  (I  shall  reckon  everything  in 
sterling  money  for  your  greater  convenience)  and  the  horses  about 
12  1.  each;  they  would  cost  something  more  at  Baltimore  and  Alex- 
andria. The  waggon  may  be  covered  with  canvas,  and  if  it  is  the 
choice  of  the  people,  they  may  sleep  in  it  at  nights  with  the  greatest 
safety.  But  if  they  should  dislike  that,  there  are  inns  of  accommo- 
dation the  wrhole  distance  on  the  different  roads.  To  allow  the  horses 
a  plenty  of  hay  and  corn  would  cost  about  i  s.  per  dfem,  each  horse; 
supposing  you  purchase  your  forage  in  the  most  ceconimical  manner, 
i.  e.  of  the  farmers,  as  you  pass  along,  from  time  to  time  as  you  may 
want  it,  and  carry  it  in  your  waggon;  and  not  of  innkeepers,  who 
must  have  their  profits.  The  provisions  for  the  family  I  would  pur- 
chase in  the  same  manner;  and  by  having  two  or  three  camp  kettles, 
and  stopping  every  evening  when  the  weather  is  fine  upon  the  brink 
of  some  rivulet,  and  by  kindling  a  fire  they  may  soon  dress  their 
food.  There  is  no  impediment  to  these  kind  of  things,  it  is  common 
and  may  be  done  with  the  greatest  security;  and  I  would  recommend 
all  persons  who  wish  to  avoid  expence  as  much  as  possible  to  adopt 
this  plan.  True,  the  charges  at  inns  on  those  roads  are  remark- 
ably reasonable,  but  I  have  mentioned  those  particulars  as  there 
are  many  unfortunate  people  in  the  world,  to  whom  the  saving  of  every 
shilling  is  an  object,  and  as  this  manner  of  journeying  is  so  far  from 
being  disagreeable,  that  in  a  fine  season  it  is  extremely  pleasant. 

Provisions  in  those  countries  are  very  cheap,  beef,  mutton,  and 
pork,  are  something  less  than  2  d.  per  lb.;  dunghill  fowls  are  from  4  d. 
to  6  d.  each ;  duck,  8  d. ;  geese  and  turkeys,  is.  3d.;  butter,  5  d. ; 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     243 

cheese,  I  will  say  nothing  about,  as  there  is  very  little  good  until  you 
arrive  in  Kentucky.  Flour  is  about  12  s.  6  d.  p?r  cwt. 

The  best  way  is  to  carry  their  tea  and  coffee  from  the  place  they 
may  set  out  at;  good  green  tea  will  be  from  45.  6  d.  to  6  s.  per  lb.; 
souchong  from  3  s.  to  5  s. ;  coffee  will  cost  from  i  s.  3  d.  to  i  s.  6  d.  per 
lb.;  loaf  sugar  from  7  d.  to  lod.  But  I  would  not  recommend  their 
carrying  much  sugar,  for  as  the  back  country  is  approached,  the  maple 
sugar  is  in  abundance,  and  may  be  bought  from  4  d.  to  6  d.  per  lb. 
Such  are  the  expenses  to  be  incurred  travelling  to  this  country  by 
Redstone  and  Pittsburg. 

The  distance  which  one  of  those  waggons  may  travel  one  day 
with  another  is  little  short  of  twenty  miles.  So  that  it  will  be  a 
journey  from  Alexandria  to  Redstone  Old  Fort  of  eleven  or  twelve 
days,  from  Baltimore  a  day  or  two  longer,  and  from  Philadelphia 
to  Pittsburg  I  should  suppose  it  would  require  nearly  twenty  days; 
as  the  roads  are  not  so  good  as  from  the  two  former  places. 

From  these  prices  the  expence  of  moving  a  family,  from  either 
of  the  sea  ports  I  have  mentioned  to  the  Ohio,  may  be  computed  with 
tolerable  exactitude. 

The  best  time  for  setting  out  for  this  country  from  any  of  the 
Atlantic  ports,  is  the  latter  end  of  either  September  or  April.  The 
autumn  is  the  most  eligible  of  the  two;  as  it  is  most  likely  that  the 
roads  across  the  mountains  will  be  drier,  and  provisions  and  forage 
are  then  both  more  plentiful  and  cheap  than  in  the  spring. 

If.  this  mode  should  not  suit  the  convenience  of  the  party,  by  reason 
of  their  not  wanting  a  waggon  or  horses  when  they  arrive  in  this 
country,  they  may  have  their  goods  brought  out  to  Redstone  Old 
Fort  from  Alexandria  for  15  s.  per  cwt.  and  in  like  proportion  from 
Baltimore  and  Philadelphia. 

At  Redstone  Old  Fort,  or  Pittsburg,  they  can  either  buy  a  boat, 
which  will  cost  them  about  5  s.  per  ton,  or  freight  their  goods  to 
Kentucky  for  about  i  s.  per  cwt.  There  is  no  regular  business  of 
this  sort;  but  as  there  are  always  boats  coming  down  the  river,  i  s. 
per  cwt.  is  the  common  charge  for  freight.  But  more  frequently 
when  there  is  boat  room  to  spare,  it  is  given  to  such  as  are  not  able 
to  purchase  a  boat,  or  have  not  a  knowledge  of  the  navigation.  How- 
ever, that  is  a  business  wThich  requires  no  skill,  and  there  are  always 
numbers  of  people  coming  down,  who  will  readily  conduct  a  boat 
for  the  sake  of  a  passage. 

The  distance  from  Philadelphia  by  land  to  Kentucky  is  between 
seven  and  eight  hundred  miles;  from  Baltimore  nearly  seven  hundred; 


244  READINGS  IN  ECONOMIC  HISTORY 

nearly  six  hundred  from  Alexandria;    and  upwards  of  five  hundred 
from  Richmond. 

E.   Trade  down  the  Mississippi  River,  1795  1 

As  the  population  grew  in  the  western  country  they  began  to  produce  a  surplus 
which  they  sent  to  market  in  exchange  for  the  manufactured  commodities  of  the 
East  or  of  Europe.  The  bulky  and  heavy  agricultural  products  or  raw  materials 
of  the  western  settlements  were  usually  sent  downstream  to  the  New  Orleans 
market,  while  they  drew  their  supplies  overland  from  the  seaboard  cities. 

The  people  in  Pittsburgh,  and  the  western  country  along  the 
waters  of  the  Ohio,  draw  their  supplies  from  Philadelphia  and  Balti- 
more; but  they  send  the  productions  of  the  country,  which  would 
be  too  bulky  for  land  carriage,  down  the  Ohio  and  Mississippi  to 
New  Orleans.  From  Pittsburgh  to  New  Orleans,  the  distance  is 
two  thousand,  one  hundred  and  eighty-three  miles.  On  an  average 
it  takes  about  twenty-eight  days  to  go  down  there  with  the  stream; 
but  to  return  by  water  it  takes  from  sixty  days  to  three  months. 
The  passage  back  is  very  laborious  as  well  as  tedious;  on  which 
account  they  seldom  think  of  bringing  back  boats  which  are  sent 
down  from  Pittsburgh,  but  on  arriving  at  New  Orleans  they  are 
broken  up,  and  the  plank  sold.  These  boats  are  built  on  the  cheapest 
construction,  and  expressly  for  the  purpose  of  going  down  stream. 
The  men  get  back  the  best  way  they  can,  generally  in  ships  bound 
from  New  Orleans  to  the  southern  states,  and  from  thence  home  by 
land.  Now,  if  the  passage  from  the  Ohio  to  the  Patowmac  is  opened, 
it  cannot  be  supposed  that  the  people  in  Pittsburgh  and  the  vicinity 
will  continue  thus  to  send  the  produce  down  to  Orleans,  from  whence 
they  cannot  bring  anything  in  return;  they  will  naturally  send  to 
the  federal  city,  from  whence  they  can  draw  the  supplies  they  are  in 
want  of,  and  which  is  so  much  nearer  to  them,  that  when  the  naviga- 
tion is  perfected  it  will  be  possible  to  go  there  and  back  again  in  the 
same  time  that  it  requires  merely  to  go  down  to  New  Orleans. 

F.    Trade  along  the  Western  Rivers,  1802  z 

A  clear  and  graphic  picture  of  western  trade  at  the  beginning  of  the  nineteenth 
century  is  given  us  by  Michaux,  with  his  accustomed  accuracy  and  attention  to 
details.  The  reasons  for  the  importance  of  Pittsburg  and  of  New  Orleans  become 
very  evident  from  a  study  of  western  trade. 

1  Travels  through  the  States  of  North  America,  and  the  Provinces  of  Upper  and 
Lower  Canada,  during  the  Years  1795,  1796,  and  1797.  By  Isaac  Weld,  Junior 
(4th  edition,  London,  1800),  66-7. 

*  Travels  to  the  Westward  of  the  Allegany  Mountains.  By  F.  A.  Michaux 
(London,  1805),  60-1,  90. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     245 

Pittsburgh  has  been  long  considered  by  the  Americans  as  the  key 
to  the  western  country.  .  .  . 

However,  though  this  town  has  lost  its  importance  as  a  military 
post  it  has  acquired  a  still  greater  one  in  respect  to  commerce.  It 
serves  as  a  staple  for  the  different  sorts  of  merchandise  that  Phila- 
delphia and  Baltimore  send,  in  the  beginning  of  spring  and  autumn, 
for  supplying  the  states  of  Ohio,  Kentucky,  and  the  settlement  of 
Natches. 

The  conveyance  of  merchandise  from  Philadelphia  to  Pittsburgh 
is  made  in  large  covered  waggons,  drawn  by  four  horses,  two  a-breast. 
The  price  of  carrying  goods  varies  according  to  the  season;  but  in 
general  it  does  not  exceed  six  piasters  [dollars]]  the  quintal.  They 
reckon  it  to  be  three  hundred  miles  from  Philadelphia  to  Pittsburgh, 
and  the  carriers  generally  make  it  a  journey  of  from  twenty  to  twenty- 
four  days.  The  price  of  conveyance  would  not  be  so  high  as  it  really 
is,  were  it  not  that  the  waggons  frequently  return  empty;  notwith- 
standing they  sometimes  bring  back,  on  their  return  to  Philadelphia 
or  Baltimore,  fur  skins  that  come  from  Illinois  or  Ginseng,  which  is 
very  common  in  that  part  of  Pennsylvania. 

Pittsburgh  is  not  only  the  staple  of  Philadelphia  and  Baltimore 
trade  with  the  western  country,  but  of  the  numerous  settlements  that 
are  formed  on  the  Monongahela  and  Alleghany.  The  territorial 
produce  of  that  part  of  the  country  finds  an  easy  and  advantageous 
conveyance  by  the  Ohio  and  Mississippi.  Corn,  hams  and  dried 
pork  are  the  principal  articles  sent  to  New  Orleans,  whence  they  are 
re-exported  into  the  Carribbees.  They  also  export  for  the  consump- 
tion of  Louisiana,  bar-iron,  coarse  linen,  bottles  manufactured  at 
Pittsburgh,  whiskey,  and  salt  butter.  A  great  part  of  these  provi- 
sions come  from  Redstone,  a  small  commercial  town,  situated  upon 
the  Monongahela,  about  fifty  miles  beyond  Pittsburgh.  .  .  . 

The  inhabitants  of  Marietta  were  the  first  that  had  an  idea  of 
exporting  directly  to  the  Carribbee  Islands  the  produce  of  the  country, 
in  a  vessel  built  in.  their  own  town,  which  they  sent  to  Jamaica.  The 
success  which  crowned  this  first  attempt  excited  such  emulation  among 
the  inhabitants  of  that  part  of  the  Western  Country,  that  several 
new  vessels  were  launched  at  Pittsburgh  and  Louisville,  and  expe- 
dited to  the  isles,  or  to  New  York  and  Philadelphia.  The  shipyard 
at  Marietta  is  situated  near  the  town,  on  the  Great  Muskingum. 
When  I  was  there  they  were  building  three  brigs,  one  of  which  was 
of  two  hundred  and  twenty  tons  burthen. 


246  READINGS  IN  ECONOMIC  HISTORY 

G.   Trade  at  Pittsburg,  1803  l 

Baltimore  and  Philadelphia  were  the  great  markets  from  which  supplies  were 
sent  west;  Pittsburg  owed  its  importance  to  the  fact  that  it  was  situated  at  the  head 
of  navigation  on  the  Ohio  River  and  hence  was  the  distributing  center  for  the  whole 
western  region.  New  Orleans,  at  the  mouth  of  the  Mississippi  River,  was  the  natu- 
ral receiving  station  for  produce  that  was  sent  downstream.  Harris  was  a  resident 
of  Massachusetts  who  made  a  journey  to  the  west  for  the  sake  of  regaining  his 
health. 

Dry  goods  in  general  are  sold  nearly  as  cheap  as  at  Baltimore; 
other  goods,  are,  on  account  of  the  carriage,  which  is  four  dollars 
fifty  cents  from  Baltimore  and  five  dollars  pr.  100  Ibs.  from  Phila- 
delphia proportionably  higher.  The  merchants  here,  as  well  as  those 
of  the  western  country,  receive  their  goods  from  Philadelphia  and 
Baltimore;  but  a  small  part  of  the  trade  being  given  to  New- York 
and  Alexandria.  The  terms  of  credit  are  generally  from  nine  to  twelve 
months.  The  produce  which  they  receive  of  the  farmers  is  sent  to 
New  Orleans;  the  proceeds  of  which  are  remitted  to  the  Atlantic 
States,  to  meet  their  payments. 

Most  of  the  articles  of  merchandize  brought  in  waggons  over  the 
mountains  in  the  summer  season,  and  destined  for  trade  down  the 
river,  are  stored  at  this  place  to  be  ready  for  embarkation.  With 
these  a  great  many  trading  boats  are  laden,  which  float  down  the 
river,  stopping  at  the  towns  on  its  banks  to  vend  the  articles.  In  a 
country,  so  remote  from  commerce,  and  of  so  great  extent,  where  each 
one  resides  on  his  o\vn  farm,  and  has  neither  opportunity  nor  conve- 
nience for  visiting  a  market,  these  trading  boats  contribute  very  much 
to  the  accommodation  of  life,  by  bringing  to  every  man's  house  those 
little  necessaries  which  it  would  be  very  troublesome  to  go  a  great 
distance  to  procure. 

H.  Character  of  Western  Trade,  1806  * 

Ashe  gives  an  amusing  though  probably  not  altogether  reliable  account  of  the 
trade  that  was  carried  on  throughout  the  newer  sections  of  the  country.  The 
absence  of  money,  and  the  resort  to  barter  in  carrying  on  trade,  were  characteristic 
of  the  western  as  they  had  been  of  colonial  trade.  The  money  was  sent  back 
East  to  buy  more  needed  goods,  and  never  could  be  kept  in  the  West. 

1  The  Journal  of  a  Tour  into  the  Territory  Northwest  of  the  Allegany  Mountains; 
Made  in  the  Spring  of  the  Year  1803.     By  Thaddeus  Mason  Harris  (Boston,  1805), 

42-43- 

2  Travels  in  America,  performed  in  1806.     By  Thomas  Ashe  (London,  1808), 

51-3- 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     247 

I  do  not  conceive  that  I  assert  too  much,  though  it  may  be  sur- 
prising to  you,  in  saying,  that  the  entire  business  of  these  waters  is 
conducted  without  the  use  of  money.  I  have  already  enumerated 
the  produce;  consisting  chiefly  of  flour,  corn,  salt,  cyder,  apples,  live 
hogs,  bacon,  glass,  earthenware,  &c.  I  have  also  mentioned  the 
little  towns  and  settlements  along  them.  To  such  places  persons 
come  from  Baltimore  and  Philadelphia  with  British  goods,  which 
they  exchange  for  the  above  productions;  charging  on  their  articles 
at  least  300  per  cent,  and  allowing  the  farmer  and  manufacturer  but 
very  low  terms  for  theirs.  Some  of  these  prices  are  as  follows: 
whiskey,  two  shillings  a  gallon;  live  hogs,  two  dollars  and  a  half  a 
hundredweight;  bacon,  three  dollars  a  hundredweight;  flour,  three 
dollars  a  barrel;  corn,  a  quarter-dollar  a  bushel;  butter  an  eighth 
of  a  dollar  a  pound;  cyder,  four  dollars  a  barrel;  native  sugar,  a 
sixteenth  of  a  dollar  a  pound;  and  so  on  in  proportion,  for  any  other 
produce  of  the  country.  The  storekeepers  make  two  annual  collec- 
tions of  these  commodities;  send  them  down  the  rivers  to  New 
Orleans;  and  there  receive  an  immense  profit  in  Spanish  dollars,  or 
bills  on  Philadelphia  at  a  short  date.  They  then  purchase  British 
and  West  India  goods  of  all  kinds;  send  them  by  waggcns  over  the 
mountains,  to  their  stores  in  the  western  country,  where  they  always 
keep  clerks;  and  again  make  their  distributions  and -collections; 
descend  the  waters;  and  return  by  the  same  circuitous  mountainous 
route,  of  at  least  5650  miles,  as  nearly  as  can  be  calculated  on  an 
average  between  the  extreme  head  of  the  waters  and  Pittsburg,  thus: 

Miles 

From  each  station  to  New  Orleans 2300 

From  New  Orleans  to  Philadelphia,  by  sea 3000 

From  Philadelphia  back  to  each  station,  by  the  way  of  the 

AUeghany  mountains 350 

Total 5650 

A  few,  on  receiving  their  cash  at  New  Orleans,  return  by  land  through 
the  wilderness,  Tennasee,  and  Kentucky,  to  their  stations  at  and 
above  Pittsburg;  but  this  is  seldom  done.  The  distance  which  is 
thus  performed  is  only  1300  miles. 

These  storekeepers  are  obliged  to  keep  every  article  which  it  is 
possible  that  the  farmer  and  manufacturer  may  want.  Each  of  their 
shops  exhibits  a  complete  medley;  a  magazine  where  are  to  be  had 
both  a  needle  and  an  anchor,  a  tin  pot  and  a  large  copper  boiler,  a 
child's  whistle  and  a  pianoforte,  a  ring  dial  and  a  clock,  a  skein  of 
thread  and  trimmings  of  lace,  a  check  frock  and  a  muslin  gown,  a 


248  READINGS  IN  ECONOMIC  HISTORY 

frieze  coat  and  a  superfine  cloth,  a  glass  of  whiskey  and  a  barrel  of 
brandy,  a  gill  of  vinegar  and  a  hogshead  of  Madeira  wine,  &c.  Hence 
you  will  perceive  that  money  is  not  always  necessary  as  a  circulating 
medium:  however,  as  farmers  and  manufacturers  advance  in  busi- 
ness, and  find  their  produce  more  than  equal  to  the  wants  of  their 
families,  they  contract  with  the  storekeeper  to  receive  the  annual 
balance  of  the  latter,  either  in  cash  or  in  land  to  an  equal  amount; 
for  though  no  person  cultivates  a  tenth  part  of  the  land  that  he 
possesses,  everyone  is  animated  with  the  rage  of  making  further 
accessions.  Thus  the  great  landholders  ultimately  absorb  all  the 
hard  money;  and  as  they  principally  reside  in  the  large  towns  on 
the  Atlantic  States,  the  money  finds  its  way  back  to  those,  and  leaves 
many  places  here  without  a  single  dollar.  This  is  productive  of  dis- 
tressing incidents  to  small  farmers  who  supply  the  markets  with 
provisions;  for  whatever  they  have  to  sell,  whether  trivial  or  important, 
they  receive  in  return  nothing  but  an  order  on  a  store  for  the  value  in 
goods ;  and  as  the  wants  of  such  persons  are  few,  they  seldom  know 
what  articles  to  take.  The  storekeepers  turn  this  circumstance  to 
advantage,  and  frequently  force  on  the  customer  a  thing  for  which  he 
has  no  use;  or,  what  is  worse,  when  the  order  is  trifling,  tell  him  to 
sit  down  at  the  door  and  drink  the  amount  if  he  chooses.  As  this 
is  often  complied  with,  a  market  day  is  mostly  a  scene  of  drunkenness 
and  contention,  fraud,  cunning,  and  duplicity;  the  storekeeper  deny- 
ing the  possession  of  a  good  article,  till  he  fails  in  imposing  a  bad  one. 
I  have  known  a  person  to  ask  for  a  pair  of  shoes,  and  receive  for 
answer  that  there  were  no  shoes  in  the  store,  but  some  capital  gin  that 
could  be  recommended  to  him.  I  have  heard  another  ask  for  a  rifle 
gun,  and  be  answered  that  there  were  no  rifles,  but  that  he  could  be 
accomodated  with  the  best  Dutch  looking  glasses  and  German  flutes 
in  the  western  country.  Another  was  directed  by  his  wife  to  bring 
her  a  warming  pan,  smoothing  irons,  and  scrubbing  brushes;  but 
these  were  denied;  and  a  wooden  cuckoo-clock,  which  the  children 
would  not  take  a  week  to  demolish,  was  sent  home  in  their  stead. 
I  could  not  help  smiling  at  these  absurdities,  though  I  believe  they 
deserve  the  name  of  impositions,  till  an  incident  reduced  me  to  the 
condition  of  those  whom  I  have  just  described.  I  rode  an  excellent 
horse  to  the  head  of  the  waters;  and  finding  him  of  no  further  use 
from  my  having  to  take  boat  there,  I  proposed  selling  him  to  the  best 
bidder.  I  was  offered  in  exchange  for  him  salt,  flour,  hogs,  land, 
cast-iron  salt  pans,  Indian  corn,  whiskey,  —  in  short,  everything  but 
what  I  wanted,  which  was  money.  The  highest  offer  made,  was 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     249 

cast-iron  salt  pans  to  the  amount  of  a  hundred  and  thirty  dollars. 
I  asked  the  proprietor  of  this  heavy  commodity,  how  much  cash  he 
would  allow  me  instead  of  such  an  incumbrance;  his  answer  was, 
without  any  shame  or  hesitation,  forty  dollars  at  most.  I  preferred 
the  pans;  though  they  are  to  be  exchanged  again  for  glass  bottles  at 
Pittsburg,  tobacco  or  hemp  in  Kentucky,  and  dollars  in  New  Orleans. 
These  various  commercial  processes  may  occupy  twelve  months;  nor 
am  I  then  certain  of  the  amount,  unless  I  give  30  per  cent,  to 
secure  it. 

The  words  buy  and  sell  are  nearly  unknown  here;  in  business 
nothing  is  heard  but  the  word  trade.  "Will  you  trade  your  watch, 
your  gun,  pistols,  horses?  &c."  means,  "Will  you  exchange  your  watch, 
gun,  &c.  for  corn,  pigs,  cattle,  Indian  meal?  &c."  But  you  must 
anticipate  all  this  from  the  absence  of  money. 

I.    The  Peddler  as  a  Distributor  of  Goods,  1797  1 

When  means  of  transportation  were  poor  and  expensive  and  markets  were  local, 
the  peddler  performed  a  very  useful  service  in  distributing  manufactured  goods 
to  consumers  in  regions  far  removed  from  the  points  of  production.  A  graphic 
picture  is  given  by  Dwight,  who  later  became  president  of  Yale  College. 

The  inhabitants  of  this  village  [Berlin,  Conn.]]  make  great  quan- 
tities of  tin  ware;  or  untensils,  formed  of  tinned  plates.  As  this 
species  of  manufacture,  on  the  Western  side  of  the  Atlantic,  probably 
commenced  here;  I  will  give  you  an  account  of  the  manner,  in  which 
it  was  introduced.  .  .  . 

For  many  years,  after  tinned  plates  were  manufactured  in  this 
place  into  culinary  vessels,  the  only  method  used  by  the  pedlars  for 
conveying  them  to  distant  towns,  for  sale,  was  by  means  of  a  horse 
and  two  baskets,  balanced  on  his  back.  After  the  war,  carts  and 
waggons  were  used  for  this  purpose,  and  have,  from  that  time  to  the 
present,  been  the  only  means  of  conveyance  which  have  been  adopted. 

The  manner,  in  which  this  ware  is  disposed  of,  puts  to  flight  all 
calculation.  A  young  man  is  furnished  by  the  proprietor  with  a 
horse,  and  a  cart  covered  with  a  box,  containing  as  many  tin  vessels, 
as  the  horse  can  conveniently  draw.  This  vehicle  within  a  few  years 
has,  indeed,  been  frequently  exchanged  for  a  waggon;  and  then  the 
load  is  doubled.  Thus  prepared,  he  sets  out  on  an  expedition  for 
the  winter.  A  multitude  of  these  young  men  direct  themselves  to 
the  Southern  States;  and  in  their  excursions  travel  wherever  they 

1  Travels  in  New  England  and  New  York.     By  Timothy  Dwight  (London,  1823), 
II,  43-4- 


250  READINGS  IN  ECONOMIC  HISTORY 

can  find  settlements.  Each  of  them  walks,  and  rides,  alternately, 
through  this  vast  distance,  till  he  reaches  Richmond,  Newbern, 
Charleston,  or  Savannah;  and  usually  carries  with  him  to  the  place 
of  his  destination  no  small  part  of  the  gain,  which  he  has  acquired 
upon  the  road.  Here  he  finds  one  or  more  workmen,  who  have 
been  sent  forward  to  co-operate  with  him,  furnished  with  a  sufficient 
quantity  of  tinned  plates  to  supply  him  with  all  the  ware  which  he  can 
sell  during  the  season.  With  this  he  wanders  into  the  interior 
country;  calls  at  every  door  on  his  way;  and  with  an  address,  and 
pertinacity,  not  easily  resisted,  compels  no  small  number  of  the  in- 
habitants to  buy.  At  the  commencement  of  the  summer  they  return 
to  New- York;  and  thence  to  New-Haven,  by  water;  after  selling 
their  vehicles,  and  their  horses.  The  original  load  of  a  single  horse, 
as  I  am  told,  is  rarely  worth  more  than  three  hundred  dollars;  or  of  a 
waggon,  more  than  six  hundred.  Yet  this  business  is  said  to  yield 
both  the  owner  and  his  agent  valuable  returns;  and  the  profit  to  be 
greater  than  that,  which  is  made  by  the  sale  of  any  other  merchandize 
of  equal  value.  Even  those,  who  carry  out  a  single  load,  and  dispose 
of  it  in  the  neighbouring  country  find  their  employment  profitable. 
In  this  manner  considerable  wealth  has  been  accumulated  in  Worth- 
ington,  and  in  several  towns  in  its  vicinity. 

Every  inhabited  part  of  the  United  States  is  visited  by  these  men. 
I  have  seen  them  on  the  peninsula  of  Cape  Cod,  and  in  the  neigh- 
bourhood of  Lake  Erie;  distant  from  each  other  more  than  six  hun- 
dred miles.  They  make  their  way  to  Detroit,  four  hundred  miles 
farther;  to  Canada;  to  Kentucky;  and,  if  I  mistake  not,  to  New- 
Orleans  and  St.  Louis.  .  .  . 

J.   The  Invention  of  the  Steamboat,  1807  l 

Although  several  other  American  inventors  had  succeeded  in  propelling  vessels 
through  the  water  by  means  of  steam,  Fulton  was  the  first  to  make  a  commercially 
successful  steamboat.  The  sailing  of  the  Clermont  up  the  Hudson  in  1807  marked 
the  real  beginning  of  steamboat  navigation  in  the  United  States,  and  introduced 
a  new  epoch  in  transportation. 

FIRST   LETTER 

I  arrived  this  afternoon  at  four  o'clock  in  the  steamboat  from 
Albany.  As  the  success  of  my  experiment  gives  me  great  hopes  that 
such  boats  may  be  rendered  of  great  importance  to  my  country,  to 
prevent  erroneous  opinions  and  give  some  satisfaction  to  my  friends 

1  Two  Letters.     By  Robert  Fulton.     Reprinted  in  Epochs  of  American  History. 
Edited  by  F.  W.  Halsey  (New  York,  1912),  IV,  195-6. 


AGRICULTURE,   SLAVERY  AND   INTERNAL  TRADE     251 

of  useful  improvements,  you  will  have  the  goodness  to  publish  the 
following  statement  of  facts: 

I  left  New  York  on  Monday  at  one  o'clock  and  arrived  at  Cler- 
mont,  the  seat  of  Chancellor  Livingston,  at  one  o'clock  on  Tuesday: 
time,  twenty-four  hours;  distance,  one  hundred  and  ten  miles.  On 
Wednesday  I  departed  from  the  Chancellor's  at  nine  in  the  morning, 
and  arrived  at  Albany  at  five  in  the  afternoon:  distance,  forty  miles; 
time,  eight  hours.  The  sum  is  one  hundred  and  fifty  miles  in  thirty- 
two  hours,  equal  to  near  five  miles  an  hour. 

On  Thursday,  at  nine  o'clock  in  the  morning,  I  left  Albany,  and 
arrived  at  the  Chancellor's  at  six  in  the  evening.  I  started  from  thence 
at  seven,  and  arrived  at  New  York  at  four  in  the  afternoon:  time, 
thirty  hours;  space  run  through,  one  hundred  and  fifty  miles,  equal 
to  five  miles  an  hour.  Throughout  my  whole  way,  both  going  and 
returning,  the  wind  was  ahead.  No  advantage  could  be  derived  from 
my  sails.  The  whole  has  therefore  been  performed  by  the  power  of 
the  steam-engine. 

SECOND   LETTER 

My  steamboat  voyage  to  Albany  and  back  has  turned  out  rather 
more  favorably  than  I  had  calculated.  The  distance  from  New  York 
to  Albany  is  one  hundred  and  fifty  miles.  I  ran  it  up  in  thirty-two 
hours,  and  down  in  thirty.  I  had  a  light  breeze  against  me  the  whole 
way,  both  going  and  coming;  and  the  voyage  has  been  performed 
wholly  by  the  power  of  the  steam-engine.  I  overtook  many  sloops 
and  schooners  beating  to  windward,  and  parted  with  them. 

The  power  of  propelling  boats  by  steam  is  now  fully  proved. 
The  morning  I  left  New  York  there  were  not  perhaps  thirty  persons 
in  the  city  who  believed  that  the  boat  would  ever  move  one  mile  an 
hour  or  be  of  the  least  utility;  and,  while  we  were  putting  off  from 
the  wharf,  which  was  crowded  with  spectators,  I  heard  a  number  of 
sarcastic  remarks.  This  is  the  way  in  which  ignorant  men  com- 
pliment what  they  call  philosophers  and  projectors. 

Having  employed  much  time,  money,  and  zeal  in  accomplishing 
this  work,  it  gives  me,  as  it  will  you,  great  pleasure  to  see  it  answer 
my  expectations.  It  will  give  a  cheap  and  quick  conveyance  to  the 
merchandize  on  the  Mississippi,  Missouri,  and  other  great  rivers, 
which  are  now  laying  open  their  treasures  to  the  enterprise  of  our 
countrymen;  and,  altho  the  prospect  of  personal  emolument  has 
been  some  inducement  to  me,  yet  I  feel  infinitely  more  pleasure  in 
reflecting  on  the  immense  advantage  my  country  will  derive. 


CHAPTER  VIII 

INTRODUCTION  OF  MANUFACTURES  AND  CONDITION 
OF  THE  PEOPLE,  1775-1816 

I.  MANUFACTURES 

A.   Little  Manufacturing  for  Sale,  1775  l 

Writing  just  on  the  eve  of  the  Revolution  the  author  of  American  Husbandry 
concluded  that  there  was  little  manufacturing  for  the  market  carried  on  in  the 
colonies,  but  that  home  manufactures  were  generally  practiced. 

Nothing  is  more  difficult  than  to  discover  the  amount  of  their 
manufactures  for  sale : .  .  . 

That  the  manufactures  for  sale  are  not  so  great  as  some  have 
imagined,  may  be  conceived  from  the  vast  number  of  inhabitants, 
who  in  all  probability  work  entirely  for  themselves;  in  a  country  where 
the  minute  division  of  landed  property  is  so  great  as  in  the  most  popu- 
lous of  the  northern  colonies,  and  in  a  climate  that  will  yield  little 
valuable,  it  is  impossible  that  the  people  should  be  able  to  purchase 
manufactures:  poor  countrymen  in  England  do  it  because  all  their 
income  is  paid  them  in  money,  whatever  may  be  their  work;  but  in 
America  day-labourers  are  rarely  to  be  found,  except  in  the  neighbour- 
hood of  great  towns;  on  the  contrary,  the  man  who  in  England 
would  be  a  labourer,  would  there  be  a  little  free-holder,  who  probably 
raising  for  many  years  but  little  for  sale,  is  forced  to  work  up  his  wool 
in  his  family,  his  leather,  and  his  flax,  after  which,  the  rest  of  his 
consumption  is  scarce  worth  mentioning.  The  number  of  people  in 
the  northern  colonies  who  come  under  this  denomination  is  very 
great.  .  .  . 

B.  Obstacles  to  Manufactures,  1776 2 

Some  of  the  disadvantages  under  which  manufactures  labored  in  America,  as 
cited  by  Dean  Tucker,  were  real  and  others  were  imaginary,  but  the  truth  was  that 
agriculture,  fishing,  and  commerce  were  more  lucrative  branches  of  enterprise. 
Tucker  wrote  with  a  bias,  yet  with  shrewdness. 

1  American  Husbandry.     By  an  American  (London,  1775),  II,  259-60. 

2  A  Series  of  Answers  to  Certain  Popular  Objections,  against  Separating  from  the 
Rebellious  Colonies,  and  Discarding  them  entirely.    By  Josiah  Tucker  (Glocester, 
1776),  42-3. 


INTRODUCTION  OF  MANUFACTURES        253 

In  regard  to  the  Capability  of  America  to  rival  Great-Britain  in 
the  Cheapness  and  Goodness  of  Manufactures  (which  are  the  main 
Points  to  be  attended  to)  be  it  observed,  that  America  naturally 
labours  under  many  capital  Defects  respecting  Manufactures.  For 
in  the  first  Place,  it  doth  not  abound  with  Wool,  or  Silk,  Copper, 
Iron,  Lead,  Tin,  or  Coals;  Articles  of  the  utmost  Consequence  in 
establishing  large  and  extensive  Manufactures:  —  Secondly,  the  Cli- 
mate of  the  greatest  Part  of  the  Country  is  unfavorable  to  several 
Species  of  Manufactures,  being  either  too  cold,  and  too  much  frozen 
up  in  Winter,  or  too  melting  and  suffocating  in  Summer;  and  very 
frequently  the  same  Country  or  Province  partakes  of  both  Extremes. 
Thirdly,  the  Genius  and  Disposition  of  the  People  are  not  turned 
towards  hard  and  constant  Labour;  a  Circumstance  this,  which  is  vis- 
ible through  every  Part  of  this  great  Continent.  Fourthly,  their  small 
Capitals,  and  Want  of  Credit  is  another  very  great  Impediment;  and 
it  is  too  apparent  that  this  Difficulty  is  not  likely  to  be  removed  by 
their  present  Conduct.  Fifthly,  their  Desertion  of  the  Sea  Coasts, 
and  removing  in  such  Shoals  up  into  the  Country,  beyond  the  Alli- 
gahenny  Mountains,  as  they  now  do,  or  lately  did,  is  another  great 
Bar  to  the  Encrease  of  any  Manufactures,  which  could  come  in  to 
Competition  with  the  English  in  any  foreign  Market. 

C.   Manufactures  after  the  Revolution,  1788  l 

During  the  Revolution,  when  foreign  trade  was  cut  off  and  the  country  was 
thrown  upon  its  own  resources,  manufactures  sprang  up  on  every  side.  These 
were  encouraged  in  some  of  the  states  by  means  of  protective  tariffs.  Brissot, 
who  was  enthusiastic  about  everything  in  the  new  republic,  gives  a  glowing  account 
of  their  development  which  does  not  quite  harmonize  with  the  gloomy  picture 
presented  the  following  year  when  protection  was  requested  of  the  national 
Congress. 

EXPORTATIONS   AND   MANUFACTURES 

If  any  thing  can  give  an  idea  of  the  high  degree  of  prosperity, 
to  which  these  confederated  republics  are  making  rapid  strides,  it  is 
the  contemplation  of  these  two  subjects.  It  is  impossible  to  enum- 
erate all  the  articles  to  which  they  have  turned  their  attention; 
almost  one  half  of  which  were  unknown  before  the  war.  Among 
the  principal  ones  are  ship-building,  flour,  rice,  tobacco,  manufactures 
in  woollen,  linen,  hemp  and  cotton;  the  fisheries,  oils,  forges,  and  the 
different  articles  in  iron  and  steel;  instruments  of  agriculture,  nails, 

1  New  Travels  in  the  United  States  of  America,  performed  in  1788.     By  J.  P. 
Brissot  de  Warville  (Dublin,  1792),  465-8. 


254  READINGS  IN  ECONOMIC  HISTORY 

leather,  and  the  numerous  objects  in  which  they  are  employed; 
paper,  paste-board,  parchment,  printing,  pot-ash,  pearl-ash,  hats  of 
all  qualities,  ship-timber,  and  the  other  wood  of  construction;  cabinet- 
work, cordage,  cables,  carriages;  works  in  brass,  copper  and  lead; 
glass  of  different  kinds;  gun-powder,  cheese,  butter,  callicoes,  printed 
linen,  indigo,  furrs,  &c.  Ship-building  is  one  of  the  most  profitable 
branches  of  business  in  America.  They  built  ships  here  before  the 
war,  but  they  were  not  permitted  to  manufacture  the  articles  necessary 
to  equip  them ;  every  article  is  now  made  in  the  country.  A  fine  ship, 
called  the  Massachusetts,  of  eight  hundred  tons,  belonging  to  Mr. 
Shaw,  had  its  sails  and  cordage  wholly  from  the  manufacture  of 
Boston;  this  single  establishment  gives  already  two  thousand  yards 
of  sail-cloth  a  week. 

Breweries  augment  every  where,  and  take  place  of  the  fatal  dis- 
tilleries. There  are  no  less  than  fourteen  good  breweries  in  Philadel- 
phia. The  infant  woollen  manufactory  at  Hartford,  from  September, 
1788,  to  September,  1789,  gave  about  five  thousand  yards  of  cloth, 
some  of  which  sells  at  five  dollars  a  yard;  another  at  Watertown 
in  Massachusetts,  promises  equal  success,  and  engages  the  farmers 
to  multiply  their  sheep. 

Cotton  succeeds  equally  well.  The  spinning  machines  of  Ark- 
wright  are  well  known  here,  and  are  made  in  the  country. 

We  have  justly  remarked  in  our  work  on  the  United  States,  that 
nature  invites  the  Americans  to  the  labour  of  the  forge,  by  the  profuse 
manner  in  which  she  has  covered  their  soil  with  wood,  and  interspersed 
it  with  metal  and  coals.  Pennsylvania,  New  Jersey,  and  Delaware, 
make  annually  three  hundred  and  fifty  tons  of  steel,  and  six  hundred 
tons  of  nails  and  nail  rods.  These  articles  are  already  exported  from 
America;  as  are  machines  for  carding  wool  and  cotton,  particularly 
common  cards,  which  are  cheaper  than  the  English,  and  of  a  superior 
quality.  In  these  three  states  are  sixty-three  paper-mills,  which 
manufacture  annually  to  the  amount  of  250,000  dollars.  The  state 
of  Connecticut  last  year  made  five  thousand  reams,  which  might  be 
worth  nine  thousand  dollars. 

The  prodigious  consumption  of  all  kinds  of  glass  multiplies  the 
establishment  of  glass  works.  The  one  on  the  Potowmack  employs 
five  hundred  persons.  They  have  begun  with  success,  at  Philadelphia, 
the  printing  of  callicoes,  cotton,  and  linen.  Sugar  refiners  are  in- 
creasing every  where.  In  Pennsylvania  are  twenty-one  powder-mills, 
which  are  supposed  to  produce  annually  625  tons  of  gun  powder. 


INTRODUCTION  OF  MANUFACTURES  255 

D.   Manufactures  before  1789 l 

The  report  of  Phineas  Bond  to  the  English  government  reassures  it  that  there 
is  no  danger  that  the  Americans  will  manufacture  for  themselves,  but  that  the 
English  could  count  confidently  on  the  American  market  for  the  disposal  of  their 
goods.  While  Bond's  arguments  were  on  the  whole  sound,  it  seems  that  he  was 
generally  careful  to  report  what  the  English  would  be  pleased  to  read. 

In  answer  to  the  6th  point  of  your  Grace's  inquiries  I  have  collected 
as  accurate  an  account  as  I  possibly  could  of  the  State  of  manufac- 
tures thro'  out  this  continent  and  have  endeavored  to  form  some 
judgement  upon  the  subject  which  I  take  the  liberty  of  submitting 
to  your  Grace's  consideration.  (No.  22)  — America  must  for  a  long 
time  my  Lord  be  under  the  necessity  of  purchasing  and  importing 
vast  quantities  of  British  or  other  European  manufactures  —  the 
preference  has  and  will  be  given  to  British  manufactures,  they  are  for 
the  most  part  of  the  best  quality  and  of  course  come  cheapest  to  the 
consumer  in  the  end.  The  credit  too  which  the  merchants  of  England 
allow  to  the  American  traders,  is  infinitely  more  liberal  than  any 
other  nation  upon  earth  can  afford;  in  so  much  that  many  articles 
of  foreign,  European  manufacture,  calculated  for  the  American  mar- 
ket, are  brought  hither  circuitously  thro'  England  and  English  credit 
is  resorted  to  as  the  immediate  mode  of  payment  for  such  foreign 
articles. 

In  a  country,  my  Lord,  so  extensive  as  this  continent  with  a  sea- 
board frontery  of  1500  miles  in  length  and  a  Western  limit  hitherto 
undefined  at  present  inhabited  by  scarcely  more  than  3,000,000  of 
people  possessing  a  strong  natural  disposition  to  husbandry  with  a 
powerful  propensity  to  migrate  a  series  of  centuries  must  elapse 
before  this  country  will  be  peopled  to  such  a  degree  as  to  make  the 
encouragement  of  manufacture  an  object  of  necessary  recourse: 
Agriculture  will  long  continue  the  source  from  whence  the  mass  of 
people  will  draw  their  subsistence.  .  .  .  Manufactures  which  re- 
quire art,  labour,  and  expence  to  any  great  extent  of  either,  may  be 
attempted  but  they  will  often  fail  for  want  of  capitals  and  because 
the  extensive  capitals  in  Europe  can  afford  their  manufactures  at 
a  rate,  vastly  lower,  than  almost  anything  can  be  afforded  for  which 
is  undertaken  here. 

Where  the  raw  material  however  can  be  taken  from  the  earth 
and  converted  into  an  article  of  immediate  use  or  speedy  demand 

1  Report  of  Phineas  Bond,  British  Consul  in  Philadelphia,  to  his  Government, 
November  10,  1789.  In  Annual  Report  of  the  American  Historical  Association 
(Washington,  1897),  I,  630-2. 


256  READINGS  IN  ECONOMIC  HISTORY 

with  little  expence  and  art  and  where  from  the  bulk  or  weight  of  the 
foreign  manufacture,  the  expence  which  may  attend  the  carriage  is 
great,  the  American  manufacturers  will  have  the  advantage  of  the 
European  manufacturers,  and  in  this  line  the  Americans  do  and  will 
succeed. 

Under  the  description  of  articles  of  immediate  use  and  speedy 
demand  may  be  comprehended  nails  and  coarse  manufactures  of 
iron,  Tools  which  relate  to  husbandry,  to  architecture  and  which  are 
used  by  most  Handycraftsmen.  Under  the  description  of  articles 
of  heavy  bulk  or  weight  may  be  comprehended  anvils,  forge  hammers, 
anchors  and  cast  irons  of  various  kinds  for  mills,  carriages  and  other 
purposes. 

E.  A  Petition  for  Protection,  1789  l 

When  the  first  Congress  met  under  the  new  Constitution  it  was  petitioned  for 
relief  by  numerous  infant  industries.  The  one  cited  is  typical  of  many  similar 
ones.  The  first  act  passed  by  Congress  was  a  tariff  act,  primarily  for  revenue 
purposes,  but  which  granted  some  slight  amount  of  protection. 

Saturday,  April  n  [1789]. 

Mr.  Smith,  (of  Maryland)  presented  a  petition  from  the  trades- 
men, manufacturers,  and  others,  of  the  town  of  Baltimore,  which 
was  read,  setting  forth,  That,  since  the  close  of  the  late  war,  and  the 
completion  of  the  Revolution,  they  have  observed  with  serious  regret 
the  manufacturing  and  the  trading  interest  of  the  country  rapidly 
declining,  and  the  attempts  of  the  State  Legislatures  to  remedy  the 
evil  failing  of  their  object;  that,  in  the  present  melancholy  state  of 
our  country,  the  number  of  poor  increasing  for  want  of  employment, 
foreign  debts  accumulating,  houses  and  lands  depreciating  in  value, 
and  trade  and  manufactures  languishing  and  expiring,  they  look  up 
to  the  Supreme  Legislature  of  the  United  States  as  the  guardians 
of  the  whole  empire,  and  from  their  united  wisdom  and  patriotism, 
and  ardent  love  of  their  country,  expect  to  derive  that  aid  and  assist- 
ance which  alone  can  dissipate  their  just  apprehensions,  and  animate 
them  with  hopes  of  success  in  future,  by  imposing  on  all  foreign  articles, 
which  can  be  made  in  America,  such  duties  as  will  give  a  just  and 
decided  preference  to  their  labors;  discountenancing  that  trade 
which  tends  so  materially  to  injure  them  and  impoverish  their  country; 
measures  which,  in  their  consequences,  may  also  contribute  to  the 
discharge  of  the  national  debt  and  the  due  support  of  the  Government; 
that  they  have  annexed  a  list  of  such  articles  as  are  or  can  be  manu- 

1  Annals  of  Congress  (Washington,  1834),  I,  115. 


INTRODUCTION  OF  MANUFACTURES  257 

factured  amongst  them,  and  humbly  trust  in  the  wisdom  of  the  Legis- 
lature to  grant  them,  in  common  with  the  other  mechanics  and  manu- 
facturers of  the  United  States,  that  relief  which  may  appear  proper. 


F. 

The  House  of  Representatives  in  January,  1790,  requested  Hamilton,  the 
Secretary  of  the  Treasury,  to  prepare  a  report  on  manufactures,  but  he  did 
not  present  it  until  nearly  two  years  later,  in  December,  1791.  The  report  is  said 
by  Professor  Taussig  to  be  "the  strongest  presentation  of  the  case  for  protection 
which  has  been  made  by  any  American  statesman."  Owing  to  the  outbreak  soon 
after  of  the  Napoleonic  Wars,  however,  and  the  consequent  greater  profitableness 
of  agriculture  and  commerce,  the  report  had  little  effect  in  promoting  tariff  legisla- 
tion at  the  time.  The  parts  cited  in  this  extract  are  meant  to  illustrate  the  state 
of  manufactures  rather  than  the  arguments  for  protection. 

The  expediency  of  encouraging  manufactures  in  the  United 
States,  which  was  not  long  since  deemed  very  questionable,  appears 
at  this  time  to  be  pretty  generally  admitted.  The  embarrassments 
which  have  obstructed  the  progress  of  our  external  trade  have  led  to 
serious  reflections  on  the  necessity  of  enlarging  the  sphere  of  our 
domestic  commerce.  The  restrictive  regulations,  which  in  foreign 
markets  abridge  the  vent  of  the  increasing  surplus  of  our  agricultural 
produce,  serve  to  beget  an  earnest  desire  that  a  more  extensive  de- 
mand for  that  surplus  may  be  created  at  home;  and  the  complete 
success  which  has  rewarded  manufacturing  enterprise,  in  some  valu- 
able branches,  conspiring  with  the  promising  symptoms  which  attend 
some  less  mature  essays  in  others,  justify  a  hope  that  the  obstacles 
to  the  growth  of  this  species  of  industry  are  less  formidable  than  they 
were  apprehended  to  be;  and  that  it  is  not  difficult  to  find,  in  its 
further  extension,  a  full  indemnification  for  any  external  disad- 
vantages which  are  or  may  be  experienced,  as  well  as  an  accession 
of  resources  favorable  to  national  independence  and  safety. 

There  still  are,  nevertheless,  respectable  patrons  of  opinions 
unfriendly  to  the  encouragement  of  manufactures.  The  following 
are,  substantially,  the  arguments  by  which  these  opinions  are  defended: 

"In  every  country  (say  those  who  entertain  them),  agriculture 
is  the  most  beneficial  and  productive  object  of  human  industry. 
This  position,  generally,  if  not  universally  true,  applies  with  peculiar 
emphasis  to  the  United  States,  on  account  of  their  immense  tracts 
of  fertile  territory,  uninhabited  and  unimproved.  Nothing  can 

1  Report    on    Manufactures.     By    Alexander    Hamilton.     In    American    State 
Papers,  Series  Finance  (Washington,  1832),  I,  123-144,  passim. 


258  READINGS  IN  ECONOMIC  HISTORY 

afford  so  advantageous  an  employment  for  capital  and  labor,  as  the 
conversion  of  this  extensive  wilderness  into  cultivated  farms.  Nothing 
equally  with  this  can  contribute  to  the  population,  strength,  and  real 
riches  of  the  country. 

"To  endeavor,  by  the  extraordinary  patronage  of  government, 
to  accelerate  the  growth  of  manufactures,  is  in  fact  to  endeavor, 
by  force  and  art,  to  transfer  the  natural  current  of  industry  from  a 
more  to  a  less  beneficial  channel.  .  .  . 

"This  policy  is  not  only  recommended  to  the  United  States  by 
considerations  which  affect  all  nations;  it  is,  in  a  manner,  dictated 
to  them  by  the  imperious  force  of  a  very  peculiar  situation.  The 
smallness  of  their  population,  compared  with  their  territory;  the 
constant  allurements  to  emigration  from  the  settled  to  the  unsettled 
parts  of  the  country;  the  facility  with  which  the  less  independent 
condition  of  an  artisan  can  be  exchanged  for  the  more  independent 
condition  of  a  farmer;  these  and  similar  causes  conspire  to  produce, 
and  for  a  length  of  time  must  continue  to  occasion,  a  scarcity  of  hands 
for  manufacturing  occupation,  and  dearness  of  labor  generally. 
To  these  disadvantages  for  the  prosecution  of  manufactures,  a  de- 
ficiency of  pecuniary  capital  being  added,  the  prospect  of  a  successful 
competition  with  the  manufacturers  of  Europe  must  be  regarded  as 
little  less  than  desperate.  Extensive  manufactures  can  only  be  the 
offspring  of  a  redundant,  at  least  of  a  full  population.  Till  the  latter 
shall  characterize  the  situation  of  this  country,  'tis  vain  to  hope 
for  the  former.  ..." 

This  mode  of  reasoning  is  founded  upon  facts  and  principles 
which  have  certainly  respectable  pretensions.  .  .  . 

The  objections  to  the  pursuit  of  manufactures  in  the  United 
States,  which  next  present  themselves  to  discussion,  represent  an 
impracticability  of  success  arising  from  three  causes:  scarcity  of 
hands,  dearness  of  labor,  want  of  capital. 

The  two  first  circumstances  are  to  a  certain  extent  real,  and  within 
due  limits  ought  to  be  admitted  as  obstacles  to  the  success  of  manu- 
facturing enterprise  in  the  United  States.  But  there  are  various 
considerations  which  lessen  their  force,  and  tend  to  afford  an  assur- 
ance that  they  are  not  sufficient  to  prevent  the  advantageous  prose- 
cution of  many  very  useful  and  extensive  manufactories.  .  .  . 

To  all  the  arguments  which  are  brought  to  evince  the  imprac- 
ticability of  success  in  manufacturing  establishments  in  the  United 
States,  it  might  have  been  a  sufficient  answer  to  have  referred  to  the 
experience  of  what  has  been  already  done.  It  is  certain  that  several 


INTRODUCTION  OF  MANUFACTURES  259 

important  branches  have  grown  up  and  flourished  with  a  rapidity 
which  surprises,  affording  an  encouraging  assurance  of  success  in 
future  attempts.  Of  these  it  may  not  be  improper  to  enumerate  the 
most  considerable:  - 

1.  Of  Skins. —  Tanned  and  tawed  leather,  dressed  skins,  shoes, 
boots,  and  slippers,  harness  and  saddlery  of  all  kinds,  portmanteaus 
and  trunks,  leather  breeches,  gloves,  muffs  and  tippets,  parchment 
and  glue. 

2.  Of  Iron. —  Bar  and  sheet  iron,  steel,  nail  rods  and  nails,  imple- 
ments of  husbandry,  stoves,  pots,  and  other  household  utensils,  the 
steel  and  iron  work  of    carriages,   and    for    shipbuilding,   anchors, 
scale-beams,  and  weights,  and  various  tools  of  artificers,  arms  of 
different  kinds;    though  the  manufacture  of  these  last  has  of  late 
diminished  for  want  of  demand. 

3.  Of  Wood. —  Ships,    cabinet    wares    and    turnery,    wool    and 
cotton  cards,  and  other  machinery  for  manufactures  and  husbandry, 
mathematical  instruments,  coopers'  wares  of  every  kind. 

4.  Of  Flax  and  Hemp. —  Cables,  sail-cloth,  cordage,  twine  and 
packthread. 

5.  Bricks,  and  coarse  tiles  and  potters'  wares. 

6.  Ardent  spirits  and  malt  liquors. 

7.  Writing  and  printing  paper,  sheathing  and  wrapping  paper, 
pasteboards,  fullers'  or  press  papers,  paper  hangings. 

8.  Hats  of  fur  and  wool,  and  mixtures  of  both,  women's  stuff 
and  silk  shoes. 

9.  Refined  sugars. 

10.  Oils   of   animals   and   seeds,    soap,    spermaceti   and   tallow 
candles. 

n.  Copper  and  brass  wares  (particularly  utensils  for  distillers, 
sugar  refiners  and  brewers),  andirons  and  other  articles  for  household 
use,  philosophical  apparatus. 

12.  Tin  wares  for  most  purposes  of  ordinary  use. 

13.  Carriages  of  all  kinds. 

14.  Snuff,  chewing  and  smoking  tobacco. 

15.  Starch  and  hair  powder. 

1 6.  Lampblack  and  other  painters'  colors. 

17.  Gunpowder. 

Besides  manufactories  of  these  articles,  which  are  carried  on  as 
regular  trades,  and  have  attained  to  a  considerable  degree  of  maturity, 
there  is  a  vast  scene  of  household  manufacturing  which  contributes 
more  largely  to  the  supply  of  the  community  than  could  be  imagined 


260  READINGS  IN  ECONOMIC  HISTORY 

without  having  made  it  an  object  of  particular  inquiry.  This  obser- 
vation is  the  pleasing  result  of  the  investigation  to  which  the  subject 
of  this  report  has  led,  and  is  applicable  as  well  to  the  southern  as  to 
the  middle  and  northern  States.  Great  quantities  of  coarse  cloths, 
coatings,  serges  and  flannels,  linsey-woolseys,  hosiery  of  wool,  cotton 
and  thread,  coarse  fustians,  jeans  and  muslins,  checked  and  striped 
cotton  and  linen  goods,  bedticks,  coverlets  and  counterpanes,  tow 
linens,  coarse  shirtings,  sheetings,  toweling  and  table  linen,  and 
various  mixtures  of  wool  and  cotton,  and  of  cotton  and  flax,  are  made 
in  the  household  way,  and  in  many  instances  to  an  extent  not  only 
sufficient  for  the  supply  of  the  families  in  which  they  are  made,  but 
for  sale,  and  even  in  some  cases  for  exportation.  It  is  computed  in 
a  number  of  districts  that  two-thirds,  three-fourths,  and  even  four- 
fifths  of  all  the  clothing  of  the  inhabitants  are  made  by  themselves. 
The  importance  of  so  great  a  progress  as  appears  to  have  been  made 
in  family  manufactures  within  a  few  years,  both  in  a  moral  and 
political  view,  renders  the  fact  highly  interesting.  .  .  . 

A  designation  of  the  principal  raw  material  of  which  each  manu- 
facture is  composed  will  serve  to  introduce  the  remarks  upon  it;  as, 
in  the  first  place, 

IRON 

The  manufactures  of  this  article  are  entitled  to  pre-eminent  rank. 
None  are  more  essential  in  their  kinds,  nor  so  extensive  in  their  uses. 
They  constitute,  in  whole,  or  in  part,  the  implements  or  the  materials, 
or  both,  of  almost  every  useful  occupation.  Their  instrumentality 
is  everywhere  conspicuous. 

It  is  fortunate  for  the  United  States  that  they  have  peculiar 
advantages  for  deriving  the  full  benefit  of  this  most  valuable  material 
and  they  have  every  motive  to  improve  it  with  systematic  care.  It 
is  to  be  found  in  various  parts  of  the  United  States  in  great  abundance, 
and  of  almost  every  quality;  and  fuel,  the  chief  instrument  in  manu- 
facturing it,  is  both  cheap  and  plenty.  This  particularly  applies  to 
charcoal;  but  there  are  productive  coal  mines  already  in  operation, 
and  strong  indications  that  the  material  is  to  be  found  in  abundance 
in  a  variety  of  other  places. 

The  inquiries  to  which  the  subject  of  this  report  has  led  have  been 
answered  with  proofs,  that  manufactories  of  iron,  though  generally 
understood  to  be  extensive,  are  far  more  so  than  is  commonly  supposed. 
The  kinds  in  which  the  greatest  progress  has  been  made  have  been 
mentioned  in  another  place,  and  need  not  be  repeated;  but  there  is 


INTRODUCTION  OF  MANUFACTURES  261 

little  doubt  that  every  other  kind,  with  due  cultivation,  will  rapidly 
succeed.  It  is  worthy  of  remark  that  several  of  the  particular 
trades  of  which  it  is  the  basis  are  capable  of  being  carried  on  without 
the  aid  of  large  capitals. 

Iron  works  have  greatly  increased  in  the  United  States,  and  are 
prosecuted  with  much  more  advantage  than  formerly.  The  average 
price  before  the  Revolution  was  about  $64  per  ton;  at  present  it  is 
about  $80, —  a  rise  which  is  chiefly  to  be  attributed  to  the  increase  of 
manufactures  of  the  material.  .  .  . 

Steel  is  a  branch  which  has  already  made  a  considerable  progress, 
and  it  is  ascertained  that  some  new  enterprises  on  a  more  extensive 
scale  have  been  lately  set  on  foot.  .  .  . 

The  United  States  already  in  a  great  measure  supply  themselves 
with  nails  and  spikes.  They  are  able,  and  ought  certainly  to  do  it 
entirely.  The  first  and  most  laborious  operation  in  this  manufacture 
is  performed  by  water-mills;  and  of  the  persons  afterwards  employed, 
a  great  proportion  are  boys,  whose  early  habits  of  industry  are  of 
importance  to  the  community,  to  the  present  support  of  their  families, 
and  to  their  own  future  comfort.  It  is  not  less  curious  than  true  that, 
in  certain  parts  of  the  country,  the  making  of  nails  is  an  occasional 
family  manufacture.  .  .  . 

The  implements  of  husbandry  are  made  in  several  States  in  great 
abundance.  In  many  places  it  is  done  by  the  common  blacksmiths. 
And  there  is  no  doubt  that  an  ample  supply  for  the  whole  country 
can  with  great  ease  be  procured  among  ourselves. 

Various  kinds  of  edged  tools,  for  the  use  of  mechanics,  are  also 
made;  and  a  considerable  quantity  of  hollow  wares,—  though  the 
business  of  castings  has  not  yet  attained  the  perfection  which  might 
be  wished.  It  is,  however,  improving,  and  as  there  are  respectable 
capitals  in  good  hands  embarked  in  the  prosecution  of  those  branches 
of  iron  manufactories,  which  are  yet  in  their  infancy,  they  may  all 
be  contemplated  as  objects  not  difficult  to  be  acquired.  .  .  . 

Fire-arms,  and  other  military  weapons,  may,  it  is  conceived,  be 
placed  without  inconvenience  in  the  class  of  articles  rated  at  15%. 
There  are  already  manufactories  of  these  articles,  which  only 
require  the  stimulus  of  a  certain  demand  to  render  them  adequate 
to  the  supply  of  the  United  States.  .  .  . 

Manufactures  of  steel  generally,  or  of  which  steel  is  the  article 
of  chief  value,  may  with  advantage  be  placed  in  the  class  of  goods 
rated  at  y|%.  As  manufactures  of  this  kind  have  not  yet  made 
any  considerable  progress,  it  is  a  reason  for  not  rating  them  as  high 


262  READINGS  IN  ECONOMIC  HISTORY 

as  those  of  iron;  but  as  this  material  is  the  basis  of  them,  and  as  their 
extension  is  not  less  practicable  than  important,  it  is  desirable  to 
promote  it  by  a  somewhat  higher  duty  than  the  present.  .  .  . 

COPPER 

The  manufactures  of  which  this  article  is  susceptible  are  also 
of  great  extent  and  utility.  Under  this  description,  those  of  brass, 
of  which  it  is  the  principal  ingredient,  are  intended  to  be  included. 

The  material  is  a  natural  production  of  the  country.  Mines  of 
copper  have  actually  been  wrought,  and  with  profit  to  the  under- 
takers, though  it  is  not  known  that  any  are  now  in  this  condition. 
And  nothing  is  easier  than  the  introduction  of  it  from  other  countries 
on  moderate  terms  and  in  great  plenty. 

Coppersmiths  and  brassfounders,  particularly  the  former,  are 
numerous  in  the  United  States, —  some  of  whom  carry  on  business 
to  a  respectable  extent.  .  .  . 

LEAD 

There  are  numerous  proofs  that  this  material  abounds  in  the 
United  States,  and  requires  little  to  unfold  it  to  an  extent  more  than 
equal  to  every  domestic  occasion.  A  prolific  mine  of  it  has  long  been 
open  in  the  southwestern  parts  of  Virginia,  and  under  a  public  ad- 
ministration, during  the  late  war,  yielded  a  considerable  supply  for 
military  use.  This  is  now  in  the  hands  of  individuals,  who  not  only 
carry  it  on  with  spirit,  but  have  established  manufactories  of  it  at 
Richmond,  in  the  same  State.  .  .  . 

FOSSIL  COAL 

This,  as  an  important  instrument  of  manufactures,  may  without 
impropriety  be  mentioned  among  the  subjects  of  this  report.  .  .  . 

It  is  known  that  there  are  several  coal  mines  in  Virginia,  now 
worked;  and  appearances  of  their  existence  are  familiar  in  a  number  of 
places.  .  .  . 

WOOD 

Several  manufactures  of  this  article  flourish  in  the  United  States. 
Ships  are  nowhere  built  in  greater  perfection,  and  cabinet  wares 
generally  are  made  little,  if  at  all,  inferior  to  those  of  Europe.  Their 
extent  is  such  as  to  have  admitted  of  considerable  exportation.  .  .  . 

SKINS 

.  There  are  scarcely  any  manufactories  of  greater  importance  than 
of  this  article.     Their  direct  and  very  happy  influence  upon  agricul- 


INTRODUCTION  OF  MANUFACTURES  263 

ture,  by  promoting  the  raising  of  cattle  of  different  kinds,  is  a  very 
material  recommendation. 

It  is  pleasing,  too,  to  observe  the  extensive  progress  they  have 
made  in  their  principal  branches,  which  are  so  far  matured  as  almost 
to  defy  foreign  competition.  Tanneries,  in  particular,  are  not  only 
carried  on  as  a  regular  business  in  numerous  instances,  and  in  various 
parts  of  the  country,  but  they  constitute,  in  some  places,  a  valuable 
item  of  incidental  family  manufactures.  .  .  . 

GRAIN 

Ardent  spirits  and  malt  liquors  are,  next  to  flour,  the  two  principal 
manufactures  of  grain.  The  first  has  made  a  very  extensive,  the 
last  a  considerable  progress  in  the  United  States.  In  respect  to  both, 
an  exclusive  possession  of  the  home  market  ought  to  be  secured  to 
the  domestic  manufacturers,  as  fast  as  circumstances  will  admit. 
Nothing  is  more  practicable,  and  nothing  more  desirable.  .  .  . 

The  consumption  of  Geneva,  or  gin,  in  this  country,  is  extensive. 
It  is  not  long  since  distilleries  of  it  have  grown  up  among  us  to  any 
importance.  They  are  now  becoming  of  consequence,  but  being  still 
in  their  infancy,  they  require  protection.  .  .  . 

FLAX  AND  HEMP 

Manufactures  of  these  articles  have  so  much  affinity  to  each  other, 
and  they  are  so  often  blended,  that  they  may  with  advantage  be  con- 
sidered in  conjunction.  The  importance  of  the  linen  branch  to  agri- 
culture; its  precious  effects  upon  household  industry;  the  ease  with 
which  the  materials  can  be  produced  at  home  to  any  requisite  extent; 
the  great  advances  which  have  been  already  made  in  the  coarser 
fabrics  of  them,  especially  in  the  family  way,  —  constitute  claims  of 
peculiar  force  to  the  patronage  of  government.  .  .  . 

COTTON 

There  is  something  in  the  texture  of  this  material  which  adapts 
it  in  a  peculiar  degree  to  the  application  of  machines.  The  signal 
utility  of  the  mill  for  spinning  of  cotton,  not  long  since  invented  in 
England,  has  been  noticed  in  another  place;  but  there  are  other  ma- 
chines scarcely  inferior  in  utility,  which,  in  the  different  manufactories 
of  this  article,  are  employed  either  exclusively  or  with  more  than 
ordinary  effect.  This  very  important  circumstance  recommends  the 
fabrics  of  cotton  in  a  more  particular  manner  to  a  country  in  which 
a  defect  of  hands  constitutes  the  greatest  obstacle  to  success. 

The  variety  and  extent  of  the  uses  to  which  the  manufactures  of 


264  READINGS  IN  ECONOMIC  HISTORY 

this  article  are  applicable  is  another  powerful  argument  in  their 
favor. 

And  the  faculty  of  the  United  States  to  produce  the  raw  material 
in  abundance  and  of  a  quality  which,  though  alleged  to  be  inferior 
to  some  that  is  produced  in  other  quarters,  is  nevertheless  capable 
of  being  used  with  advantage  in  many  fabrics,  and  is  probably  sus- 
ceptible of  being  carried  by  a  more  experienced  culture  to  much 
greater  perfection,  suggests  an  additional  and  a  very  cogent  induce- 
ment to  the  vigorous  pursuit  of  the  cotton  branch  in  its  several 
subdivisions.  .  .  . 

Manufactories  of  cotton  goods  not  long  since  established  at  Beverly, 
in  Massachusetts,  and  at  Providence,  in  the  State  of  Rhode  Island, 
and  conducted  with  a  perseverance  corresponding  with  the  patriotic 
motives  which  began  them,  seem  to  have  overcome  the  first  obstacles 
to  success,  —  producing  corduroys,  velverets,  fustians,  jeans,  and 
other  similar  articles,  of  a  quality  which  will  bear  a  comparison  with 
the  like  articles  brought  from  Manchester.  The  one  at  Providence 
has  the  merit  of  being  the  first  in  introducing  into  the  United  States 
the  celebrated  cotton  mill,  which  not  only  furnishes  materials  for  that 
manufactory  itself,  but  for  the  supply  of  private  families  for  house- 
hold manufacture. 

Other-  manufactories  of  the  same  material  as  regular  businesses 
have  also  been  begun  at  different  places  in  the  State  of  Connecticut, 
but  all  upon  a  smaller  scale  than  those  above  mentioned.  Some  essays 
are  also  making  in  the  printing  and  staining  of  cotton  goods.  There 
are  several  small  establishments  of  this  kind  already  on  foot. 

WOOL 

In  a  country  the  climate  of  which  partakes  of  so  considerable  a 
proportion  of  winter  as  that  of  a  great  part  of  the  United  States,  the 
woollen  branch  cannot  be  regarded  as  inferior  to  any  which  relates 
to  the  clothing  of  the  inhabitants. 

Household  manufactures  of  this  material  are  carried  on  in  differ- 
ent parts  of  the  United  States  to  a  very  interesting  extent,  but  there 
is  only  one  branch  which  as  a  regular  business  can  be  said  to  have 
acquired  maturity.  This  is  the  making  of  hats. 

Hats  of  wool,  and  of  wool  mixed  with  fur,  are  made  in  large 
quantities  in  different  States,  and  nothing  seems  wanting  but  an  ade- 
quate supply  of  materials  to  render  the  manufacture  commensurate 
with  the  demand. 

A  promising  essay  towards  the  fabrication  of  cloths,  cassimeres 


INTRODUCTION  OF  MANUFACTURES        265 

and  other  woollen  goods,  is  likewise  going  on  at  Hartford,  in  Con- 
necticut. Specimens  of  the  different  kinds  which  are  made,  in  the 
possession  of  the  secretary,  evince  that  these  fabrics  have  attained 
a  very  considerable  degree  of  perfection.  Their  quality  certainly 
surpasses  anything  that  could  have  been  looked  for  in  so  short  a 
time  and  under  so  great  disadvantages,  and  conspires  with  the  scanti- 
ness of  the  means  which  have  been  at  the  command  of  the  directors 
to  form  the  eulogium  of  that  public  spirit,  perseverance  and  judgment 
which  have  been  able  to  accomplish  so  much.  .  .  . 

SILK 

The  production  of  this  article  is  attended  with  great  facility  in 
most  parts  of  the  United  States.  Some  pleasing  essays  are  making 
in  Connecticut  as  well  towards  that  as  towards  the  manufacture  of 
what  is  produced.  Stockings,  handkerchiefs,  ribbons  and  buttons 
are  made,  though  as  yet  but  in  small  quantities. 

A  manufactory  of  lace,  upon  a  scale  not  very  extensive,  has  been 
long  memorable  at  Ipswich,  in  the  State  of  Massachusetts.  .  .  . 

GLASS 

The  materials  for  making  glass  are  found  everywhere.  In  the 
United  States  there  is  no  deficiency  of  them.  .  .  . 

GUNPOWDER 

No  small  progress  has  been  of  late  made  in  the  manufacture  of 
this  very  important  article.  It  may,  indeed,  be  considered  as  already 
established,  but  its  high  importance  renders  its  further  extension 
very  desirable.  .  .  . 

PAPER 

Manufactories  of  paper  are  among  those  which  are  arrived  at 
the  greatest  maturity  in  the  United  States,  and  are  most  adequate 
to  national  supply.  That  of  paper-hangings  is  a  branch  in  which 
respectable  progress  has  been  made.  .  .  . 

PRINTED   BOOKS 

The  great  number  of  presses  disseminated  throughout  the  Union 
seem  to  afford  an  assurance  that  there  is  no  need  of  being  indebted 
to  foreign  countries  for  the  printing  of  the  books  which  are  used  in 
the  United  States.  .  .  . 

REFINED   SUGARS   AND  CHOCOLATE 

Are  among  the  number  of  extensive  and  prosperous  domestic 
manufactures.  . 


266  READINGS  IN  ECONOMIC  HISTORY 

There  is  reason  to  believe  that  the  progress  of  particular  manu- 
factures has  been  much  retarded  by  the  want  of  skillful  workmen. 
And  it  often  happens  that  the  capitals  employed  are  not  equal  to  the 
purposes  of  bringing  from  abroad  workmen  of  a  superior  kind.  Here, 
in  cases  worthy  of  it,  the  auxiliary  agency  of  Government  would  in 
all  probability  be  useful.  There  are  also  valuable  workmen  in  every 
branch  who  are  prevented  from  emigrating  solely  by  the  want  of 
means.  Occasional  aids  to  such  persons,  properly  administered, 
might  be  a  source  of  valuable  acquisitions  to  the  country. 

The  propriety  of  stimulating  by  rewards  the  invention  and  intro- 
duction of  useful  improvements,  is  admitted  without  difficulty.  .  .  . 

G.  Progress  of  Manufactures,  1793 l 

The  distance  of  the  United  States  from  Europe  and  the  consequent  cost  of 
carriage  of  foreign  goods  gave  to  domestic  manufactures  a  species  of  protection 
which  Coxe  estimates  at  not  less  than  twenty-five  per  cent.  When  to  this  were 
added  the  possession  of  cheap  raw  materials  and  the  inventive  genius  of  the  Ameri- 
can people,  a  good  case  could  be  made  to  prove  the  success  of  manufactures  in  the 
United  States.  At  this  juncture,  however,  the  European  wars  gave  to  our  agri- 
culture and  commerce  such  an  opportunity  for  profit  that  there  was  little  induce- 
ment to  embark  capital  in  a  doubtful  manufacturing  enterprise.  Coxe  wrote  and 
worked  earnestly  on  behalf  of  manufactures. 

The  value  of  the  manufactures  of  the  United  States  is  certainly 
greater  than  double  the  value  of  their  exports  in  native  commodities. 

The  value  of  the  manufactures  of  the  United  States  is  much  greater 
than  the  gross  value  of  all  their  imports,  including  the  value  of 
goods  exported  again. 

The  manufactures  of  the  United  States  consist  generally  of  articles 
of  comfort,  utility,  and  necessity.  Articles  of  luxury,  elegance,  and 
show,  are  not  manufactured  in  America,  excepting  a  few  kinds. 

The  manufactures  of  the  United  States  have  increased  very  rapidly 
since  the  commencement  of  the  revolutionary  war,  and  particularly 
in  the  last  five  years. 

Household  manufactures  are  carried  on  within  the  families  of 
almost  all  the  farmers  and  planters,  and  of  a  great  proportion  of  the 
inhabitants  of  the  villages  and  towns.  This  practice  is  increasing 
under  the  animating  influences  of  private  interest  and  public 
spirit.  .  .  . 

The  people  of  the  United  States  are  ingenious  in  the  invention, 

1  A  View  of  the  United  States  of  America.     By  Tench  Coxe  (Philadelphia,  1794), 
430,  440. 


INTRODUCTION  OF  MANUFACTURES  267 

and  prompt,  and  accurate  in  the  execution,  of  mechanism  and  work- 
manship, for  purposes  in  science,  arts,  manufactures,  navigation,  and 
agriculture.  Rittenhouse's  planetarium,  Franklin's  electrical  con- 
ductor, Godfrey's  quadrant  improved  by  Hadley,  Rumsey's  and  Fitch's 
steam-engines,  Leslie's  rod  pendulum  and  other  horological  inventions, 
the  construction  of  ships,  the  New-England  whale-boat,  the  construc- 
tion of  flour  mills,  the  wire-cutter  and  bender  for  card  makers,  Fol- 
som's  and  Brigg's  machinery  for  cutting  nails  out  of  rolled  iron,  the 
Philadelphia  dray  with  an  inclined  plane,  Mason's  engine  for  extin- 
guishing fire,  the  Connecticut  steeple  clock,  which  is  wound  up  by 
the  wind,  the  Franklin  fireplace,  the  Rittenhouse  stove,  Anderson's 
threshing  machine,  Rittenhouse's  instrument  for  taking  levels, 
Donaldson's  hippopotamos  and  balance  lock,  and  Wynkoop's  under- 
lators,  are  a  few  of  the  numerous  examples. 

H.   Decline  of  Manufactures,  1795 x 

The  decline  of  manufactures  a  few  years  after  the  publication  of  Hamilton's 
report,  for  the  reasons  already  cited,  is  evident  from  the  tone  of  Winterbotham's 
comment,  which  discusses  the  expediency  of  encouraging  them. 

We  now  come  to  the  subject  of  manufactures,  the  expediency  of 
encouraging  of  which  in  the  United  States,  was  not  long  since  deemed 
very  questionable,  but  the  advantages  of  which,  appear  at  this  time 
to  be  generally  admitted.  The  embarrassments  which  have  obstructed 
the  progress  of  their  external  trade  with  European  nations,  have  led 
them  to  serious  reflections  on  the  necessity  of  enlarging  the  sphere 
of  their  domestic  commerce;  the  restrictive  regulations  which  in 
foreign  markets  have  abridged  the  vent  of  the  increasing  surplus  of 
their  agricultural  produce,  have  served  to  beget  in  them  an  earnest 
desire,  that  a  more  extensive  demand  for  that  surplus  may  be  created 
at  home:  And  the  complete  success  which  has  rewarded  manufac- 
turing enterprise,  in  some  valuable  branches,  conspiring  with  the 
promising  symptoms  which  attend  some  less  mature  essays  in  others, 
justify  a  hope,  that  the  obstacles  to  the  growth  of  this  species  of 
industry  are  less  formidable  than  they  were  apprehended  to  be;  and 
that  it  is  not  difficult  to  find,  in  its  further  extension,  a  full  indemni- 
fication for  any  external  disadvantages,  which  are  or  may  be  experi- 
enced, as  well  as  an  accession  of  resources,  favourable  to  national 
independence  and  safety. 

1  An  Historical,  Geographical,  Commercial,  and  Philosophical  View  of  the  American 
United  Stales.  By  W.  Winterbotham  (London,  1795),  I>  293- 


268  READINGS  IN  ECONOMIC  HISTORY 

I.  Domestic  Manufactures  in  the  Back  Country,  1807  l 

In  those  sections  of  the  country  which,  by  reason  of  their  distance  from  a  market, 
were  unable  to  share  in  the  trade  with  Europe  and  receive  English  manufactures 
in  return  for  their  agricultural  staples,  domestic  manufactures  persisted.  In  fact 
there  was  very  little  change  in  the  back  districts  of  the  country  from  colonial 
conditions. 

While  agriculture  is  so  much  attended  to,  and  the  means  of  engag- 
ing in  it  so  easy,  it  is  not  surprising  that  few  direct  their  attention 
to  manufactures.  Some  years  ago  a  cotton  manufactory  was  es- 
tablished near  Statesborough  [South  Carolina]],  which  bid  fair  to 
rise  into  consideration.  It  was,  however,  soon  perceived  that  the 
price  of  labour  was  too  great  to  permit  its  goods  to  stand  any  compe- 
tition with  those  of  similar  qualities  imported  from  Great  Britain: 
consequently  the  proprietors  were  obliged  to  discontinue  their  opera- 
tions. A  numerous  population  and  scarcity  of  lands  must  first  be 
experienced  in  a  country  before  its  inhabitants  will  resort  to  manu- 
factures, while  a  more  eligible  mode  of  subsistence  exists.  In  the 
upper  country,  however,  necessity  has  obliged  the  inhabitants  to 
provide  for  their  respective  wants  from  their  own  resources,  in  conse- 
quence of  the  difficulty  and  expense  of  conveying  bulky  articles 
from  the  sea-coast  to  the  interior.  The  traveller  there  soon  becomes 
accustomed  to  the  humming  music  of  the  spinning-wheel  and  the 
loom.  Cottons  and  woollens  of  various  descriptions  are  made  in 
sufficient  quantities  for  domestic  use;  and  if  we  except  the  articles 
of  salt  and  sugar,  the  people  in  the  upper  parts  of  the  state  may  be 
considered  independent  of  foreign  support;  for  carpenters,  smiths, 
masons,  tanners,  shoemakers,  sadlers,  hatters,  millwrights,  and  other 
tradesmen,  are  conveniently  situated  throughout  the  country;  and 
the  materials  necessary  for  their  respective  professions  are  met  with 
in  abundance. 

II.   CONDITION  OF  THE  PEOPLE 
A.   American  Characteristics, 


The  characterizations  of  American  abilities  and  manners  during  this  formative 
period  are  as  varied  as  the  experiences  of  the  various  writers.  Brissot  was  charmed 
with  the  simplicity  of  morals  and  lack  of  poverty;  Michaux  comments  on  the 

1  Travels  through  Canada,  and  the  United  States  of  North  America,  in  the  Years 
7806,  1807,  6*  1808.     By  John  Lambert  (26.  edition,  London,  1814),  II,  211-2. 

2  America  and  her  Resources.     By  John  Bristed  (London,  1818),  431-7. 


INTRODUCTION  OF   MANUFACTURES  269 

prosperity  of  the  people,  while  Weld  complains  of  their  lack  of  manners.  Prob- 
ably there  was  truth  in  each  of  these  impressions.  Bristed  mingles  praise  and 
blame  in  a  fairly  impartial  manner. 

There  is  no  striking  difference  in  the  general  deportment  and 
appearance  of  the  great  body  of  Americans  in  the  towns,  from  Norfolk 
in  Virginia,  to  Madison  in  Indiana.  The  same  well-looking,  well- 
dressed,  tall,  stout  men,  appear  every  where  pretty  much  at  their 
ease,  shrewd  and  intelligent,  and  not  too  industrious.  When  asked 
why  they  do  not  employ  themselves?  they  answer,  "we  live  in  free- 
dom, we  need  not  work  like  the  English;"  as  if  idleness  itself  were 
not  the  worst  species  of  slavery.  In  the  country  are  to  be  found 
several  backwoodmen,  who  are  savage  and  fierce,  and  view  new  comers 
as  intruders.  They,  however,  must  quickly  yield  to  the  rapid  growth 
of  civilization.  The  great  body  of  the  western  settlers  are,  beyond 
all  comparison,  superior  to  the  European  farmers  and  peasantry  in 
manners  and  habits,  in  physical  capacity,  and  abundance,  and  above 
all,  in  intelligence  and  political  independence. 

The  activity  and  enterprise  of  the  Americans  far  exceed  those  of 
any  other  people.  Travellers  continually  are  setting  out  on  journeys 
of  two  or  three  thousand  miles,  by  boats,  on  horses,  or  on  foot,  with- 
out any  apparent  anxiety  or  deliberation.  Nearly  a  thousand  per- 
sons every  summer  pass  down  the  Ohio  as  traders  or  boatmen,  and 
return  on  foot;  a  distance  by  water  of  seventeen  hundred,  by  land, 
of  a  thousand  miles.  .  .  . 

Learning,  taste,  and  science,  of  course,  have  not  yet  made  much 
headway  in  the  west;  their  reading  is,  in  general,  confined  to  news- 
papers and  political  pamphlets,  a  little  history,  and  less  religion; 
but  their  intellects  are  keen,  vigorous,  and  active.  .  .  . 

The  high  wages  of  labour,  the  abundance  of  every  kind  of  manual 
and  mechanical  employment,  the  plenty  of  provisions,  the  vast 
quantity  and  low  price  of  land,  all  contribute  to  produce  a  healthy, 
strong,  and  vigorous  population.  Four-fifths  of  our  people  are  en- 
gaged in  agricultural  pursuits,  and  the  great  majority  of  these  are 
proprietors  of  the  soil  which  they  cultivate.  In  the  intervals  of  toil 
their  amusements  consist  chiefly  of  hunting  and  shooting,  in  the 
woods,  or  on  the  mountains;  whence  they  acquire  prodigious  muscular 
activity  and  strength.  .  .  . 

Thus  the  people  of  the  United  States  possess,  in  an  eminent  degree, 
the  physical  elements  of  national  greatness  and  strength.  Add  to 
these,  the  general  prevalence  of  elementary  instruction,  which  enables 
the  great  mass  of  the  people  to  develope  their  natural"  faculties  and 


270  READINGS  IN  ECONOMIC  HISTORY 

powers,  and  capacitates  them  for  undertaking  any  employment, 
success  in  which  depends  upon  shrewdness,  intelligence,  and  skill; 
whence  their  singular  ingenuity  in  mechanical  and  manual  operations, 
and  their  sound  understanding,  enterprise,  and  perseverance  in  the 
practical  concerns  of  life.  And  to  crown  all,  the  political  sover- 
eignty of  the  nation  residing  in  the  people,  gives  them  a  personal 
confidence,  self-possession,  and  elevation  of  character,  unknown  and 
unattainable  in  any  other  country,  and  under  any  other  form  of 
government;  and  which  renders  them  quick  to  perceive,  and  prompt 
to  resent  and  punish  any  insult  offered  to  individual  or  national 
honour.  Whence  in  the  occupations  of  peace,  and  the  achievements 
of  war,  the  Americans  average  a  greater  aggregate  of  effective  force, 
physical,  intellectual,  and  moral,  than  ever  has  been  exhibited  by  a 
given  number  of  any  other  people,  ancient  or  modern.  Individuals, 
in  other  countries,  may,  and  do  exhibit  as  much  bodily  activity  and 
strength,  as  much  intellectual  acuteness  and  vigour,  as  much  moral 
force  and  elevation,  as  can  be  shown  forth  by  any  American  indi- 
viduals; but  no  country  can  display  such  a  population,  in  mass,  as 
are  now  quickening  the  United  States  with  their  prolific  energy,  and 
ripening  fast  into  a  substance  of  power,  every  movement  of  which  will 
soon  be  felt  in  its  vibrations  to  the  remotest  corners  of  the  earth.  .  .  . 

There  are,  however,  drawbacks  upon  the  high  elements  of  national 
greatness  above  enumerated,  to  be  found  in  some  of  our  political 
and  social  institutions.  For  example,  slavery  demoralizes  the  southern, 
and  those  of  the  western  states,  which  have  adopted  this  execrable 
system.  Lotteries  pervade  the  middle,  southern,  and  western  states, 
and  spread  a  horribly  increasing  mass  of  idleness,  fraud,  theft,  false- 
hood, and  profligacy  throughout  all  the  classes  of  our  labouring 
population.  .  .  .  Our  favourite  scheme  of  substituting  a  state  prison 
for  the  gallows  is  a  most  prolific  mother  of  crime.  During  the  severity 
of  the  winter  season,  its  lodgings  and  accommodations  are  better 
than  those  of  many  of  our  paupers,  who  are  thereby  incited  to  crime 
in  order  to  mend  their  condition.  And  the  pernicious  custom  of 
pardoning  the  most  atrocious  criminals,  after  a  short  residence  in 
the  state-prison,  is  continually  augmenting  our  flying  squadrons  of 
murderers,  house-breakers,  foot-pads,  forgers,  highway  robbers,  and 
swindlers  of  all  sorts.  .  .  . 

Our  state  insolvent  laws,  likewise  (for  we  are  too  patriotic  to  per- 
mit Congress  to  pass  an  uniform  bankrupt  law,  that  might  compel 
our  merchants  to  pay  their  foreign  creditors),  acts  as  a  perpetual 
bounty  for  dishonesty  and  fraud.  .  .  . 


INTRODUCTION  OF   MANUFACTURES  271 

The  poor-law  system,  as  an  awful  encouragement  to  pauperism 
and  profligacy,  requires  no  further  comment.  With  the  exception 
of  forgery,  in  the  ingenuity  and  audacity  of  which  our  native  Americans 
far  surpass  all  other  people,  and  for  which  our  state-prisons  do  not 
afford  even  a  palliative,  much  less  a  remedy,  the  foreigners  and  free 
blacks  are  the  most  numerous  and  atrocious  of  our  criminals.  .  .  . 

The  prevailing  vice  throughout  the  Union,  excepting  New-England, 
is  immoderate  drinking;  encouraged  doubtless  by  the  relaxing  heats  of 
the  climate,  in  the  southern,  middle,  and  western  states,  by  the  high 
wages  of  labour,  and  by  the  absence  of  all  restriction,  in  the  shape 
of  excise,  or  internal  duty.  Not  only  our  labourers  generally,  but  too 
many  of  our  farmers,  merchants,  and  other  classes  of  the  community, 
are  prone  to  a  pernicious  indulgence  in  spirituous  liquors. 


B.   Wages  and  Cost  of  Living,  1802  l 

As  Michaux  shows  here,  not  merely  were  money  or  nominal  wages  high,  but 
real  wages,  or  wages  measured  by  the  commodities  which  could  be  purchased  with 
them,  were  even  higher.  Under  these  circumstances  the  position  of  the  laborer 
was  a  fortunate  one,  and  his  standard  of  living  was  high. 

The  articles  manufactured  at  Lexinton  are  very  passable,  and  the 
speculators  are  ever  said  to  make  rapid  fortunes,  notwithstanding  the 
extreme  scarcity  of  hands.  This  scarcity  proceeds  from  the  inhabi- 
tants giving  so  decided  a  preference  to  agriculture,  that  there  are  very 
few  of  them  who  put  their  children  to  any  trade,  wanting  their  serv- 
ices in  the  field.  The  following  comparison  will  more  clearly  prove 
this  scarcity  of  artificers  in  the  western  states:  At  Charleston  in 
Carolina,  and  at  Savannah  in  Georgia,  a  cabinet-maker,  carpenter, 
mason,  tinman,  tailor,  shoemaker,  &c.  earns  two  piastres  [dollars] 
a  day,  and  cannot  live  for  less  than  six  per  week;  at  New  York  and 
Philadelphia  he  has  but  one  piastre,  and  it  costs  him  four  per  week. 
At  Marietta,  Lexinton,  and  Nasheville,  in  Tenessea,  these  workmen 
earn  from  one  piastre  to  one  and  a  half  a  day,  and  can  subsist  a  week 
with  the  produce  of  one  day's  labour.  Another  example  may  tend 
to  give  an  idea  of  the  low  price  of  provisions  in  the  western  states. 
The  boarding  house,  where  I  lived  during  my  stay  at  Lexinton  passes 
for  one  of  the  best  in  the  town,  and  we  were  profusely  served  at  the 
rate  of  two  piastres  per  week.  I  am  informed  that  living  is  equally 

1  Travels  to  the   Westward  of  the  Allegany  Mountains.     By  F.  A.  Michaux 
(London,  1805),  I24~5- 


272  READINGS  IN  ECONOMIC  HISTORY 

cheap  in  the  states  of  New  England,  which  comprise  Connecticut, 
Massachusetts,  and  New  Hampshire;  but  the  price  of  labour  is  not  so 
high,  and  therefore  more  proportionate  to  the  price  of  provisions. 

C.    Unwholesome  Dietary,  IJQJ  l 

Travelers  in  the  United  States  during  this  period  are  almost  unanimous  in  their 
descriptions  of  the  bountiful  yet  heavy  diet  spread  on  the  typical  American  table, 
especially  of  the  hot  breads  and  salt  meats,  to  the  consumption  of  which  they 
attributed  various  ills,  from  whooping  cough  to  premature  loss  of  teeth.  Volney 
was  a  Frenchman  who  traveled  in  this  country  between  1 795  and  1 798. 

I  will  venture  to  say  that,  if  a  prize  were  proposed  for  the  scheme 
of  a  regimen  most  calculated  to  injure  the  stomach,  the  teeth,  and  the 
health  in  general,  no  better  could  be  invented  than  that  of  the 
Americans.  In  the  morning  at  breakfast,  they  deluge  their  stomach 
with  a  quart  of  hot  water,  impregnated  with  tea,  or  so  slightly  with 
coffee,  that  it  is  mere  coloured  water:  and  they  swallow,  almost  with- 
out chewing,  hot  bread,  half  baked,  toast  soaked  in  butter,  cheese  of 
the  fattest  kind,  slices  of  salt  or  hung  beef,  ham,  &c.,  all  which  are 
nearly  insoluble.  At  dinner  they  have  boiled  pastes  under  the  name 
of  puddings,  and  the  fattest  are  esteemed  the  most  delicious:  all  their 
sauces,  even  for  roast  beef,  are  melted  butter:  their  turnips  and 
potatoes  swim  in  hog's  lard,  butter,  or  fat:  under  the  name  of  pie,  or 
pumpkin,  their  pastry  is  nothing  but  a  greasy  paste,  never  sufficiently 
baked:  to  digest  these  viscous  substances,  they  take  tea  almost 
instantly  after  dinner,  making  it  so  strong,  that  it  is  absolutely 
bitter  to  the  taste;  in  which  state  it  affects  the  nerves  so  powerfully, 
that  even  the  English  find  it  brings  on  a  more  obstinate  restlessness 
than  coffee.  Supper  again  introduces  salt  meats,  or  oysters:  as 
Chatelux  says,  the  whole  day  passes  in  heaping  indigestions  on  one 
another:  and  to  give  tone  to  the  poor  relaxed  and  wearied  stomach, 
they  drink  Madeira,  rum,  French  brandy,  gin,  or  malt  spirits,  which 
complete  the  ruin  of  the  nervous  system. 

D.   Intemperance,  1802  2 

The  consumption  of  liquors  was  universal  at  the  beginning  of  the  nineteenth 
century,  and  even  their  intemperate  use  was  regarded  with  a  degree  of  tolerance 
that  would  strike  us  as  strange  today.  Michaux  was  a  very  careful  and  trust- 
worthy observer. 

1  View  of  the  Climate  and  Soil  of  the  United  States  of  America.     By  C.  F.  Volney 
(London,  1804),  323-5. 

2  Travels  to  the  Westward  of  the  Alkgany  Mountains.     By  F.  A.  Michaux  (Lon- 
don, 1805),  40. 


INTRODUCTION  OF  MANUFACTURES  273 

...  A  passion  for  spirituous  liquors  is  one  of  the  features  that 
characterise  the  country  people  belonging  to  the  interior  of  the  United 
States.  This  passion  is  so  strong,  that  they  desert  their  homes  every 
now  and  then  to  get  drunk  in  public  houses;  in  fact,  I  do  not  con- 
ceive that  there  are  ten  out  of  a  hundred  who  have  resolution  enough 
to  desist  from  it  a  moment  provided  they  had  it  by  them,  notwith- 
standing their  usual  beverage  in  summer  is  nothing  but  water,  or 
sour  milk.  They  care  very  little  for  cyder,  which  they  find  too  weak. 
Their  dislike  to  this  wholesome  and  pleasant  beverage  is  the  more 
distressing  as  they  might  easily  procure  it  at  a  very  trifling  expense, 
for  apple  trees  of  every  kind  grow  to  wonderful  perfection  in  this 
country. 

E.   Education,  1816  l 

The  grant  of  public  lands  in  support  of  the  common  schools  insured  the  develop- 
ment of  educational  opportunities  for  the  mass  of  the  people.  Even  at  this  early 
period,  when  the  public-school  system  was  as  yet  undeveloped,  a  firm  foundation 
was  being  laid.  Warden  was  at  one  time  consul  for  the  United  States  at  Paris. 

The  education  of  youth,  which  is  so  essential  to  the  well-being  of 
society,  and  to  the  development  of  national  wealth,  has  always  been 
a  primary  object  of  public  attention,  in  the  United  States.  Since 
the  year  1800,  especially,  great  additions  have  been  made  to  the 
number  of  schools  and  academical  institutions;  to  the  funds  for  sup- 
porting them,  and  to  all  the  means  for  providing  instruction,  and 
disseminating  information.  In  1809  the  number  of  colleges  had  in- 
creased to  twenty-five,  that  of  academies  to  seventy-four.  Those 
institutions  are  incorporated  by  the  legislature  of  each  state,  and  are 
subject  to  its  inspection,  though  placed  respectively  under  the  direc- 
tion of  boards  of  trustees.  .  .  . 

In  the  western  states  congress  have  reserved  640  acres  of  the 
public  land  in  each  township  for  the  support  of  schools,  besides  seven 
entire  townships  of  23,040  acres  each,  two  of  which  are  situated  in 
the  state  of  Ohio,  and  one  in  each  of  the  states  and  territories  of 
Michigan,  Indiana,  Illinois,  Mississippi,  and  Louisiana.  In  the  state 
of  New  York  in  1811,  the  fund  for  common  schools,  subject  to  the 
disposal  of  the  legislature,  amounted  to  half  a  million  of  dollars, 
giving  an  annual  revenue  of  36,000  dollars.  .  .  .  Throughout  the 
New  England  states  the  schools  are  supported  by  a  public  tax,  and 
are  under  the  direction  of  a  committee.  In  these  seminaries  the  poor 

1  A  Statistical,  Political,  and  Historical  Account  of  the  United  States  of  North 
America.     By  D.  B.  Warden  (Edinburgh,  1819),  III,  453-8,  passim. 


274 


READINGS  IN  ECONOMIC  HISTORY 


and  the  rich  are  educated  together,  and  are  taught  reading,  writing, 
arithmetic,  grammar,  and  geography.  In  other  parts  of  the  Union 
also,  schools  are  provided  for  the  education  of  the  poorer  class.  The 
system  of  Lancaster  has  been  lately  adopted  in  different  places. 
Various  societies  have  been  lately  established,  for  the  advancement 
of  knowledge;  particularly  of  those  branches  which  are  connected 
with  agriculture,  arts,  and  manufactures.  .  .  . 

The  newspaper  press  is  the  great  organ  of  communication  in  Amer- 
ica. In  this  description  of  literature,  the  United  States  are  entitled 
to  take  precedence  of  all  other  countries,  at  least  so  far  as  relates  to 
number.  In  the  beginning  of  the  year  1810  there  were  364  newspapers 
in  the  United  States,  25  of  which  were  printed  daily,  16  thrice  a-week, 
33  twice,  and  262  weekly.1  Before  the  American  revolution  there 
were  but  nine  newspapers  in  the  United  States. 


F.  Post-offices  and  Rates,  1791-1816 2 

The  educational  value  of  the  post  office  was  early  recognized,  and  the  postal 
system  was  inaugurated  in  1775,  and  greatly  extended  after  1789.  The  principle 
of  a  flat  rate  for  all  letters  irrespective  of  distance  or  weight  was  not  introduced 
until  1850. 

By  the  Constitution,  Congress  have  power  to  establish  post- 
offices  and  post-roads:  and  soon  after  the  commencement  of  the 
Government,  laws  were  passed,  to  carry  this  power  into  effect. 

The  benefits  arising  from  the  post-office  establishment,  to  indi- 
viduals are  immense,  and  in  some  years,  the  public  have  derived  no 
inconsiderable  revenue  from  this  source.  .  .  . 

From  this  will  be  seen  the  increase  of  the  establishment  at  the 
following  periods  — 


Year 

No.  of  post- 
offices 

Net  revenue 
Dolls.  Cts. 

Extent  in  miles 
of  post-roads 

I7OI 

89 

9,637     29 

1,905 

1801         

1,025 

65,291     84 

22,309 

1811    

2,403 

88,148     51 

37,035 

1816  

3,260 

156,579 

48,976 

1  There  are  8  in  German,  5  in  French,  and  2  in  Spanish. 

2  Statistical  Annals  .  .  .  of  the  United  States.     By  Adam  Seybert   (Philadel- 
phia, 1818),  372-3- 


INTRODUCTION  OF  MANUFACTURES  275 

Rates  of  Postage  established  in  i8i6,1  viz.: 

For  every  letter  composed  of  a  single  sheet  of  paper,  conveyed  not  ex- 
ceeding 30  miles 6    cents 

•     Do.  over  30  and  not  exceeding    80  miles 10     do. 

Do.          80  do.  150    do i2\   do. 

Do.         150  do.  400    do 183    do. 

Do.  over  400  miles 25      do. 

For  every  double  letter,  or  letter  composed  of  two  pieces  of  paper, 
double  those  rates ;  and  for  every  triple  letter,  or  one  composed  of  three 
pieces  of  paper,  triple  those  rates;  and  for  every  packet  composed  of 
four  or  more  pieces  of  paper,  or  one  or  more  other  articles,  and 
weighing  one  ounce  avoirdupois,  quadruple  those  rates,  and  in  that 
proportion  for  all  greater  weights;  provided  that  no  packet  of 
letters  conveyed  by  the  water-mails,  shall  be  charged  with  more  than 
quadruple  postage,  unless  the  same  shall  contain  more  than  four 
distinct  letters. 


Act  gth  April,  1816. 


CHAPTER  IX 
THE  DEVELOPMENT  OF  MANUFACTURES,   1800-1860 

I.   GENERAL  VIEW  or  MANUFACTURES,  1810-1860 
A.  Gallatin's  Report  on  Manufactures,  1810  l 

In  1806  and  1807,  both  Great  Britain  and  France  had  restricted  American 
commerce,  the  former  by  Orders  in  Council,  the  latter  by  the  Berlin  and  Milan 
Decrees.  The  United  States  had  retaliated  in  1807  with  the  Embargo  Act, 
which  prohibited  the  vessels  of  this  country  trading  with  either  Great  Britain 
or  France.  Naturally  much  of  the  capital  previously  invested  in  shipping 
found  its  way  into  manufactures.  Pursuant  to  a  request  of  Congress,  Albert 
Gallatin,  secretary  of  the  treasury,  reported  in  April,  1810,  on  the  state  of 
manufactures  in  the  United  States.  The  more  important  parts  of  this  report 
are: 

The  following  manufactures  are  carried  on  to  an  extent  which 
may  be  considered  adequate  to  the  consumption  of  the  United  States, 
the  foreign  articles  annually  imported  being  less  in  value  than  those 
of  American  manufacture  belonging  to  the  same  general  class,  which 
are  annually  exported,  viz.: 

Manufactures  of  wood,   or  of  which  Flaxseed  oil. 

wood  is  the  principal  material.  Refined  sugar. 

Leather,  and  manufactures  of  leather.  Coarse  earthen  ware. 

Soap,  and  tallow  candles.  Snuff,    chocolate,    hair    powder,    and 
Spermaceti  oil  and  candles.  mustard. 

The  following  branches  are  firmly  established,  supplying,  in  sev- 
eral instances,  the  greater,  and,  in  all,  a  considerable,  part  of  the 
consumption  of  the  United  States,  viz.: 

Iron,  and  the  manufactures  of  iron.  Gunpowder. 

Manufactures  of  cotton,  wool,  and  flax.  Window  glass. 

Hats.  Jewelry  and  clocks. 

Paper,  printing  types,  printed  books,  Several  manufactures  of  lead. 

playing  cards.  Straw  bonnets  and  hats. 

Spirituous  and  malt  liquors.  Wax  candles. 
Several  manufactures  of  hemp. 


1  Gallatin's  Report  on  Manufactures,  1810.     American  State  Papers  (Washing- 
ton, 1834),  Series  Finance,  II,  425-7. 


THE  DEVELOPMENT  OF   MANUFACTURES  277 

Progress  has  also  been  made  in  the  following  branches,  viz.: 
Paints  and  colors,  several  chemical  preparations  and  medicinal 
drugs,  salt,  manufactures  of  copper  and  brass,  japanned  and  plated 
ware,  calico  printing,  queens  and  other  earthen  and  glass  wares,  &c. . . . 

LEATHER,   AND   MANUFACTURES   OF   LEATHER 

Tanneries  are  established  in  every  part  of  the  United  States, 
some  of  them  on  a  very  large  scale  —  the  capital  employed  in  a  single 
establishment  amounting  to  one  hundred  thousand  dollars.  A  few 
hides  are  exported,  and  it  is  stated  that  one-third  of  those  used  in 
the  great  tanneries  of  the  Atlantic  States  are  imported  from  Spanish 
America.  Some  superior  or  particular  kinds  of  English  leather  and 
morocco  are  still  imported;  but  about  350,000  pounds  of  American 
leather  are  annually  exported.  The  bark  is  abundant  and  cheap; 
and  it  seems,  .  .  .  that  hides  cost,  in  America,  5!  cents,  and  in 
England,  seven  cents  a  pound;  that  the  bark  used  for  tanning,  costs, 
in  England,  nearly  as  much  as  the  hides,  and  in  America  not  one- 
tenth  part  of  that  sum.  It  is,  at  the  same  time,  acknowledged, 
that  much  American  leather  is  brought  to  market,  of  an  inferior 
quality,  and  that  better  is  generally  made  in  the  middle  than  in  the 
Northern  or  Southern  States.  The  tanneries  of  the  State  of  Dela- 
ware employ,  collectively,  a  capital  of  one  hundred  and  twenty 
thousand  dollars,  and  ninety  workmen,  and  make,  annually,  one 
hundred  thousand  dollars'  worth  of  leather.  Those  of  Baltimore 
amount  to  twenty-two,  seventeen  of  which  have,  together,  a  capital 
of  187,000  dollars,  and  tan,  annually,  19,000  hides,  and  25,000  calf 
skins. 

Morocco  is  also  made  in  several  places,  partly  from  imported 
goat  skins,  and  principally  from  sheep  skins.  And  it  may  be  proper 
here  to  add,  that  deer  skins,  which  form  an  article  of  exportation,  are 
dressed  and  manufactured  in  the  United  States,  to  the  amount 
required  for  the  consumption  of  the  country. 

The  principal  manufactures  of  leather  are  those  of  shoes  and  boots, 
harness  and  saddles.  Some  inconsiderable  quantities  of  the  two  last 
articles  are  both  imported  and  exported.  The  annual  importation 
of  foreign  boots  and  shoes,  amounts  to  3,250  pair  boots  and  59,000 
pair  of  shoes,  principally  kid  and  morocco.  The  annual  exportation 
of  the  same  articles,  of  American  manufacture,  to  8,500  pair  of  boots 
and  127,000  pair  of  shoes.  The  shoe  manufactures  of  New  Jersey 
are  extensive.  That  of  Lynn,  in  Massachusetts,  makes  100,000  pair 
of  women's  shoes  annually. 


278  READINGS  IN  ECONOMIC  HISTORY 

The  value  of  all  the  articles  annually  manufactured  in  the  United 
States,  which  are  embraced  under  this  head,  (leather)  may  be  esti- 
mated at  twenty  millions  of  dollars.  .  .  . 

COTTON,   WOOL,   AND   FLAX 

I.   Spinning  Mills  and  Manufacturing  Establishments. 

Returns  have  been  received  of  eighty-seven  mills,  which  were 
erected  at  the  end  of  the  year  1809;  sixty-two  of  which  (forty- 
eight,  water,  and  fourteen,  horse,  mills)  were  in  operation,  and  worked, 
at  that  time,  thirty-one  thousand  spindles.  The  other  twenty  five 
will  all  be  in  operation  in  the  course  of  this  year,  and,  together  with 
the  former  ones,  (almost  all  of  which  are  increasing  their  machinery) 
will,  by  the  estimate  received,  work  more  than  eighty  thousand 
spindles  at  the  commencement  of  the  year  1811. 

The  capital  required  to  carry  on  the  manufacture,  on  the  best 
terms,  is  estimated  at  the  rate  of  one  hundred  dollars  for  each  spindle; 
including  both  the  fixed  capital  applied  to  the  purchase  of  the  mill- 
seats,  and  to  the  construction  of  the  mills  and  machinery,  and  that 
employed  in  wages,  repairs,  raw  materials,  goods  on  hand,  and  con- 
tingencies. But  it  is  believed  that  no  more  than  at  the  rate  of  sixty 
dollars  for  each  spindle  is  generally  actually  employed.  Forty-five 
pounds  of  cotton,  worth  about  20  cents  a  pound,  are,  on  an  average, 
annually  used  for  each  spindle;  and  these  produce  about  thirty-six 
pounds  of  yarn,  of  different  qualities,  worth,  on  an  average,  one  dol- 
lar and  twelve  and  a  half  cents  a  pound.  Eight  hundred  spindles 
employ  forty  persons,  viz.:  five  men  and  thirty -five  women  and 
children.  .  .  . 

Some  of  the  mills,  above  mentioned,  are  also  employed  in  carding 
and  spinning  wool,  though  not  to  a  considerable  amount.  But 
almost  the  whole  of  that  material  is  spun  and  wove  in  private  families; 
and  there  are  yet  but  few  establishments  for  the  manufacture  of 
woollen  cloths.  Some  information  has,  however,  been  received, 
respecting  fourteen  of  these,  .  .  .  manufacturing,  each,  on  an 
average,  ten  thousand  yards  of  cloth  a  year,  worth  from  one  to  ten 
dollars  a  yard.  It  is  believed  that  there  are  others,  from  which  no 
information  has  been  obtained;  and  it  is  known  that  several  estab- 
lishments, on  a  smaller  scale,  exist  in  Philadelphia,  Baltimore,  and 
some  other  places.  All  those  cloths,  as  well  as  those  manufactured 
in  private  families,  are  generally  superior  in  quality,  though  some- 
what inferior  in  appearance,  to  imported  cloths  of  the  same  price. 
The  principal  obstacle  to  the  extension  of  the  manufacture  is  the 


THE  DEVELOPMENT  OF  MANUFACTURES  279 

want  of  wool,  which  is  still  deficient,  both  in  quality  and  quantity. 
But  those  defects  are  daily  and  rapidly  lessened,  by  the  introduction 
of  sheep  of  the  merino  and  other  superior  breeds;  by  the  great  de- 
mand for  the  article;  and  by  the  attention  now  every  where  paid  by 
farmers  to  the  increase  and  improvement  of  their  flocks. 

Manufacturing  establishments,  for  spinning  and  weaving  flax, 
are  yet  but  few.  In  the  State  of  New  York,  there  is  one,  which  em- 
ploys a  capital  of  18,000  dollars,  and  twenty-six  persons,  and  in  which 
about  ninety  thousand  pounds  of  flax  are  annually  spun  and  wove, 
into  canvass  and  other  coarse  linen.  Information  has  been  received 
respecting  two,  in  the  vicinity  of  Philadelphia,  one  of  which  produces, 
annually,  72,000  yards  of  canvass,  made  of  flax  and  cotton;  in  the 
other,  the  flax  is  both  hackled  and  spun  by  machinery;  thirty  looms 
are  employed;  and  it  is  said  that  500,000  yards  of  cotton  bagging, 
sail  cloth,  and  coarse  linen,  may  be  made  annually.  .  .  . 

II.    Household  Manufactures 

But  by  far  the  greater  part  of  the  goods  made  of  those  materials, 
(cotton,  flax,  and  wool,)  are  manufactured  in  private  families,  mostly 
for  their  own  use,  and  partly  for  sale.  They  consist  principally  of 
coarse  cloth,  flannel,  cotton  stuffs,  and  stripes  of  every  description, 
linen,  and  mixtures  of  wool  with  flax  or  cotton.  The  information 
received  from  every  State,  and  from  more  than  sixty  different  places, 
concurs  in  establishing  the  fact  of  an  extraordinary  increase,  during 
the  two  last  years,  and  in  rendering  it  probable  that  about  two- 
thirds  of  the  clothing,  including  hosiery,  and  of  the  house  and  table 
linen,  worn  and  used  by  the  inhabitant  of  the  United  States,  who  do 
not  reside  in  cities,  is  the  product  of  family  manufactures. 

In  the  Eastern  and  Middle  States,  carding  machines,  worked  by 
water,  are  every  where  established,  and  they  are  rapidly  extending 
southwardly  and  westwardly.  Jennies,  other  family  spinning  ma- 
chines, and  flying  shuttles,  are  also  introduced  in  many  places;  and 
as  many  fulling  mills  are  erected  as  are  required  for  finishing  all  the 
cloth  which  is  woven  in  private  families.  .  .  . 

IRON,   AND   MANUFACTURES   OF  IRON 

The  information  received  respecting  that  important  branch  is 
very  imperfect.  It  is,  however,  well  known,  that  iron  ore  abounds, 
and  that  numerous  furnaces  and  forges  are  erected,  throughout  the 
United  States.  They  supply  a  sufficient  quantity  of  hollow  ware, 
and  of  castings,  of  every  description;  but  about  4,500  tons  of  bar 


28o  READINGS  IN  ECONOMIC  HISTORY 

iron  are  annually  imported  from  Russia,  and  probably,  an  equal 
quantity  from  Sweden  and  England  together.  A  vague  estimate 
states  the  amount  of  bar  iron  annually  used  in  the  United  States,  at 
fifty  thousand  tons,  which  would  leave  about  forty  thousand  for  that 
of  American  manufacture.  Although  a  great  proportion  of  the  ore 
found  in  Vermont,  Pennsylvania,  Maryland,  and  Virginia,  be  of  a 
superior  quality,  and  some  of  the  iron  manufactured  there,  equal  to 
any  imported,  it  is  to  be  regretted,  that,  from  the  demand,  and  from 
want  of  proper  attention  in  the  manufacture,  much  inferior  American 
iron  is  brought  to  market.  On  that  account,  the  want  of  the  ordinary 
supply  of  Russian  iron  has  been  felt  in  some  of  the  slitting  and  rolling 
mills.  But,  whilst  a  reduction  of  the  duty  on  Russian  iron  is  asked 
from  several  quarters,  it  is  generally  stated  that  a  high  or  prohibi- 
tory duty  on  English  bar,  slit,  rolled,  and  sheet  iron,  would  be  bene- 
ficial; that  which  is  usually  imported  on  account  of  its  cheapness, 
being  made  with  pit  coal,  and  of  a  very  inferior  quality. 

The  annual  importations  of  sheet,  slit,  and  hoop  iron,  amount  to 
five  hundred  and  sixty-five  tons;  and  the  quantity  rolled  and  slit  in 
the  United  States,  is  estimated  at  seven  thousand  tons.  In  the 
State  of  Massachusetts  alone,  are  found  thirteen  rolling  and  slitting 
mills,  in  which  about  3,500  tons  of  bar  iron,  principally  from  Russia, 
are  annually  rolled  or  slit.  A  portion  is  used  for  sheet  iron  and  nail 
rods  for  wrought  nails;  but  two- thirds  of  the  whole  quantity  of  bar 
iron  flattened  by  machinery  in  the  United  States,  is  used  in  the 
manufacture  of  cut  nails,  which  has  now  extended  throughout  the 
whole  country,  and,  being  altogether  an  American  invention,  sub- 
stituting machinery  to  manual  labor,  deserves  particular  notice.  .  .  . 
[T]he  annual  product  of  that  branch  alone,  may  be  estimated  at  twelve 
hundred  thousand  dollars,  and  that,  exclusively  of  the  saving  of  fuel, 
the  expense  of  manufacturing  cut  nails,  is  not  one-third  part  of  that 
of  forging  wrought  nails.  About  two  hundred  and  eighty  tons  are 
already  annually  exported,  but  the  United  States  continue  to  import, 
annually,  more  than  fifteen  hundred  tons  of  wrrought  nails  and  spikes. 
An  increase  of  duty  on  these,  and  a  drawback  on  the  exportation  of 
the  cut  nails  is  generally  asked  for. 

A  considerable  quantity  of  blistered,  and  some  refined  steel,  are 
made  in  America;  but  the  foreign  importations  exceed  11,000  cwt. 
a  year. 

The  manufactures  of  iron  consist  principally  of  agricultural 
implements,  and  of  all  the  usual  work  performed  by  common 
blacksmiths.  To  these  may  be  added  anchors,  shovels,  and  spades, 


THE  DEVELOPMENT  OF  MANUFACTURES  281 

axes,  scythes,  and  other  edge  tools,  saws,  bits,  and  stirrups,  and  a 
great  variety  of  the  coarser  articles  of  ironmongery;  but  cutlery, 
and  all  the  finer  species  of  hardware,  and  of  steel  work,  are  almost 
altogether  imported  from  Great  Britain.  Balls,  shells,  and  cannon, 
of  small  caliber,  are  cast  in  several  places;  and  three  foundries  for 
casting  solid,  those  of  the  largest  caliber,  together  with  the  proper 
machinery  for  boring  and  finishing  them,  are  established  at  Cecil 
county,  Maryland,  near  the  city  of  Washington,  and  at  Richmond, 
in  Virginia;  each  of  the  two  last  may  cast  300  pieces  of  artillery  a  year, 
and  a  great  number  of  iron  and  brass  cannon  are  made  at  that,  near 
the  seat  of  Government.  Those  of  Philadelphia  and  near  the  Hudson 
river,  are  not  now  employed.  It  may  be  here  added,  that  there  are 
several  iron  foundries  for  casting  every  species  of  work  wanted  for 
machinery,  and  that  steam  engines  are  made  at  that  of  Philadelphia. 

At  the  two  public  armories  of  Springfield  and  Harper's  ferry, 
19,000  muskets  are  annually  made.  About  20,000  more  are  made  at 
several  factories,  of  which  the  most  perfect  is  said  to  be  that  near 
New  Haven,  and  which,  with  the  exception  of  that  erected  at  Rich- 
mond by  the  State  of  Virginia,  are  all  private  establishments.  These 
may,  if  wanted,  be  immediately  enlarged,  and  do  not  include  a  number 
of  gunsmiths  employed  in  making  rifles,  and  several  other  species 
of  arms.  Swords  and  pistols  are  also  manufactured  in  several  places. 

Although  it  is  not  practicable  to  make  a  correct  statement  of  the 
value  of  all  the  iron  and  manufactures  of  iron,  annually  made  in  the 
United  States,  it  is  believed  to  be  from  twelve  to  fifteen  millions  of 
dollars.  The  annual  importations  from  all  foreign  countries,  includ- 
ing bar  iron,  and  every  description  of  manufactures  of  iron  or  steel, 
are  estimated  at  near  four  millions  of  dollars.  .  .  . 

From  that  imperfect  sketch  of  American  manufactures,  it  may, 
with  certainty,  be  inferred  that  their  annual  produce  exceeds  one 
hundred  and  twenty  millions  of  dollars.  And  it  is  not  improbable 
that  the  raw  materials  used,  and  the  provisions  and  other  articles 
consumed,  by  the  manufacturers,  create  a  home  market  for  agri- 
cultural products  not  very  inferior  to  that  which  arises  from  foreign 
demand.  A  result  more  favorable  than  might  have  been  expected 
from  a  view  of  the  natural  causes  which  impede  the  introduction, 
and  retard  the  progress  of  manufactures  in  the  United  States. 

The  most  prominent  of  those  causes  are  the  abundance  of  land 
compared  with  the  population,  the  high  price  of  labor,  and  the  want 
of  a  sufficient  capital.  The  superior  attractions  of  agricultural  pur- 
suits, the  great  extension  of  American  commerce  during  the  late 


282  READINGS  IN  ECONOMIC  HISTORY 

European  wars,  and  the  continuance  of  habits  after  the  causes  which 
produced  them  have  ceased  to  exist,  may  also  be  enumerated.  Sev- 
eral of  those  obstacles  have,  however,  been  removed  or  lessened. 
The  cheapness  of  provisions  had  always,  to  a  certain  extent,  counter- 
balanced the  high  price  of  manual  labor;  and  this  is  now,  in  many 
important  branches,  nearly  superseded  by  the  introduction  of  ma- 
chinery; a  great  American  capital  has  been  acquired  during  the  last 
twenty  years;  and  the  injurious  violations  of  the  neutral  commerce 
of  the  United  States,  by  forcing  industry  and  capital  into  other  chan- 
nels, have  broken  inveterate  habits,  and  given  a  general  impulse,  to 
which  must  be  ascribed  the  great  increase  of  manufactures  during 
the  two  last  years. 

B.   Leading  Manufactures  in  1840  l 

In  1840  the  leading  manufactures  were  of  cottons,  woolens  and  machinery. 
The  table  on  the  opposite  page  shows  the  extent  of  the  manufactures  of  these 
commodities  for  the  various  states. 


C.    View  of  Manufactures  in  1860  2 

By  1860  the  manufactures  of  the  United  States  employed  over  1,250,000 
persons,  and  turned  out  products  to  the  value  of  approximately  two  billion  dollars. 
According  to  the  census  of  that  year  the  condition  of  the  leading  manufacturing 
industries  was  as  follows: 

PRODUCTS   OF   INDUSTRY 

The  returns  of  MANUFACTURES  exhibit  a  most  gratifying  in- 
crease, and  present  at  the  same  time  an  imposing  view  of  the  magni- 
tude to  which  this  branch  of  the  national  industry  has  attained 
within  the  last  decennium. 

The  total  value  of  domestic  manufactures,  (including  fisheries 
and  the  products  of  the  mines,)  according  to  the  Census  of  1850, 
was  $1,019,106,616.  The  product  of  the  same  branches  for  the  year 
ending  June  i,  1860,  as  already  ascertained  in  part  and  carefully 
estimated  for  the  remainder,  will  reach  an  aggregate  value  of  nine- 
teen hundred  millions  of  dollars  (1,900,000,000).  This  result  exhibits 
an  increase  of  more  than  eighty-six  (86)  per  centum  in  ten  years!  The 
growth  of  this  branch  of  American  labor  appears,  therefore,  to  have 
been  in  much  greater  ratio  than  that  of  the  population.  Its  increase 
has  been  1 23  per  cent,  greater  than  that  even  of  the  white  population 

1  Adapted  from  the  Sixth  Census,  1840. 

2  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  59-69. 


THE  DEVELOPMENT  OF  MANUFACTURES 


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284  READINGS  IN  ECONOMIC  HISTORY 

by  which  it  was  principally  produced.  Assuming  the  total  value  of 
manufactures  in  1860  to  have  been  as  already  stated,  the  product 
per  capita  was  in  the  proportion  of  sixty  dollars  and  sixty-one  hun- 
dredths  ($60  61)  for  every  man,  woman,  and  child  in  the  Union.  If 
to  this  amount  were  added  the  very  large  aggregate  of  mechanical 
productions  below  the  annual  value  of  five  hundred  dollars  —  of 
which  no  official  cognizance  is  taken  —  the  result  would  be  one  of 
startling  magnitude. 

The  production  of  the  immense  aggregate  above  stated  gave 
employment  to  about  1,100,000  men  and  285,000  women,  or  one 
million  and  three  hundred  and  eighty-five  thousand  persons.  Each 
of  these,  on  an  average,  maintained  two  and  a  half  other  individuals, 
making  the  whole  number  of  persons  supported  by  manufactures  four 
millions  eight  hundred  and  forty-seven  thousand  and  five  hundred, 
(4,847,500,)  or  nearly  one-sixth  of  the  whole  population.  This  was 
exclusive  of  the  number  engaged  in  the  production  of  many  of  the  raw 
materials,  and  of  food  for  the  "manufacturers;  in  the  distribution 
of  their  products,  such  as  merchants,  clerks,  draymen,  mariners,  the 
employes  of  railroads,  expresses,  and  steamboats;  of  capitalists, 
various  artistic  and  professional  classes,  as  well  as  carpenters,  brick- 
layers, painters,  and  the  members  of  other  mechanical  trades  not 
classed  as  manufacturers.  It  is  safe  to  assume,  then,  that  one-third 
of  the  whole  population  is  supported,  directly  and  indirectly,  by 
manufacturing  industry.  .  .  . 

It  is  a  gratifying  fact,  shown  by  the  official  statistics,  that  while 
our  older  communities  have  greatly  extended  their  manufactures,  the 
younger  and  more  purely  agricultural  States,  and  even  the  newest 
Territories,  have  also  made  rapid  progress.  Nor  has  this  depart- 
ment of  American  industry  been  cultivated  at  the  expense  of  any 
other.  There  is  much  reason  to  believe  that  it  affords  the  safest 
guarantee  of  the  permanency  and  success  of  every  other  branch. 
Evidence  bearing  upon  this  point  is  found  in  the  manufacture  of 
agricultural  machines  and  implements,  which  is  one  of  the  branches 
that  shows  the  largest  increase  in  the  period  under  review.  There 
is  little  doubt  that  the  province  of  manufactures  and  invention  in  this 
case  has  been  rather  to  create  than  to  follow  the  demand.  The 
promptness  of  Americans  to  adopt  labor-saving  appliances,  and  the 
vast  areas  devoted  to  grain  and  other  staples  in  the  United  States, 
have  developed  the  mechanics  of  agriculture  to  an  extent  and  perfec- 
tion elsewhere  unequalled.  The  adoption  of  machinery  to  the 
extent  now  common  in  farm  and  plantation  labor  furnishes  the  best 


THE  DEVELOPMENT  OF  MANUFACTURES  285 

assurance  that  the  development  of  agriculture  or  manufactures  to 
their  utmost,  can  never  again  justify  the  old  charge  of  antagonism 
between  them  in  regard  to  labor,  or  injuriously  affect  either  by  materi- 
ally modifying  its  cost  or  supply. 

II.   PROGRESS  OF  COTTON  MANUFACTURES,  1806-1860 
A.   Cotton  Manufactures  in  Massachusetts,  1806  1 

Already  by  1816  the  cotton  manufactures  of  the  country  were  important.  In 
that  year  Congress  imposed  a  tariff  on  imported  cotton  goods,  which  had  the 
effect  of  stimulating  the  industry  and  finally  of  making  it  the  leading  manufacture 
in  the  country.  This  remarkable  growth  may  be  seen  by  comparing  its  value  of 
output  and  capital  employed  at  different  times.  A  traveler  made  the  following 
comment  on  the  industry  early  in  the  century: 

About  four  miles  from  Providence,  we  passed  Patucket  river, 
and  entered  into  the  state  of  Massachusetts.  Here  there  are  very 
handsome  falls,  and  a  little  town  called  Patucket,  in  which  there 
is  a  thriving  manufactory  of  cotton  yarn  and  goods.  The  spinning 
works  are  said  to  be  on  the  most  approved  principle,  and  there  are 
several  looms  going  by  machinery. 

We  were  informed  that  the  cotton  trade  had  been  introduced 
here  by  a  gentleman  from  England,  a  pupil  of  Arkwright,  who  had 
been  very  successful;  that  other  people  were  following  his  example, 
and  that  this  branch  was  likely  to  increase  to  a  great  extent  in  this 
district.  I  doubted  the  power  of  the  people  here  to  become  com- 
petitors with  the  manufacturers  of  England;  but  I  learned  that  they 
confine  themselves  pretty  much  to  coarse  goods,  and  articles  of  the 
first  necessity;  and  on  turning  the  whole  information,  relative  to 
the  subject,  in  my  mind,  I  found  that  they  had  such  a  number  of 
circumstances  in  their  favour,  as  were  sufficient  to  balance,  if  not  to 
overcome,  the  disadvantages.  The  principal  disadvantage  is  the 
high  wages  which  must  be  paid  to  the  workmen;  and  it  is  supposed 
that  the  people  have  a  predeliction  for  agriculture,  which  has  a  ten- 
dency to  prevent  them  from  settling  at  sedentary  employments. 
This  last  circumstance  is  the  popular  opinion  in  Britain,  and  I  was 
impressed  with  its  reality  myself;  but  after  looking  round  me  in  this 
country,  I  rather  think  that  it  is  more  specious  than  solid;  for  I 
find  there  is  no  want  of  masons,  carpenters,  smiths,  tanners,  shoe- 
makers, hatters,  taylors,  and  other  mechanics,  none  of  which  are 
agricultural  employments.  All  these  and  other  branches  are  organ- 

1  Travels  Through  the  United  Slates  of  America.     By  John  Melish  (Philadelphia 
and  London, 1818),  73-5. 


286  READINGS  IN  ECONOMIC  HISTORY 

ized  and  practised  with  persevering  industry,  because  the  profits 
resulting  from  them  are  equal  to  those  resulting  from  agriculture; 
and  other  branches  will  be  subject  to  the  same  rule.  In  every  com- 
munity there  are  a  great  number  of  the  members  who  are  better 
adapted  for  labour  in  the  house  than  in  the  field;  and  the  force  of 
this  remark  is  peculiarly  applicable  to  the  cotton  trade,  in  which  a 
large  portion  of  the  labour  is  performed  by  machinery,  and  the 
remainder  principally  by  women  and  children.  But  all  labour  is 
better  paid  for  in  America  than  in  Britain.  The  proportion  is  prob- 
ably two  to  one;  and  if  the  cotton  trade  will  afford  this  advance  to 
the  labourers,  it  will  bear  a  competition  with  similar  manufacturers 
of  Britain,  and  prosper  —  not  else. 

The  most  striking  circumstance  in  favour  of  the  cotton  manu- 
factures is  the  cheapness  of  the  raw  material,  which  is  the  produce 
of  the  United  States.  They  manufacture  here  principally  upland 
cotton,  and  the  price,  including  carriage  to  this  place,  is  about  20 
cents  per  pound;  being  about  12  cents  lower  than  they  can  possibly 
have  it  in  Britain.  The  next  circumstance  is  the  heavy  charges  to 
which  British  manufactured  goods  are  subject  before  they  come 
into  the  American  market.  These  may  be  reckoned  at  least  equal  to 
45  per  cent.:  namely,  carriage,  insurance,  and  shipping  charges, 
5  per  cent;  American  duties,  16^  per  cent.;  importer's  profit,  10 
per  cent;  American  merchant's  profit  and  contingencies,  14^  per 
cent.  .  .  . 

It  is  my  opinion,  upon  the  whole,  that  the  cotton  manufacture 
will  increase  in  America;  and  that  it  holds  out  a  very  good  induce- 
ment for  men  of  capital  to  embark  in  it. 

B.   State  of  Cotton  Manufactures  in  1816  1 

In  1816  a  house  committee  investigated  the  manufacture  of  cotton  goods  and 
showed  the  development  of  the  industry  as  follows: 

While  commerce  flourished,  the  trade  which  had  been  carried  on 
with  the  continent  of  Europe,  with  the  East  Indies,  and  with  the 
colonies  of  Spain  and  France,  enriched  our  enterprising  merchant 
the  benefits  of  which  were  sensibly  felt  by  the  agriculturists,  whos 
wealth  and  industry  were  increased  and  extended.     When  extern^ 
commerce  was  suspended,  the  capitalists  throughout  the  Union 
came  solicitous  to  give  activity  to  their  capital.     A  portion  of  it, 
it  is  believed,  was  directed  to  the  improvement  of  agriculture,  anc 

1  House   Committee  Report   on  Domestic   Manufactures.   Annals   of   Congres 
1815-16  (Washington,  1854),  961. 


THE  DEVELOPMENT  OF  MANUFACTURES  287 

not  an  inconsiderable  portion  of  it,  as  it  appears,  was  likewise  employed 
in  erecting  establishments  for  manufacturing  cotton  wool.  To  make 
this  statement  as  satisfactory  as  possible  —  to  give  it  all  the  cer- 
tainty that  it  is  susceptible  of  attaining,  the  following  facts  are  re- 
spectfully submitted  to  the  consideration  of  the  House.  They  show 
the  rapid  progress  which  has  been  made  in  a  few  years,  and  evidently 
the  ability  to  carry  them  on  with  certainty  of  success,  should  a  just 
and  liberal  policy  regard  them  as  objects  deserving  encouragement: 
In  the  year  1800,  500  bales  of  cotton  were  manufactured  in  manu- 
facturing establishments. 

In  the  year  1805,  1000  bales  of  cotton  were  manufactured  in  manu- 
facturing establishments. 

In  the  year  1810,  10,000  bales  of  cotton  were  manufactured  in  manu- 
facturing establishments. 

In  the  year  1815,  90,000  bales  of  cotton  were  manufactured  in  manu- 
facturing establishments. 

This  statement  the  Committee  have  no  reason  to  doubt;  nor 
have  they  any  question  as  to  the  truth  of  the  following  succinct 
statement  of  the  capital  which  is  employed,  of  the  labor  which  it 
commands,  and  of  the  products  of  that  labor : 

Capital $40,000,000 

Males  employed,  from  the  age  of  17  and  upwards 10,000 

Women  and  female  children 66,000 

Boys  under  17  years  of  age 24,000 

Wages  of  one  hundred  thousand  persons,  averaging  $150  each $15,000,000 

Cotton  wool  manufactured,  ninety  thousand  bales,  amounting  to £27,000,000 

Number  of  yards  of  cotton,  of  various  kinds 81,000,000 

Cost,  per  yard,  averaging  30  cents $24,000,000 

C.   Historical  Sketch  of  Cotton  Manufactures  before  1831 l 

The  state  of  the  cotton  manufacturing  industry  in  this  country  in  1831  was  not 
only  promising  but  flourishing.  More  than  a  million  spindles  were  in  operation, 
and  each  year  several  hundred  million  yards  of  cloth  were  turned  out  from  more 
than  500  mills.  The  development  of  the  industry  up  to  this  point  is  given  by  Mr. 
Kettell  as  follows: 

The  old  mill  of  Samuel  Slater,  Esq.,  the  first  building  erected  in 
America  for  the  manufacture  of  cotton  yarns,  is  a  venerable  wood- 
built  structure,  two  stories  in  height,  bearing  numerous  evidences 
of  its  antiquity,  having  been  erected  in  1793.  Two  spinning  frames, 
the  first  in  the  mill,  are  still  there,  and  are  decided  curiosities  in  their 
way.  It  is  almost  incredible  to  believe  that  this  old  building,  time- 

1  Eighty  Years'  Progress.     By  Thomas  P.  Kettell  (Hartford,  1869),  280-4. 


288  READINGS  IN  ECONOMIC  HISTORY 

worn  and  weather-browned,  was  the  first  to  spread  its  sheltering 
roof  over  the  young  pupil  of  Arkwright,  and  that  those  dwarf  frames, 
rusty  and  mildewed  with  inactivity,  are  the  pioneer  machines  of  that 
immense  branch  of  our  national  industry  —  the  manufacture  of 
cotton  goods.  It  may  be  remarked  that  down  to  1828  the  exporta- 
tion of  machines  of  all  kinds,  and  also  wool,  was  strictly  prohibited 
in  England,  for  fear  other  nations  should  benefit  by  English  mechani- 
cal genius,  of  which  they  supposed  they  had  a  monopoly;  when, 
however,  they  found  that  the  balance  of  genius  was  on  this  side  of  the 
pond,  they  liberally  removed  the  prohibition.  Mr.  Slater,  the  father 
of  American  cotton  manufacture,  was  so  closely  watched  at  the 
English  custom-house,  that  he  could  not  smuggle  over  a  drawing  or 
pattern.  He  had,  however,  acquired  a  full  knowledge  of  the  Ark- 
wright principle  of  spinning,  and  from  recollection,  and  with  his 
own  hands,  made  three  cards  and  twenty-two  spindles,  and  put  them 
in  motion  in  the  building  of  a  clothier,  by  the  water-wheel  of  an  old 
fulling-mill.  Sixty-seven  years  have  since  elapsed,  and  the  business 
has  in  that  period  increased  beyond  all  precedent  in  the  history  of 
manufactures.  .  .  . 

By  the  returns  of  the  marshals  of  the  census  of  1810,  the  number 
of  cotton  factories  was  168,  with  90,000  spindles;  but  from  most  of 
the  states  no  returns  were  made  of  the  quantity  of  cotton  used  and 
the  yarns  spun.  Massachusetts  had  54,  most  of  them,  no  doubt, 
small,  having  in  the  whole  only  19,448  spindles,  consuming  but 
838,348  pounds  of  cotton,  and  their  produce  valued  at  $931,916. 
Rhode  Island  had  26  factories,  with  21,030  spindles,  and  Connecticut 
14,  with  11,883  spindles.  These  were  for  the  supply  of  yarn  to  be 
used  in  hand  looms  exclusively. 

In  this  position  of  affairs  the  war  took  place;  but  just  on  its  eve 
Mr.  Francis  C.  Lowell,  of  Boston,  returned  from  Europe,  where  he 
had  inspected  the  great  improvements  in  machines  for  cotton  manu- 
facturing, and  had  formed  the  project  of  establishing  the  manufacture 
in  this  country.  He  associated  with  himself  in  the  enterprise  his 
brother-in-law,  Patrick  S.  Jackson,  and  they  set  about  it.  The 
country  was  then  at  war  with  England,  and  there  was  no  possibility 
of  getting  either  models  or  machines  thence,  nor  even  drawings. 
The  memory  of  Mr.  Lowell  was  all  that  was  to  be  depended  upon 
for  the  structure  of  the  machinery,  the  materials  used  in  the  con- 
struction, even  the  tools  of  the  machine  shop.  The  first  object  to  be 
accomplished  was  to  procure  a  power  loom.  To  obtain  one  from 
England  was,  of  course,  impracticable;  and  although  there  were 


THE  DEVELOPMENT  OF  MANUFACTURES  289 

many  patents  for  such  machines  in  our  Patent  Office,  not  one  had 
yet  exhibited  sufficient  merit  to  be  adopted  into  use.  Under  these 
circumstances  but  one  resource  remained  —  to  invent  one  themselves 
—  and  this  these  earnest  men  at  once  set  about. 

The  establishment  of  the  Lowell  mills  took  place  at  a  time  when 
the  occurrence  of  war  had  diverted  the  capital  of  New  England  from 
commerce,  and  it  eagerly  sought  new  models  of  investment.  These 
were  presented  in  the  promising  prospects  of  the  newly  invented 
machine  manufactures.  The  cotton  growth  of  the  south  had  become 
large  before  the  war,  and  that  event  caused  an  immense  accumulation 
of  stock  that  sunk  the  price  to  the  lowest  point,  and  by  so  doing, 
offered  an  abundance  of  raw  material  at  rates  merely  nominal  com- 
pared with  what  the  English  manufacturers  had  been  paying.  This 
gave  a  great  advantage  to  the  new  enterprise,  and  Congress  aided  it 
by  the  establishment  of  protective  duties.  The  minimum  cotton  duty 
was  invented  for  the  purpose.  The  rate  was  nominally  ad  valorem, 
but  the  price  was  fixed  at  a  minimum,  on  which  the  duty  was  cast  — 
hence  the  duty  was  in  effect  specific.  Thus,  the  abundant  raw 
material,  the  low  price  of  cotton,  and  the  protection  of  the  government, 
all  combined  to  give  breadth  to  the  newly  awakened  manufacturing 
fever.  The  capital  that  crowded  into  it,  soon,  as  a  matter  of  course, 
overdid  the  business,  and  distress  followed,  which  was  sought  to  be 
relieved  by  a  still  higher  tariff  in  1824.  That  seemed,  however,  to 
add  but  fuel  to  the  flame;  and  in  1828,  still  higher  rates  were  de- 
manded. We  may  compare  these  tariffs:  cotton  goods  not  dyed 
were  to  be  valued  at  twenty-five  cents  per  square  yard,  and  pay 
twenty-five  per  cent,  duty,  or  six  and  a  quarter  cents  per  yard;;  goods 
printed  or  dyed  were  to  pay  nine  cents  per  square  yard;  fustians, 
moleskins,  etc.,  were  to  pay  twenty-five  cents  per  square  yard;  wool- 
lens were  charged  twenty-five  per  cent,  in  1816,  thirty-three  and  a  half 
per  cent,  in  1824,  and  forty-five  per  cent,  in  1828.  Under  all  these  cir- 
cumstances, the  manufacture  could  not  fail  to  grow  rapidly,  and  of 
course  to  bring  on  distress  as  the  result.  In  1831,  the  tariff  excite- 
ment had  reached  such  a  pitch  that  the  most  disastrous  political 
results  were  anticipated.  It  was  then  that  the  committee  of  the 
convention  collected  information  of  the  existing  manufactures.  They 
reported  the  table  which  we  annex.  The  returns  are  for  the  eleven 
states  where  manufactures  were  well  developed  [modified  statistics 
of  seven  of  the  eleven  states  are  given  below];  some  twenty  to 
thirty  other  mills  were  also  reported,  but  so  imperfectly  that  the 
returns  were  rejected.  The  table  is  very  valuable  —  as  follows: — 


290 


READINGS  IN  ECONOMIC  HISTORY 


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THE  DEVELOPMENT  OF  MANUFACTURES  291 

Such  had  been  the  immense  growth  of  the  manufacture  in  ten 
years  from  the  time  the  Lowell  mills  were  started,  when  but  little 
machine  cloth  was  made;  but  in  1831,  there  was  made,  it  appears, 
230,461,990  yards,  or  nearly  twenty  yards  per  head  of  all  the  people. 
It  is  obvious  that  this  large  and  sudden  production  of  cloth  could  have 
found  vent  only  by  supplanting  the  work  of  families  and  hand  looms, 
and  of  course  by  pressing  hard  upon  the  spinners  of  yarn.  .  .  . 

D.   A  View  of  Cotton  Manufactures  in  1860  [ 

The  twenty  years  preceding  1860  saw  a  rapid  development  of  the  cotton  goods 
industry.  The  number  of  spindles  increased  to  more  than  5,000,000,  while  the 
number  of  pounds  of  cotton  consumed  exceeded  350,000,000. 

Among  the  great  branches  of  pure  manufacture  in  the  United 
States,  that  of  cotton  goods  holds  the  first  rank  in  respect  to  the  value 
of  the  product  and  the  amount  of  capital  employed.  Aided  by  the 
possession  of  the  raw  material  as  a  product  of  our  own  soil,  and  by 
the  enterprise  and  ingenuity  of  our  people,  this  valuable  industry 
has  grown  with  a  rapidity  almost  unrivalled. 

The  total  value  of  cotton  goods  manufactured  in  New  England 
was  $80,301,535,  and  in  the  middle  States  $26,272,111  — an  increase 
of  83.4  per  cent,  in  the  former,  and  77.7  in  the  latter.  The  remaining 
States  produced  to  the  value  of  $8,564,280,  making  the  whole  produc- 
tion during  that  year  $115,137,926,  against  $65,501,687,  the  value  of 
this  branch  in  1850,  or  an  increase  in  the  general  business  of  nearly 
76  per  centum  in  ten  years.  In  the  States  of  Maine  and  Newr  Jersey 
the  manufacture  increased  in  the  same  time  152  per  cent.;  in  Penn- 
sylvania, over  102  per  cent.;  in  New  Hampshire  and  Connecticut, 
over  87  per  cent.;  in  Massachusetts  nearly  69  per  cent.,  and  in  Rhode 
Island  88.7  per  cent.  The  total  production  in  this  branch  was  at  the 
rate  per  capita  of  $3  69  for  every  individual  in  the  Union,  equivalent 
to  46!  yards  of  cloth  for  each,  at  the  medium  price  of  8  cents  per  yard. 
The  average  product  per  head  in  1850  was  32^  yards.  The  increase 
alone  has,  therefore,  been  at  the  rate  of  n  yards  for  each  person,  or 
nearly  equal  to  the  average  annual  consumption  per  capita  in  1830, 
when  it  was  estimated  to  amount  to  twelve  yards.  The  number  of 
hands  employed  in  the  manufacture  in  1860  was  45,315  males,  and 
73,605  females,  an  increase  in  the  male  operatives  of  10,020,  and  in 
the  female  of  10,944  since  1850.  The  average  product  of  the  labor 
of  each  operative  was  $969.  The  number  of  spindles  was  returned 

1  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  65-7. 


2Q2 


READINGS  IN  ECONOMIC  HISTORY 


at  5,035,798,  being  an  increase  of  1,402,105,  or  38.5  per  cent,  over  the 
aggregate  in  1850,  which  was  estimated  at  3,633,693.  The  New 
England  States  possess  3,959,297,  or  78.6  per  cent,  of  the  whole,  while 
Massachusetts  alone  employs  1,739,700,  or  29.3  per  cent,  of  the  num- 
ber returned  in  the  Union.  The  increase  of  spindles  in  the  last  decade 
was,  in  New  England,  1,208,219,  or  30  per  cent.  In  the  State  of 
Maine,  186,100,  or  163.3  per  cent.;  in  the  State  of  New  Hampshire, 
229,484,  or  52.1  per  cent.;  in  the  State  of  Massachusetts,  451,609,  or 
35  per  cent.;  in  the  State  of  Rhode  Island,  141,862,  or  22.7  per  cent.; 
in  the  State  of  Connecticut,  211,188,  or  83.1  per  cent.;  while  in  Ver- 
mont it  exhibited  a  decrease. 

The  product  per  spindle  varies  in  the  different  States,  partly 
accounted  for  by  the  fact  that  many  manufacturers  purchase  yarns 
which  have  been  spun  in  other  States. 

The  product  of  cotton  goods  per  spindle  is  as  follows:  In 
Maine,  $22  12;  Massachusetts,  $21  12;  New  Hampshire,  $24  87; 
Vermont,  $18  13;  Rhode  Island,  $16;  Connecticut,  $16  46.  The 
average  in  the  New  England  States  is  $20  30;  in  the  middle  States, 
$30  48,  and  in  the  whole  Union,  $22  86. 

The  quantity  of  cotton  used  in  the  fabrication  of  the  above  goods 
was  364,036,123  pounds,  or  910,090  bales  of  400  pounds  each.  Of  this 
amount  the  New  England  States  consumed  611,738  bales,  and  Massa- 
chusetts alone  316,665.  The  consumption  per  spindle  in  that  year 
in  the  various  States  and  sections  was  as  follows: 


No.  of  Spindles 

Pounds  of  Cotton 

Pounds  per 
spindle 

Maine  

300,000 

23  438  723 

78 

New  Hampshire  

660,88? 

30  212  644 

rg    C 

Vermont  

IQ.7I2 

I,O?7,2?O 

S3 

Massachusetts.  .  . 

I  73O  7OO 

126  666  080 

72    8 

Rhode  Island.  . 

766  ooo 

38  521  608 

Connecticut.  ...           ... 

j.6  j.  ooo 

I  ?  7OO  I4O 

34 

In  New  England.  .  .  . 

^,0^0,207 

237  844  8>4 

61  8 

In  the  Middle  States.  .  . 
In  the  United  States.  .  . 

861,661 
5,035,798 

76,055,666 
364,036,123 

88.26 

72.  2 

When  we  consider  the  large  number  of  hands,  and  especially  of 
women  and  children,  who  find  employment  in  this  business,  the 
quantity  of  raw  material,  of  machinery  and  of  fuel,  exclusively  of 


THE  DEVELOPMENT  OF  MANUFACTURES  293 

American  production,  employed  in  this  branch,  and  the  amount  of 
comfortable  clothing  and  household  stuffs  supplied  at  cheap  rates, 
or  the  amount  it  contributes  to  the  internal  and  foreign  commerce 
of  the  Union  —  its  progressive  increase  is  a  subject  of  the  highest 
satisfaction,  and  its  growth  both  here  and  abroad  is  one  of  the 
marvels  of  the  nineteenth  century. 

III.  THE  WOOLEN  INDUSTRY,  1811-1860 

A.  Woolen  Cloth  for  Army  Uniforms,  1811 l 

The  woolen  industry  had  been  important  from  an  early  day,  for  the  "homespun  " 
worn  by  the  colonists  was  made  of  wool.  Although  its  manufacture  fell  behind 
that  of  cotton  goods  with  the  introduction  of  machinery,  it  continued  to  be  in- 
creasingly important  down  to  the  breaking  out  of  the  Civil  War.  Even  before  the 
Second  War  with  Great  Britain  the  American  manufactures  were  able  to  compete 
with  the  English  product. 

In  the  woollen  branch  offers  (jrf  cloth  for  army  uniforms]  were 
abundant,  and  the  finer  the  goods  or  the  materials  proposed  the  more 
ready  the  disposition,  abundant  the  quantity  in  proportion  to  the 
demand  and  moderate  the  prices.  The  best  cloths,  suitable  for  the 
commissioned  officers,  were  offered  upon  terms  the  least  advanced 
above  the  European  prices,  owing  to  the  spreading  of  the  merino 
sheep.  The  cloths  for  the  non-commissioned  officers  and  privates, 
were  offered  upon  terms  advanced  upon  the  next  degree  of  moderation 
above  the  European  prices,  because  the  great  body  of  our  native  or 
old  stock  of  sheep  produce  wool,  which  after  picking  out  a  little  coarse 
and  a  good  deal  of  fine,  will  do  well  for  cloths  suitable  for  these  two 
purposes.  .  .  . 

B.  Early  Agitation  for  Sheep  Raising,  1811 2 

Friends  of  American  woolen  manufactures  early  called  attention  to  the  impor- 
tance of  increasing  the  flocks  and  of  improving  the  breed  of  sheep  in  the  United 
States.  To  this  end  they  pointed  out  the  superior  advantages  of  the  country  in 
this  respect  over  Great  Britain.  The  following  is  a  typical  appeal: 

It  will  be  found  in  Mr.  Arthur  Young's  "Report  (p.  367)  on 
Lincolnshire"  in  England,  that  the  whole  land  in  that  county  is 
1,848,000  acres;  having  on  them  2,400,000  sheep  of  two  heavy  fleeced 
breeds,  producing  21,610,000  pounds  of  wool,  selling  at  one-sixth  of  a 
dollar  (or  15  pence  sterling)  per  pound.  The  whole  value  of  un- 

1  Niles'  Register  (Baltimore,  1811),  I,  45. 

2  Niles'  Register  (Baltimore,  1811),  I,  100. 


294  READINGS  IN  ECONOMIC  HISTORY 

manufactured  wool  is  £810,000  sterling;  equal  to  3,600,000  dollars. — 
This,  at  our  prices  for  wool,  would  be  equal  in  value  to  all  the  American 
cotton  exported  from  the  United  States  in  a  year,  being  7  or  8  mil- 
lions of  dollars.  The  weight  of  this  wool  is  greater  than  the  wreight 
of  all  the  sheep  wool  yet  made  in  the  United  States  in  any  year. 

When  it  is  considered,  that  the  quantity  of  land  in  Lincolnshire 
(G.  B.)  is  not  more  than  one-fifteenth  of  the  land  in  Pennsylvania, 
or  in  New  York,  a  tenth  of  South  Carolina,  or  one-twelfth  of  North 
Carolina,  there  can  be  no  doubt  of  the  immense  capacity  of  the  United 
States  to  produce  wool.  The  county  of  Lincoln  (G.  B.)  is  in  a  great 
part  fenny  or  marshy:  in  part  it  is  heath:  in  parts  dry  and  rich. 
Some  of  the  fenny  districts  produce  fleeces  of  fourteen  pounds.  It  is 
probable  that  some  of  our  richest  drained  swamps  would  be  excellent 
for  such  sheep. 

Mr.  Young  states,  that  the  average  of  the  Lincolnshire  sheep,  of 
the  two  different  breeds,  is  nine  pounds  of  wool  to  the  fleece :  and  those 
farmers  who  confine  themselves  to  the  Lincolnshire  breed  get  ten 
pound.  Some  authorities  say  eleven  pounds,  are  the  true  average 
weight  of  the  fleeces  of  the  true  Lincolnshire  breed.  Let  us  increase 
our  care  of  sheep,  and  omit  to  kill  any  lambs  or  sheep  under  three 
years  old,  and  we  shall  have  more  wool  in  the  next  year  or  two  for 
our  army,  navy,  militia,  and  camp  followers  and  all  attendants  and 
privateers,  than  will  be  requisite  for  any  war  with  any  power  in 
Europe. 

C.   State  of  the  Woolen  Industry  in  1816  l 

In  1816  the  house  committee  on  commerce  and  manufactures  expressed  the  belief 
that  a  memorial  from  which  the  following  extract  is  taken  was  substantially  correct. 

At  this  time  there  are  in  the  State  of  Connecticut  alone  twenty- 
five  establishments  for  the  manufacture  of  woollen  cloths,  employing 
twelve  hundred  persons,  and  as  many  more  indirectly  who  do  not 
immediately  appertain  to  the  establishment.  The  capital  already 
invested  therein  amounts  to  four  hundred  and  fifty  thousand  dollars; 
and  they  are  capable  of  making,  and  probably  do  manufacture 
annually,  equal  in  amount  to  three  hundred  and  seventy-five  thousand 
yards  of  narrow,  or  one  hundred  and  twenty-five  thousand  yards  of 
broadcloths.  Besides  this  quantity  made  at  the  establishments,  it  is 
calculated  there  are  five  hundred  thousand  yards  made  annually  in 
families  and  dressed  in  the  country  clothiers'  shops;  part  of  which 

1  House  Committee  Report  on  Domestic  Manufactures.     Annals  of    Congress, 
1815-16  (Washington,  1854),  1701-3. 


THE  DEVELOPMENT  OF  MANUFACTURES  295 

is  regularly  sold  to  the  country  stores;  .  .  .  The  value  of  all  the 
woollen  cloths  thus  manufactured,  at  the  lowest  estimate,  is  about 
$1,500,000,  making  a  home  market  for  a  staple  of  nine  hundred 
thousand  pounds  of  wool,  or  the  produce  of  four  hundred  thousand 
sheep.  .  .  . 

A  great  proportion  of  the  woollen  manufacture  is  done  by  the 
assistance  of  labor-saving  machinery,  which  is  almost  exclusively 
superintended  by  women  and  children,  and  the  infirm,  who  would 
otherwise  be  wholly  destitute  of  employment;  whereas  they  are  now 
able  to  maintain  themselves.  The  manual  labor  employed  is  of  that 
class  who,  from  their  previous  habits  and  occupations  in  life,  are 
wholly  unfitted  for  agricultural  pursuits;  and  who,  if  not  thus  employed 
would,  in  most  instances,  be  a  burden  on  society.  .  .  . 

SUMMARY 

Permanent  capital  in  buildings  and  machinery $12,000,000. 

Annual  value  of  raw  material,  manufactured 7,000,000. 

Value  of  cloths  annually  manufactured 19,000,000. 

Increase  of  value  by  manufacturing 12,000,000. 

Number  of  persons  employed 

Directly. 50,000 

Incidentally 50,000 

100,000 

D.    The  Woolen  Industry  in  1860  1 

In  1860  the  woolen  establishments  in  the  United  States  numbered  almost  two 
thousand,  represented  an  investment  of  more  than  $35,000,000,  and  gave  employ- 
ment to  50,000  hands. 

The  returns  of  Woolen  Manufacturers  show  an  increase  of  over 
fifty-one  per  cent,  in  ten  years.  The  value  of  woollen  and  mixed 
goods  made  in  1850  was  $45,281,764.  In  1860  it  amounted  to 
$68,865,963.  The  establishments  numbered  1,909,  of  which  453  were 
in  New  England,  748  in  the  middle,  479  in  the  western,  2  in  the 
Pacific,  and  227  in  the  southern  States.  The  aggregate  capital 
invested  in  the  business  was  $35,520,527,  and  it  employed  28,780 
male  and  20,120  female  hands,  639,700  spindles,  and  16,075  looms, 
which  worked  up  more  than  eighty  million  pounds  of  wool,  the  value 
of  which,  with  other  raw  materials,  was  $40,360,300.  The  foregoing 
figures  include  satinets,  Kentucky  jeans,  and  other  fabrics  of  which 
the  warp  is  cotton,  though  usually  classed  with  woollens.  In  the 

1  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  67. 


296  READINGS  IN  ECONOMIC  HISTORY 

manufacture  of  these  mixed  goods  the  amount  of  cotton  consumed 
is  16,008,625  pounds,  which,  with  364,036,123  pounds  used  in  making 
cotton  goods,  as  previously  stated,  amounts  to  380,044,748  pounds, 
or  950,112  bales,  exclusive  of  a  considerable  quantity  used,  annually, 
in  household  manufactures,  and  for  various  other  purposes. 

The  largest  amount  of  woollens  was  made  in  New  England,  where 
the  capital  was  nearly  twenty  millions  of  dollars,  and  the  value  of 
the  product  $38,509,080,  but  little  less  than  the  total  value  in  1850. 
More  than  half  the  capital,  and  nearly  one-half  of  the  product  of 
New  England  belonged  to  Massachusetts,  which  had  131  factories 
of  large  size.  Rhode  Island  ranked  next,  and  had  increased  its 
manufacture  163  per  cent,  in  ten  years,  that  of  Massachusetts  being 
48  per  cent.  The  value  of  woollens  produced  in  the  middle  States  was 
$24,100,488,  in  the  western  $3,718,092,  and  in  the  Pacific  and  southern 
$2,538,303.  The  sectional  increase  was,  in  New  England  52.1,  in  the 
middle  States  54,  and  in  the  south  107  —  the  last  showing  the  greatest 
relative  increase.  Pennsylvania,  next  to  Massachusetts,  was  the 
largest  producer,  having  447  factories,  which  made  $12,744,373  worth 
of  woollen  and  mixed  fabrics,  an  increase  of  120  per  cent..  A  value 
of  $8,919,019  was  the  product  of  222  establishments  in  the  city  of 
Philadelphia. 

The  State  of  New  York  holds  the  third  rank  in  relation  to  this 
industry,  its  manufactures  amounting  to  more  than  nine  millions  of 
dollars.  The  woollen  manufactures  of  Maryland  exhibit  an  increase 
of  86  per  cent.  In  Ohio,  which  produced  in  1850  a  greater  value  of 
woollens  than  all  the  other  western  States,  there  was  a  decrease  on 
the  product  of  1850,  owing,  probably,  to  the  shipments  of  wool  to 
Europe,  which,  in  1857,  was  found  to  be  the  most  profitable  dis- 
position of  the  rapidly  increasing  wool  crops  of  that  State.  In 
Kentucky,  now  the  largest  manufacturer  of  wool  in  the  west,  the 
product  was  $1,128,882,  and  the  increase  in  ten  years  40.4  per  cent, 
while  in  Indiana,  which  ranks  next,  it  was  31  per  cent.,  and  in  Mis 
souri  1 8. 8,  on  the  product  of  1850.  .  .  . 

The  quantity  of  wool  returned  for  the  whole  Union  in  1850  was 
upwards  of  fifty-two  and  a  half  millions  of  pounds.  Sheep  raising 
has  been  greatly  extended  and  improved  since  that  date  in  Ohio 
Texas,  California,  and  other  States,  and  the  clip  in  1860  amountec 
to  60,511,343  pounds,  an  increase  of  15.2  per  cent,  in  ten  years.  The 
yield  still  falls  far  short  of  the  consumption,  and  large  quantities 
continue  to  be  imported,  notwithstanding  the  amount  of  territory 
adapted  to  sheep  husbandry. 


THE  DEVELOPMENT  OF  MANUFACTURES  297 

IV.   DEVELOPMENT  or  THE  IRON  AND  STEEL  INDUSTRY 

View  in  1860 l 

A  third  important  manufacturing  industry  was  that  of  iron  and  steel  products. 
The  United  States  was  dependent  on  England  during  the  colonial  period  and  for 
years  afterward  for  these  products,  but  by  1860  this  country  was  producing  a 
great  part  of  the  iron  and  steel  consumed  here. 

The  total  value  of  Agricultural  Implements  made  in  1860  was  $17,- 
802,514,  being  an  increase  of  160.1  per  cent,  upon  the  total  value 
of  the  same  branch  in  1850,  when  it  amounted  to  the  sum  of  $6,842,61 1. 
This  manufacture  amounted  in  New  England  to  over  two  and  three- 
quarter  millions  of  dollars  —  an  increase  of  65.8  per  cent.  In  the 
middle  States  the  value  was  nearly  five  and  a  half  millions,  having 
increased  at  the  rate  of  122.2  per  centum.  In  the  western  States, 
where  the  increase  was  most  extraordinary,  the  value  of  implements 
produced  was  augmented  from  $1,923,927  to  $7,955,545.  The  incre- 
ment alone  in  those  States  was,  therefore,  only  a  fraction  less  than 
the  product  of  the  whole  northern  section  of  the  Union  in  1850,  and 
was  greater  by  313  per  cent,  than  their  own  manufacture  in  that 
year.  In  each  of  the  States  of  Ohio  and  Illinois,  which  are  the 
largest  manufacturers  in  the  west,  the  value  of  the  product  exceeded 
two  and  a  half  millions  dollars,  being  an  increase  in  the  former  of  382, 
and  in  the  latter  of  235  per  cent,  in  ten  years.  Michigan,  Indiana, 
and  Wisconsin  increased  their  production  of  agricultural  implements 
1,250,386  and  201  per  cent.,  respectively.  While  in  some  of  the 
southern  States  there  has  been  a  decrease,  in  Virginia,  Alabama, 
and  Louisiana  the  increase  in  this  branch  has  been  large,  and  in  Texas, 
which  reported  none  in  1850,  agricultural  implements  of  the  value  of 
$140,000  were  manufactured  in  1860.  The  whole  value  produced  in 
the  southern  States  in  the  latter  year  (including  cotton  gins)  was 
$1,582,483,  exhibiting  an  increase  of  over  101  per  cent,  in  the  last 
decade. 

The  quantity  of  Pig  Iron  returned  by  the  census  of  1860  was  884,- 
474  tons,  valued  at  $19,487,790,  an  increase  of  44.4  per  cent,  upon  the 
value  returned  in  1850.  Bar  and  other  Rolled  Iron  amounted  to 
406,298  tons,  of  the  value  of  $22,248,796,  an  increase  of  39.5  per  cent, 
over  the  united  products  of  the  rolling  mills  and  forges,  which  in  1850 
were  of  the  value  of  $15,938,786.  This  large  production  of  over  one 
and  a  quarter  million  of  tons  of  iron,  equivalent  to  92  pounds  for 
each  inhabitant,  speaks  volumes  for  the  progress  of  the  nation  in 

1  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  61-3. 


298  READINGS  IN  ECONOMIC  HISTORY 

all  its  industrial  and  material  interests.  The  manufacture  holds 
relations  of  the  most  beneficial  character  to  a  wide  circle  of  important 
interests  intimately  affecting  the  entire  population ;  the  proprietors  and 
miners  of  ore,  coal,  and  limestone  lands;  the  owners  and  improvers 
of  woodlands,  of  railroads,  canals,  steamboats,  ships,  and  of  every 
other  form  of  transportation;  the  producers  of  food,  clothing,  and 
other  supplies,  in  addition  to  thousands  of  workmen,  merchants, 
and  capitalists  and  their  families,  who  have  directly  participated  in 
the  benefits  resulting  from  this  great  industry.  It  has  supplied  the 
material  for  an  immense  number  of  founderies,  and  for  thousands  of 
blacksmiths,  machinists,  millwrights,  and  manufacturers  of  nails, 
hardware,  cutlery,  edged  tools,  and  other  workers  in  metals,  whose 
products  are  of  immense  aggregate  value  and  of  the  first  necessity. 
The  production  of  so  large  a  quantity  of  iron,  and  particularly  of  bar 
iron,  and  the  demand  for  additional  quantities  from  abroad,  tell  of 
the  progress  of  the  country  in  civil  and  naval  architecture  and  all 
the  engineering  arts;  of  the  construction  of  railroads  and  telegraphs, 
which  have  spread  like  a  net  over  the  whole  country;  of  steam- 
engines  and  locomotives;  of  spinning,  weaving,  wood,  and  metal 
working,  milling,  mining,  and  other  machinery;  and  of  all  the  multi- 
form instruments  of  science,  agriculture,  and  the  arts,  both  of  peace 
and  of  war;  of  the  manufacture  of  every  conceivable  article  of  con- 
venience or  luxury  of  the  household,  the  field,  or  the  factory.  The 
aggregate  statistics  of  iron  exhibit  the  extent  to  which  the  general 
condition  of  the  people  has  been  improved  by  this  great  agent  of 
civilization  during  the  ten  years  embraced  in  this  retrospect. 

The  materials  for  the  manufacture  of  iron  —  ore,  coal  and  other 
fuel,  water  power,  etc. —  are  so  diffused,  abundant,  and  cheap  that 
entire  independence  of  foreign  supplies  appears  to  be  alike  desirable 
arid  attainable  at  no  distant  period. 

Probably  no  class  of  statistics  possesses  more  general  interest,  as 
illustrating  the  recent  progress  of  the  country  in  all  the  operative 
branches,  and  in  mechanical  engineering,  than  those  relating  to 
Machinery.  Nearly  every  section  of  the  country,  particularly  the 
Atlantic  slope,  possesses  a  great  affluence  of  water  power,  wrhich  has 
been  extensively  appropriated  for  various  manufacturing  purposes. 
The  construction  of  hydraulic  machinery,  of  stationary  and  locomotive 
steam-engines,  and  all  the  machinery  used  in  mines,  mills,  furnaces, 
forges,  and  factories;  in  the  building  of  roads,  bridges,  canals,  railways, 
etc.;  and  for  all  other  purposes  of  the  engineer  and  manufacturer, 
has  become  a  pursuit  of  great  magnitude.  The  annual  product  of 


THE  DEVELOPMENT  OF  MANUFACTURES  299 

the  general  machinists'  and  millwrights'  establishments,  as  returned 
in  the  census  of  1850,  was  valued  at  $27,998,344.  The  value  of  the 
same  branch,  exclusive  of  sewing-machines,  amounted  in  1860  to 
$47,118,550,  an  increase  of  over  eighteen  millions  in  ten  years.  The 
middle  States  were  the  largest  producers,  having  made  over  48  per 
cent,  of  the  whole,  but  the  southern  and  western  States  exhibit  the 
largest  relative  increase.  The  ratio  of  increase  in  the  several  sec- 
tions was  as  follows:  New  England,  16.4  per  cent.;  middle  States, 
55.2;  southern,  387;  and  western,  127  per  cent.  The  Pacific  States 
produced  machinery  of  the  value  of  $1,686,510,  of  which  California 
made  $1,600,510.  In  Rhode  Island  the  business  was  slightly  dimin- 
ished, but  in  Connecticut  it  had  increased  165  per  centum.  The  great 
facilities  possessed  by  New  York  and  Pennsylvania  in  iron,  coal,  and 
transportation,  made  them  the  largest  manufacturers  of  machinery, 
which  in  the  former  was  made  to  the  value  of  $10,484,863,  and  in 
the  latter  $7,243,453  — an  increase  of  24.4  and  75  per  cent.,  respec- 
tively. New  Jersey  raised  her  product  to  $3,215,673,  an  increase 
of  261  per  cent.,  while  Delaware  and  Maryland  and  the  District  of 
Columbia  exhibited  an  increase  of  82,  41,  and  667  per  cent.,  respec- 
tively. In  all  the  southern  States  the  value  of  the  manufacture, 
though  small,  was  largely  increased;  the  ratio  in  Virginia,  the  largest 
producer,  being  236  per  cent.,  while  in  Mississippi,  Alabama,  and 
South  Carolina,  the  next  in  amount  of  production,  it  was  1,626,270, 
and  525  per  centum,  respectively.  This  was  exclusive  of  cotton-gins, 
which  were  included  with  agricultural  machinery.  Ohio  was  the 
largest  producer  in  the  west,  and  the  fourth  in  the  Union,  having 
made  to  the  value  of  $4,855,005,  an  increase  of  125  per  cent,  on  the 
product  of  1850.  Kentucky  ranked  next  among  the  western  States, 
having  produced  over  one  million  dollars'  worth,  and  increased  her 
product  213  per  cent.  The  ratio  of  increase  in  the  other  western 
States  was,  in  Indiana,  98;  in  Illinois,  24;  Wisconsin,  208;  Mis- 
souri, 214;  and  Iowa,  2,910  per  cent.,  respectively;  but  in  Michigan 
there  was  a  small  decrease  in  the  amount  manufactured. 

Besides  a  large  amount  of  machinery  and  other  castings  included 
in  the  returns  of  machine  shops,  the  value  of  the  production  of  Iron 
Foundries,  returned  by  the  census  of  1860,  reached  the  sum  of 
$27,970,193,  an  increase  of  42  per  cent,  on  the  value  of  that  branch 
in  1850,  which  was  $20,111,517.  New  York,  whose  extensive  stove 
founderies  swell  the  amount  of  production  in  that  State,  made  to 
the  value  of  $8,216,124,  and  Pennsylvania,  $4,977,793,  an  increase 
of  39  and  60.9  per  cent.,  respectively. 


300  READINGS  IN  ECONOMIC  HISTORY 

With  the  subject  of  iron  and  its  various  manufactures  that  of 
Fossil  Fuel  naturally  associates  itself.  The  unequalled  wealth  and 
rapid  development  of  the  coal  fields  of  the  United  States  as  a  dynamic 
element  in  our  industrial  progress  affords  one  of  the  most  striking 
evidences  of  our  recent  advance.  The  product  of  all  the  coal  mines 
of  the  United  States,  in  1850,  was  valued  at  $7,173,750.  The  annual 
value  of  the  anthracite  and  bituminous  coal,  according  to  the  Eighth 
Census,  was  over  nineteen  millions  of  dollars.  The  increase  was  over 
twelve  millions  of  dollars,  and  was  at  the  rate  of  169.9  per  cent, 
on  the  product  of  1850.  It  was  chiefly  produced  in  Pennsylvania, 
Ohio,  and  Virginia.  The  coal  mined  in  Pennsylvania,  in  1850,  was 
valued  at  $5,268,351.  In  the  year  ending  June  i,  1860,  the  State 
produced  9,397,332  tons  of  anthracite,  worth  $11,869,574,  and  of 
bituminous  coal,  66,994,295  bushels,  valued  at  $2,833,859,  making  a 
total  value  of  $14,703,433,  or  an  excess  of  $7,529,683  over  the  total 
product  of  the  Union  in  1850.  Of  bituminous  coal,  Ohio  raised 
28,339,900  bushels,  the  value  of  which,  was  $1,539,713;  and  Virginia, 
9,542,627  bushels,  worth  $600,188.  The  increase  in  Ohio  was  $819,587, 
and  in  Virginia,  $222,780,  in  the  value  of  mineral  fuel,  being  at  the 
rate  of  113  per  cent,  in  the  former,  and  47.6  per  cent,  in  the  latter. 
The  increase  in  Pennsylvania  was  179  per  centum  on  the  yield  of 
1850. 

V.  THE  LEATHER  INDUSTRY 

Development  during  the  Decade  1850-1860 l 

The  tanning  of  leather  and  its  manufacture  into  boots,  shoes,  and  harness, 
formed  another  important  industry.  On  the  one  hand  the  industry  touched  the 
agricultural  interests  of  the  country  and  on  the  other  the  manufacturing  and 
shipping  interests. 

The  production  of  Leather  is  also  a  leading  industry  of  much 
importance  to  the  agriculturist  and  stock  raiser,  as  well  as  to  the 
commercial  interest,  inasmuch  as  it  consumes  all  the  material  sup- 
plied by  the  former,  and  feeds  an  active  branch  of  our  foreign  import 
trade.  The  tanning  and  currying  establishments  of  the  United  States 
produced  in  1850  leather,  exclusive  of  Morocco  and  patent  leather, 
to  the  value  of  $37,702,333.  The  product  of  the  same  branch  in  1860 
reached  $63,090,751,  an  increase  of  nearly  67  per  centum.  In  the 
New  England  States  it  was  $16,333,871,  in  the  Middle  States, 
$36,344,548,  and  in  the  Western  States,  $5,986,457;  being  an  in- 
crease 66.6  per  cent.,  90.7  and  13.3  in  those  sections,  respectively. 

1  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  68-9. 


THE  DEVELOPMENT  OF   MANUFACTURES  301 

The  Pacific  States  and  Territories,  (including  Utah,)  which  returned 
no  leather  in  1850,  produced  in  1860  to  the  value  of  $351,469.  The 
largest  producers  of  leather  are  New  York,  $20,758,017;  Pennsyl- 
vania, $12,491,631;  and  Massachusetts,  $10,354,056;  an  increase  in 
those  States  of  111.7,  9^-4,  and  82.3  per  cent.,  respectively.  Includ- 
ing Morocco  and  patent  leather  the  aggregate  value  produced  in 
the  Union  in  1860  exceeded  sixty-seven  millions  of  dollars. 

If  we  add  to  the  sum  total  of  this  manufacture  the  aggregate 
value  of  all  the  allied  branches  into  which  it  enters  as  a  raw  material, 
or  take  an  account  of  the  capital,  the  number  of  hands,  and  the  cost  of 
labor  and  material  employed  in  the  creation  and  distribution  of  its 
ultimate  products,  it  is  doubtful  if  any  other  department  of  industry 
is  entitled  to  precedence  over  that  of  leather. 

The  manufacture  of  Boots  and  Shoes  employs  a  larger  number  of 
operatives  than  any  other  single  branch  of  American  industry.  The 
census  of  1850  showed  that  there  were  11,305  establishments,  with  a 
capital  of  nearly  thirteen  millions  of  dollars,  engaged  in  making  boots 
and  shoes  to  the  value  of  $53,967,408,  and  employing  72,305  male 
and  32,948  female  hands.  The  returns  of  1860  show  that  2,554 
establishments  in  the  New  England  States  employed  a  capital  only 
$2,516  less  than  that  of  the  whole  Union  at  the  former  date;  and  with 
56,039  male  and  24,978  female  employes  produced  boots  and  shoes 
of  the  value  of  $54,767,077  or  eight  hundred  thousand  dollars  more 
than  the  entire  value  of  the  business  in  1850,  and  82.8  per  centum 
in  excess  of  their  own  production  in  that  year.  Massachusetts  in- 
creased 92.6  per  cent.,  having  made  boots  and  shoes  of  the  value  of 
$46,440,209,  equal  to  86.6  per  cent,  of  the  general  business  in  1850. 
The  State  of  New  York  returned  2,276  factories,  with  an  aggregate 
production  of  $10,878,797;  and  New  England,  New  York,  Pennsyl- 
vania, and  New  Jersey  together  produced  $75,674,946  worth  of  these 
articles,  being  40.4  per  cent,  more  than  the  product  of  all  the  States 
in  1850,  and  67.9  per  cent,  more  than  their  own  manufacture  in  that 
year.  The  three  counties  of  Essex,  Worcester,  and  Plymouth,  in 
Massachusetts,  produced  boots  and  shoes  to  the  value  severally  of 
about  14^,  9!,  and  g\  millions  of  dollars.  The  largest  production  of 
any  one  town  was  that  of  Philadelphia,  in  which  it  amounted  to 
$5,329,887;  the  next  that  of  Lynn,  Massachusetts,  was  $4,867,399; 
the  third,  Haverhill,  $4,130,500;  the  fourth,  New  York  city,  $3,869,- 
068.  The  largest  production  of  a  single  establishment  was  of  one  in 
North  Brookfield,  Massachusetts,  and  amounted  to  over  $750,000. 
This  establishment  was  the  largest  of  five  the  same  proprietors  had 


302  READINGS  IN  ECONOMIC  HISTORY 

in  operation  that  year,  the  total  production  whereof  was  over  one 
million  pairs  of  boots  and  shoes,  valued  at  more  than  thirteen  hundred 
thousand  dollars!  Machinery  propelled  by  steam  power  is  now  used 
in  many  large  manufactories  with  highly  satisfactory  results. 


VI.  THE  BOSTON  SHOE  TRADE 
Extent  and  Value  of  Shipments  in 


The  center  of  the  shoe  trade  of  the  United  States  was  Boston.  From  the  many 
factories  located  in  the  neighborhood  of  that  city,  the  shoes  were  shipped  to  Boston 
for  distribution.  The  extent  of  the  trade  was  as  follows: 

The  annual  shipments  of  boots  and  shoes  from  Boston  have  reached 
the  large  figure  of  723,069  cases.  The  shipments  to  domestic  markets 
during  the  year  1859,  amounted  to  714,981  cases;  the  foreign  shipments 
have  been  5,078  cases,  presenting  the  above  aggregate.  We  are 
unable  to  make  an  exact  comparison  with  the  business  of  1858,  as  our 
weekly  railway  tables  were  not  commenced  until  July  of  that  year, 
but  we  can  make  a  near  approximation.  The  clearances  at  the 
custom-house  in  1858,  were  229,780  cases;  the  shipments  by  rail  for 
the  last  half  of  the  year  were  239,439  cases,  and  it  is  probable  that 
those  of  the  earlier  portion  of  the  year,  which  usually  are  somewhat 
less,  were,  in  consequence  of  the  previous  panic,  not  more  than  three- 
fourths  of  that  amount.  This  would  give  a  total  of  nearly  650,000 
cases  for  1858.  There  must  have  been  an  increase  of  at  least  75,000 
cases  the  past  year. 

These  figures  do  not  embrace  the  entire  business.  The  shipments 
to  the  New  England  towns,  which  are  kept  distinct  from  the  Southern 
and  Western  freights  by  the  different  railway  companies,  are  so  fre- 
quent and  numerous,  and  at  the  same  time  the  gross  amount  is  com- 
paratively so  small,  and  the  information  of  so  little  value,  that  we 
do  not  undertake  the  almost  impossible  task  of  including  them  in 
the  weekly  returns;  in  fact,  by  keeping  a  clerk  constantly  at  the 
office  of  each  road,  we  could  scarcely  take  them  from  the  freight 
bills  during  the  busy  season  without  interfering  with  the  business 
of  the  road.  Making  due  allowance  for  this  New  England  trade, 
for  the  impossibility  of  deciphering  obscure  figures  on  the  freight  bills, 
for  the  errors  of  railroad  clerks,  and  for  the  clearances  by  sea  to 
Southern  ports,  which  are  sometimes  entered  as  merchandise,  we  shall 
find  that  the  sales  of  Boston  dealers  the  past  year  have  considerably 

1  Hunt's  Merchants'  Magazine.     (New  York,  1860),  XLII,  610-3. 


THE  DEVELOPMENT  OF   MANUFACTURES  303 

exceeded  three  quarters  of  a  million  cases  of  boots  and  shoes.     An 
average  of  fifty  pairs  to  a  case  would  give  us  over  37,500,000  pairs, 
•  which,  at  the  estimate  of  $i   15  per  pair,  would  present  an  aggregate 
value  of  more  than  $43,000,000. 

.  The  annual  table  gave  the  separate  shipments  for  each  quarter  to 
each  of  439  towns  and  villages  at  the  South  and  West,  and  the  aggre- 
gate quarterly  shipments  to  a  still  larger  number  of  places  not  speci- 
fied, the  last  being  such  as  received  less  than  twenty  cases,  with  a  few 
that  presented  some  difficulty  in  ascertaining  with  certainty  the  name 
of  the  town  or  State,  but  altogether  amounting  to  only  19,271  cases. 
One-fourth  of  the  whole  number  were  sent  to  New  York.  Seven  of 
the  markets  drew  two-thirds  of  the  entire  shipments,  viz.,  New  York, 
182,207  cases;  San  Frarfcisco,  63,887;  Baltimore,  62,464;  Phila- 
delphia, 59,119;  St.  Louis,  55,774;  Cincinnati,  44,882;  and  New 
Orleans,  37,686  cases.  The  shipments  to  Louisville  were  21,119;  to 
Chicago,  19,168;  to  Charleston,  17,177;  and  to  Nashville,  13,781 
cases.  Of  the  others,  there  were  sent  to  Richmond,  Detroit, 
Buffalo,  Pittsburg,  Memphis,  and  Milwaukee,  from  3,000  to  5,000 
cases  each;  to  Indianapolis,  Savannah,  New  Albany,  St.  Joseph, 
Portsmouth,  O.,  Lexington,  Alton,  Keokuk,  Troy,  and  Rochester, 
from  2,000  to  3,000  each;  and  to  Albany,  Galena,  Evansville,  Syra- 
cuse, Dayton,  Lafayette,  Ind.,  Columbus,  0.,  Quincy,  111.,  Burlington, 
Iowa,  Dubuque,  Norfolk,  and  Portsmouth,  Va.,  Galesburg,  111.,  and 
Paducah,  Ky.,  from  1,000  to  2,000  cases  each.  Nineteen  other 
places  received  from  500  to  1,000  each,  and  one  hundred  and  three 
places  from  100  to  500  cases.  The  remainder,  amounting  to  275 
places,  received  from  20  to  100  cases  each.  Not  counting  those  sent 
to  the  States  of  New  York,  Pennsylvania,  Maryland,  and  California, 
and  classing  Missouri  and  Kentucky  with  the  South,  there  were 
shipped  to  the  Southern  States,  185,147  cases;  and  to  the  West, 
139,762  cases.  .  .  . 

VII.   MISCELLANEOUS  MANUFACTURES 
Extent,  Variety,  and  Value  in  1860 L 

Several  manufacturing  industries  other  than  those  already  noticed  had  become 
important  by  1860. 

The  increase  of  Printing  Presses  in  the  book  and  newspaper  manu- 
facture has  been  great  beyond  all  precedent,  and  has  exerted  the  most 

1  Preliminary  Report  on  the  Eighth  Census,  1860.  (Washington,  1862),  63-5, 
67-9. 


304  READINGS  IN  ECONOMIC  HISTORY 

beneficent  influence  by  cheapening  and  multiplying  the  vehicles  of 
instruction.  Its  effects  are  everywhere  apparent.  Never  did  an 
army  before  possess  so  much  of  cultivated  intellect  [written  during 
the  first  year  of  the  Civil  War],  or  demand  such  contributions 
for  its  mental  food  as  that  now  marshalled  in  its  country's 
defence.  Many  of  these  reading  soldiers  ripened  their  intellec- 
tual tastes  during  the  last  ten  years.  In  fact,  many  divisions 
of  our  army  carry  the  printing  press  and  type,  and  the  soldiers  issue 
publications  and  print  the  forms  for  official  papers.  The  press  is, 
indeed,  the  great  prompter  of  enterprise.  It  constantly  travels  with 
the  emigrant  to  diffuse  light  and  intelligence  from  our  remotest 
frontiers,  where  it  speedily  calls  into  existence  the  paper-mill  and  all 
the  accessories  which  it  supports  in  older  communities. 

In  New  England,  the  Middle,  and  Western  States  the  value  of 
book,  job,  and  newspaper  printing  is  returned  as  $39,428,043,  of  which 
eleven  millions'  worth  consisted  of  books,  the  value  of  the  latter  being 
nearly  equal  to  the  whole  product  of  the  same  branch  in  1850,  which 
was  returned  at  $11,586,549.  The  manufacture  of  Paper,  especially 
of  printing  paper,  has  increased  in  an  equal  ratio,  the  State  of  Massa- 
chusetts alone  producing  paper  of  the  value  of  $5,968,469,  being  over 
58  per  cent,  of  the  product  of  the  Union  in  1850.  New  York  returned 
paper  of  the  value  of  $3,516,276;  Connecticut,  $2,528,758;  and 
Pennsylvania,  $1,785,900. 

The  Sewing  Machine  has  also  been  improved  and  introduced,  in 
the  last  ten  years,  to  an  extent  which  has  made  it  altogether  a  revolu- 
tionary instrument.  It  has  opened  avenues  to  profitable  and  health- 
ful industry  for  thousands  of  industrious  females  to  whom  the  labors 
of  the  needle  had  become  wholly  unremunerative  and  injurious  in 
their  effects.  Like  all  automatic  powers,  it  has  enhanced  the  comforts 
of  every  class  by  cheapening  the  process  of  manufacture  of  numerous 
articles  of  prime  necessity,  without  permanently  subtracting  from  the 
average  means  of  support  of  any  portion  of  the  community.  It  has 
added  a  positive  increment  to  the  permanent  wealth  of  the  country 
by  creating  larger  and  more  varied  applications  of  capital  and  skill 
in  the  several  branches  to  which  it  is  auxiliary.  The  manufacture 
of  the  machines  has  itself  become  one  of  considerable  magnitude,*  and 
has  received  a  remarkable  impulse  since  1850.  The  returns  show  an 
aggregate  of  116,330  machines  made  in  nine  States  in  1860,  the  value  of 
which  was  $5,605,345.  A  single  establishment  in  Connecticut  manu- 
factured machines  to  the  value  of  over  $2,700,000,  or  nearly  one-half 
of  the  whole  production  in  that  year.  During  the  year  1861  sewing 


THE  DEVELOPMENT  OF   MANUFACTURES  305 

machines  to  the  value  of  over  $61,000  were  exported  to  foreign  coun- 
tries. It  is  already  employed  in  a  great  variety  of  operations  and 
upon  different  materials,  and  is  rapidly  becoming  an  indispensable 
and  general  appendage  to  the  household. 

Among  the  branches  of  industry  which  have  been  signally  promoted 
by  the  introduction  of  the  sewing-machine  is  the  manufacture  of 
men's  and  women's  Clothing  for  sale,  which  has  heretofore  ranked 
with  the  cotton  manufactures  in  the  number  of  hands  —  two-thirds 
of  them  females  —  and  the  cost  of  labor  employed.  The  increase 
of  this  manufacture  has  been  general  throughout  the  Union,  and  in 
the  four  cities  of  New  York,  Philadelphia,  Cincinnati,  and  Boston, 
amounted  in  value  to  nearly  forty  and  one-quarter  millions  of  dollars, 
or  over  83  per  cent,  of  the  product  of  the  whole  Union  in  1850.  The 
manufacture  of  shirts  and  collars,  of  ladies'  cloaks  and  mantillas  — 
a  new  branch  which  has  received  its  principal  impulse  within  the  last 
ten  years  —  and  of  ladies'  and  gentlemen's  furnishing  goods  generally, 
form  very  large  items  in  the  general  aggregate  of  this  branch.  They 
severally  employ  extensive  and  numerous  establishments,  many  of 
them  in  our  large  cities  with  heavy  capital.  In  Troy,  New  York,  the 
value  of  shirt  collars  alone  annually  manufactured  is  nearly  $800,000, 
approximating  in  value  to  the  product  of  the  numerous  and  extensive 
iron  founderies  which  have  been  a  source  of  wealth  to  that  city. 

The  influence  of  improved  machinery  is  also  conspicuously  ex- 
hibited in  the  manufacture  of  sawed  and  planed  lumber,  in  which  the 
United  States  stands  altogether  unrivalled,  as  well  for  the  extent 
and  perfection  of  the  mechanism  employed  as  the  amount  of  the 
product.  This  reached,  in  1850,  the  value  of  $58,521,976,  and,  in 
1860,  $95,912,286,  an  increase  of  64  per  cent,  in  the  last  decade.  The 
western  States  alone,  in  the  latter  year,  produced  lumber  to  the 
value  of  $33,274,793,  an  increase  of  $18,697,543,  or  128  per  cent. 
over  their  manufacture  in  1850.  The  Pacific  States  and  Territories 
produced  to  the  value  of  $6,171,431,  and  the  southern  $17,941,162, 
a  respective  increase  of  $3,841,826  and  $9,094,686  in  those  sections, 
being  a  ratio  of  162.7  and  102.3  per  centum. 

Several  branches  of  manufacture  have  an  intimate  relation  to 
agriculture  and  the  landed  interests,  and  by  their  extension  powerfully 
promote  those  interests  as  well  as  that  of  commerce.  Surpassing  all 
others  of  this  or  any  other  class  in  the  value  of  products  and  of  the 
raw  material  consumed,  is  the  manufacture  of  flour  and  meal.  The 
product  of  flour  and  grist  mills  in  1850  reached  a  value  of  nearly  one 
hundred  and  thirty-six  millions  of  dollars,  while  in  1860  the  returns 


306 


READINGS  IN  ECONOMIC  HISTORY 


exhibit  a  value  of  $223,144,369  —  an  increase  of  $87,246,563,  or  64.2 
per  cent,  in  the  last  ten  years.  The  production  and  increase  of  the 
several  sections  were  as  follows: 


Value  of  flour 
and  meal 

Increase 

Per  cent, 
increase 

New  England  States  

$n,ii;t;,44<; 

$4,834,0^0 

76  5 

Middle  States  

70,086,411 

10,653,  232 

I?    e 

Western  States  

06,038,704 

53,364,802 

I2s    O 

Southern  States  

30,767,457 

14,185,640 

85  5 

Pacific  States  

6,096,262 

4,2O7,Q3O 

222    8 

The  largest  mill  is  in  Oswego,  New  York,  which  in  1860  produced 
300,000  barrels  of  flour;  the  next  two,  in  Richmond,  Virginia,  made 
190,000  and  160,000,  respectively;  and  the  fourth,  in  New  York  City, 
returned  146,000  barrels.  The  value  of  annual  production  of  each 
ranged  from  one  million  and  a  half  to  one  million  dollars.  .  .  . 

The  manufacture  of  Linen  Goods  has  made  but  little  progress  in 
this  country.  A  few  mills,  chiefly  in  Massachusetts,  make  crash  and 
other  coarse  fabrics;  the  largest  two  in  that  State  produced  six  mil- 
lion yards  in  1860.  Others  are  extensively  engaged  in  making  twines, 
shoe  and  other  threads.  It  is  to  be  regretted  that  the  manufacture 
of  flax  has  not  attained  greater  magnitude  in  a  country  where  the 
raw  material  is  so  easily  and  cheaply  grown.  Farmers  throughout 
the  west  have  raised  the  crop  simply  for  the  seed,  and  thrown  out  the 
fibre  as  valueless. 

The  manufacture  of  fabrics  from  Flax  Cotton  has  been  commenced, 
and  success  in  a  new  branch  of  industry  is  confidently  expected.  The 
inventive  genius  of  our  countrymen  has  perfected  machinery  for  the 
preparation  of  flax  for  spinning,  which  can  be  furnished,  it  is  alleged, 
at  as  low  a  rate  as  the  product  of  southern  cotton  fields. 

The  manufacture  of  Sewing  Silks  is  extensively  carried  on  in  this 
country.  Including  tram,  organzine,  &c.,  the  production  exceedec 
five  million  dollars  in  the  States  of  Connecticut,  New  Jersey,  Massa- 
chusetts, Pennsylvania,  and  New  York  —  their  relative  values  being 
in  the  order  mentioned.  Ribbons  are  made  to  a  small  extent,  but 
the  chief  manufactures  of  silk  consist  of  ladies  dress  trimmings,  coach 
lace,  &c.,  of  which  the  cities  of  Philadelphia  and  New  York  produce 
to  the  value  of  $1,260,725  and  $796,682,  respectively.  .  .  . 

India  Rubber  Goods  wrere  made  chiefly  in  Connecticut,  New  York 


THE  DEVELOPMENT  OF   MANUFACTURES  307 

New  Jersey,  and  Massachusetts  to  the  value  of  $5,729,900,  an  increase 
of  oo  .per  cent,  in  the  last  decade. 

The  value  of  Cabinet  Furniture  made  in  1860  in  the  New  England, 
Middle  and  Western  States  reached  the  sum  of  $22,701,304,  an  in- 
crease of  39.8  per  cent,  over  the  product  of  those  States  in  1850,  and 
exceeding  the  production  of  the  whole  Union  in  1850.  New  York 
returned  in  1860  furniture  of  the  value  of  $7,175,060,  (or  40.6  per  cent, 
of  the  whole  amount  made  in  1850.)  Massachusetts,  $3,365,415,  and 
Pennsylvania,  $2,938,503.  The  growth  of  this  branch  keeps  pace 
with  the  increase  of  population  and  wealth,  and  serves  to  swell  the 
amount  of  our  exports.  It  gives  employment  at  remunerative  prices 
to  skilled  labor,  which  it  attracts  from  the  crowded  labor-markets 
of  Europe. 

Our  advance  in  wealth  and  refinement  is  attested  by  the  rapid 
increase  in  the  manufacture  of  piano  fortes  and  other  Musical  Instru- 
ments. New  England,  New  York,  and  Pennsylvania  produced 
musical  instruments  to  the  value  of  $5,791,807;  an  increase  of  150  per 
cent,  over  their  own  production  in  1850,  and  124  over  the  whole 
value  of  that  branch  in  the  "Union  in  the  same  year.  New  York 
alone  made  $3,392,577  worth,  being  $811,862  more  than  the  whole 
amount  returned  in  1850.  In  this  branch,  our  manufacturers  have 
achieved  marked  success.  Without  claiming  for  them  superiority 
over  their  brethren  in  France  and  Germany,  it  is  admitted  that  church 
organs  and  other  instruments  made  in  this  country  are  better  suited 
to  the  climate,  and  in  other  respects  fully  equal  to  those  which  come 
from  the  most  celebrated  establishments  in  Europe. 

The  increased  amount  of  the  precious  metals  and  the  greater 
ability  of  all  classes  to  indulge  the  promptings  of  taste  or  luxury, 
have  added  greatly  to  the  manufacture  of  Jewelry,  and  of  all  kinds  of 
gold,  silver,  and  plated  wares.  In  the  New  England  and  Middle 
States,  the  production  of  jewelry  and  watches  reaches  over  eleven 
millions  in  value;  of  silver,  silver-plated  wares,  &c.,  over  six  and  one- 
half  millions;  making  nearly  eighteen  millions  of  dollars,  exclusive 
of  gold  leaf  and  foil,  and  the  assaying  and  refining  the  precious  metals, 
exceeding  the  product  of  the  wrhole  Union,  in  1850,  by  $7,016,908  in 
value;  an  increase  of  over  sixty-four  per  cent.,  and  of  seventy  per 
cent,  on  the  production  of  those  States  in  that  year.  The  production 
of  cheap  jewelry  has  been  greatly  augmented  by  recent  improvements 
in  electro-metallurgy. 

The  manufacture  of  American  Watches,  commenced  within  the 
last  ten  years  in  Boston  as  an  experiment,  has  proved  eminently 


308  READINGS  IN  ECONOMIC  HISTORY 

successful.  Unable,  heretofore  to  compete  with  the  low-priced  labor 
of  European  workmen,  our  ingenious  countrymen  have  perfected 
machinery,  by  the  aid  of  which  watch  movements  are  fabricated 
equal,  if  not  superior,  to  the  hand-made.  The  continued  growth  of 
this  branch  will  diminish  the  importation  of  foreign  watches,  and  may, 
at  no  distant  period,  earn  for  our  country  a  reputation  in  this  manu- 
facture equal  to  that  she  enjoys  in  the  kindred  branch  of  clock-making. 
Gold  and  silver  watch  cases  are  now  produced  to  a  very  large  extent, 
chiefly  in  the  cities  of  Philadelphia,  New  York,  and  Newark. 


CHAPTER  X 
THE   TARIFF,   1808-1860 

I.    ENCOURAGEMENT  TO  MANUFACTURES 

Gdlatiris  Plans,  iSio1 

Following  the  Embargo  Act  in  1807  the  industry  of  the  country  slowly  under- 
went important  changes.  Part  of  the  capital  that  had  been  employed  in  shipping 
and  commerce  was  invested  in  manufactures,  while  another  part  found  its  way 
into  western  agriculture.  By  1810  it  had  become  obvious  that  the  government 
ought  to  encourage  the  former  industry,  and  in  a  report  on  manufactures  in  that 
year,  Secretary  Gallatin  had  the  following  to  say  on  the  subject: 

The  revenue  of  the  United  States,  being  principally  derived  from 
duties  on  the  importation  of  foreign  merchandise,  these  have  also 
operated  as  a  premium  in  favor  of  American  manufactures,  whilst, 
on  the  other  hand,  the  continuance  of  peace,  and  the  frugality  of 
Government,  have  rendered  unnecessary  any  oppressive  taxes,  tend- 
ing materially  to  enhance  the  price  of  labor,  or  impeding  any  species 
of  -industry. 

No  cause,  indeed,  has,  perhaps,  more  promoted,  in  every  respect, 
the  general  prosperity  of  the  United  States,  than  the  absence  of  those 
systems  of  internal  restrictions  and  monopoly  which  continue  to  dis- 
figure the  state  of  society  in  other  countries.  No  law  exists  here, 
directly  or  indirectly,  confining  man  to  a  particular  occupation  or 
place,  or  excluding  any  citizen  from  any  branch,  he  may,  at  any  time, 
think  proper  to  pursue.  Industry  is,  in  every  respect,  opened  to  all, 
without  requiring  any  previous  regular  apprenticeship,  admission,  or 
license.  Hence  the  progress  of  America  has  not  been  confined  to  the 
improvement  of  her  agriculture,  and  to  the  rapid  formation  of  new 
settlements  and  States  in  the  wilderness;  but  her  citizens  have  ex- 
tended their  commerce  through  every  part  of  the  globe,  and  carry 
on  with  complete  success,  even  those  branches  for  which  a  monopoly 
had  heretofore  been  considered  essentially  necessary. 

1  Gallatin's     Report     on     Manufactures,     1810.      American     State     Papers 
(Washington,  1834),  Series  Finance,   II,  430. 


3io  READINGS  IN  ECONOMIC  HISTORY 

The  same  principle  has  also  accelerated  the  introduction  and 
progress  of  manufactures,  and  must  ultimately  give  in  that  branch,  as 
in  all  others,  a  decided  superiority  to  the  citizens  of  the  United  States 
over  the  inhabitants  of  countries  oppressed  by  taxes,  restrictions  and 
monopolies.  It  is  believed  that,  even  at  this  tune,  the  only  powerful 
obstacle  against  which  American  manufactures  have  to  struggle, 
arises  from  the  vastly  superior  capital  of  the  first  manufacturing 
nation  of  Europe,  which  enables  her  merchants  to  give  very  long 
credits,  to  sell  on  small  profits,  and  to  make  occasional  sacrifices. 

The  information  which  has  been  obtained  is  not  sufficient  to  sub- 
mit, in  conformity  with  the  resolution  of  the  House,  the  plan  best 
calculated  to  protect  and  promote  American  manufactures.  The 
most  obvious  means  are  bounties,  increased  duties  on  importation, 
and  loans  by  Government. 

Occasional  premiums  might  be  beneficial;  but  a  general  system 
of  bounties  is  more  applicable  to  articles  exported  than  to  those 
manufactured  for  home  consumption. 

The  present  system  of  duties  may,  in  some  respects,  be  equalized 
and  improved,  so  as  to  protect  some  species  of  manufactures  without 
effecting  the  revenue.  But  prohibitory  duties  are  liable  to  the  treble 
objection  of  destroying  competition,  of  taxing  the  consumer,  and  of 
diverting  capital  and  industry  into  channels  generally  less  profitable 
to  the  nation  than  those  which  would  have  naturally  been  pursued 
by  individual  interest  left  to  itself.  A  moderate  increase  will  be  less 
dangerous,  and,  if  adopted,  should  be  continued  during  a  certain 
period;  for  the  repeal  of  a  duty  once  laid,  materially  injures  those 
who  have  relied  on  its  permanency,  as  has  been  exemplified  in  the 
salt  manufacture.  .  .  . 

II.  NEED  OF  PROTECTION 
Recommendation  of  President  Madison,  1815  1 

The  first  definite  news  of  the  treaty  with  Great  Britain  reached  the  United 
States  early  in  1815.  The  provisions  of  the  treaty  naturally  affected  the  course 
the  President  of  the  United  States  would  take  toward  the  protection  of  manu- 
factures. In  his  next  annual  message  to  Congress  (December,  1815),  President 
Madison  recommended  the  imposition  of  a  protective  tariff  that  would  protect 
American  manufactures  in  general,  but  more  particularly  those  which  would  make 
the  United  States  independent  of  foreign  powers  in  case  of  war.  He  said: 

In  adjusting  the  duties  on  imports,  to  the  object  of  revenue,  the 
influence  -of  the  tariff  on  manufactures  will  necessarily  present  itself 

1  Messages  and  Papers  of  the  Presidents.     Edited  by  James  D.   Richardson 
([Washington],  1895-1903),  I,  567. 


THE   TARIFF  311 

for  consideration.  However  wise  the  theory  may  be  which  leaves  to  the 
sagacity  and  interest  of  individuals  the  application  of  their  industry 
and  resources,  there  are  in  this,  as  in  other  cases,  exceptions  to  the 
general  rule.  Besides  the  condition  which  the  theory  itself  implies, 
of  a  reciprocal  adoption  by  other  nations,  experience  teaches  that  so 
many  circumstances  must  concur  in  introducing  and  maturing  manu- 
facturing establishments,  especially  of  the  more  complicated  kinds, 
that  a  country  may  remain  long  without  them,  although  sufficiently 
advanced,  and,  in  some  respects,  even  peculiarly  fitted  for  carrying 
them  on  with  success.  Under  circumstances  giving  a  powerful 
impulse  to  manufacturing  industry,  it  has  made  among  us  a  progress, 
and  exhibited  an  efficiency,  which  justifies  the  belief  that,  with  a  pro- 
tection not  more  than  is  due  to  the  enterprising  citizens  whose  inter- 
ests are  now  at  stake,  it  will  become,  at  an  early  day,  not  only  safe 
against  occasional  competitions  from  abroad,  but  a  source  of  domestic 
wealth,  and  even  of  external  commerce.  In  selecting  the  branches 
more  especially  entitled  to  the  public  patronage,  a  preference  is 
obviously  claimed  by  such  as  will  relieve  the  United  States  from  a 
dependence  on  foreign  supplies,  ever  subject  to  casual  failures,  for 
articles  necessary  for  the  public  defence,  or  connected  with  the  primary 
wants  of  individuals.  It  will  be  an  additional  recommendation  of 
particular  manufactures,  where  the  materials  for  them  are  exten- 
sively drawn  from  our  agriculture,  and  consequently  impart  and  in- 
sure to  that  great  fund  of  national  prosperity  and  independence  an 
encouragement  which  cannot  fail  to  be  rewarded. 

III.  ARGUMENTS  FOR  A  PROTECTIVE  TARIFF 
Views  of  Congress,  1816  l 

That  part  of  President  Madison's  message  relating  to  a  protective  tariff  was 
referred  to  a  house  committee  for  consideration.  A  majority  of  the  committee 
was  from  the  manufacturing  states,  but  several  of  its  members  were  from  the  ex- 
treme south.  This  committee  received  petitions  from  manufacturers,  and  after 
considering  them  in  relation  to  the  demands  of  the  public  finances  recommended 
that  a  protective  tariff  be  enacted  as  follows: 

The  States  that  are  most  disposed  to  manufactures,  as  regular 
occupations,  will  draw  from  the  agricultural  States  all  the  raw 
materials  which  they  want,  and  not  an  inconsiderable  portion  also 
of  the  necessaries  of  life;  while  the  latter  will,  in  addition  to  the 

1  House  Committee  Report  on  Domestic  Manufactures.     Annals  of   Congress, 
1815-16  (Washington,  1854),  962-4. 


312  READINGS  IN  ECONOMIC  HISTORY 

benefits  which  they  at  present  enjoy,  always  command,  in  peace  or 
in  war,  at  moderate  prices,  every  species  of  manufacture  that  their 
wants  may  require.  Should  they  be  inclined  to  manufacture  for 
themselves,  they  can  do  so  with  success,  because  they  have  all  the 
means  in  their  power  to  erect  and  to  extend  at  pleasure  manufacturing 
establishments.  Our  wants  being  supplied  by  our  own  ingenuity 
and  industry,  exportation  of  specie,  to  pay  for  foreign  manufactures, 
will  cease. 

The  value  of  American  produce,  at  this  time  exported,  will  not 
enable  the  importers  to  pay  for  the  foreign  manufacture  imported. 
Whenever  the  two  accounts  shall  be  fairly  stated,  the  balance  against 
the-  United  States  will  be  found  many  millions  of  dollars.  Such  is 
the  state  of  things,  that  the  change  must  be  to  the  advantage  of  the 
United  States.  The  precious  metals  will  be  attracted  to  them;  the 
diffusion  of  which,  in  a  regular  and  uniform  current,  through  the  great 
arteries  and  veins  of  the  body  politic,  will  give  to  each  member  health 
and  vigor. 

In  proportion  as  the  commerce  of  the  United  States  depends  on 
agriculture  and  manufactures  as  a  common  basis,  will  it  increase  and 
become  independent  of  those  revolutions  and  fluctuations,  which 
the  ambition  and  jealousy  of  foreign  Governments  are  too  apt  to 
produce.  Our  navigation  will  be  quickened;  and  supported  as  it 
will  be  by  internal  resources,  never  before  at  the  command  of  any 
nation,  will  advance  to  the  extent  of  those  resources. 

New  channels  of  trade  to  enterprise,  no  less  important  than 
productive,  are  opening,  which  can  be  secured  only  by  a  wise  and 
prudent  policy  appreciating  their  advantage. 

If  want  of  foresight  should  neglect  the  cultivation  and  improve- 
ment of  them,  the  opportune  moment  may  be  lost,  perhaps,  for 
centuries,  and  the  energies  of  this  nation  be  thereby  prevented  from 
developing  themselves,  and  from  making  the  boon  which  is  proffered 
our  own.  By  trading  on  our  own  capital,  collisions  with  other  na- 
tions, if  they  be  not  entirely  done  away,  will  be  greatly  diminished. 

This  natural  order  of  things  exhibits  the  commencement  of  a 
new  epoch,  which  promises  peace,  security,  and  repose,  by  a  firm 
and  steady  reliance  on  the  produce  of  agriculture;  on  the  treasures 
that  are  embosomed  in  the  earth;  on  the  genius  and  ingenuity  of  our 
manufactures  and  mechanics;  and  on  the  intelligence  and  enterprise 
of  our  merchants. 

The  Government,  possessing  the  intelligence  and  the  art  of  im- 
proving the  resources  of  the  nation,  will  increase  its  efficient  powers, 


THE   TARIFF  313 

and,  enjoying  the  confidence  of  those  whom  it  has  made  happy, 
will  oppose  to  the  assailant  of  the  nation's  rights  the  true,  the  only 
invincible  aegis,  the  unity  of  will  and  strength.  Causes  producing 
war  will  be  few.  Should  war  take  place,  its  calamitous  consequences 
will  be  mitigated,  and  the  expenses  and  burdens  of  such  a  state  of 
things  will  fall  with  a  weight  less  oppressive  and  injurious  on  the 
nation.  The  expenditures  of  the  last  war  were  greatly  increased 
by  a  dependence  on  foreign  supplies.  The  prices  incident  to  such  a 
dependence  will  always  be  high. 

Had  not  our  nascent  manufacturing  establishments  increased  the 
quantity  of  commodities  at  that  time  in  demand,  the  expenditures 
would  have  been  much  greater,  and  consequences  the  most  fatal  and 
disastrous  —  alarming  even  in  contemplation  —  would  have  been  the 
fate  of  this  nation.  The  experience  of  the  past  teaches  a  lesson 
never  to  be  forgotten,  and  points  emphatically  to  the  remedy.  A 
wise  Government  should  heed  its  admonitions,  or  the  independence 
of  this  nation  will  be  exposed  to  "the  shafts  of  fortune." 

IV.  THE  TARIFF  CONTROVERSY  OF  1824 

A.    The  "American  System"  l 

Congress,  in  1816,  provided  for  a  25  per  cent,  duty  on  cottons  and  woolens,  and 
".his  rate  of  duty  was  re-established  in  1818.  At  the  earlier  date  the  members  of 
Congress  were  in  general  agreement  that  certain  manufacturing  industries  of  the 
country  needed  to  be  protected,  but  by  1824,  serious  opposition  to  this  principle 
had  risen  in  the  south  and  in  certain  sections  of  New  England. 

During  the  debates  on  the  tariff  in  1824,  the  representatives  from  these  two 
sections  very  generally  opposed,  while  those  from  the  Middle  States  and  the 
west  favored,  the  principles  of  protection.  Henry  Clay,  of  Kentucky,  laid  down 
the  principle  of  the  "American  System."  He  argued  that  the  prosperity  of  the 
whole  country  depended  on  protection.  In  his  opinion  the  system  would  provide 
not  only  work  for  laborers,  but  also  markets  for  the  farmers'  produce. 

Two  classes  of  politicians  divide  the  people  of  the  United  States. 
According  to  the  system  of  one,  the  produce  of  foreign  industry 
should  be  subjected  to  no  other  impost  than  such  as  may  be  necessary 
to  provide  a  public  revenue;  and  the  produce  of  American  industry 
should  be  left  to  sustain  itself,  if  it  can,  with  no  other  than  that  inci- 
dental protection,  in  its  competition,  at  home  as  well  as  abroad,  with 
rival  foreign  articles.  According  to  the  system  of  the  other  class, 
whilst  they  agree  that  the  imposts  should  be  mainly,  and  may,  under 
any  modification,  be  safely  relied  on  as  a  fit  and  convenient  source  of 

1  Annals  of  Congress,  1823-4  (Washington,  1856),  1962-72. 


3i4  READINGS  IN  ECONOMIC  HISTORY 

public  revenue,  they  would  so  adjust  and  arrange  the  duties  on 
foreign  fabrics  as  to  afford  a  gradual  but  adequate  protection  to 
American  industry,  and  lessen  our  dependence  on  foreign  nations,  by 
securing  a  certain,  and,  ultimately,  a  cheaper  and  better  supply  of  our 
own  wants  from  our  own  abundant  resources.  Both  classes  are  equally 
sincere  in  their  respective  opinions,  equally  honest,  equally  patriotic, 
and  desirous  of  advancing  the  prosperity  of  the  country.  .  .  . 

.  .  .  The  greatest  want  of  civilized  society  is  a  market  for  the  sale 
and  exchange  of  the  surplus  of  the  produce  of  the  labor  of  its  members. 
This  market  may  exist  at  home  or  abroad,  or  both,  but  it  must  exist 
somewhere,  if  society  prospers;  and  wherever  it  does  exist,  it  should 
be  competent  to  the  absorption  of  the  entire  surplus  of  production. 
It  is  most  desirable  that  there  should  be  both  a  home  and  a  foreign 
market.  But,  with  respect  to  their  relative  superiority,  I  cannot 
entertain  a  doubt.  The  home  market  is  first  in  order,  and  paramount 
in  importance.  .  .  . 

Both  the  inability  and  the  policy  of  foreign  Powers,  then,  forbid 
us  to  rely  upon  the  foreign  market  as  being  an  adequate  vent  for  the 
surplus  produce  of  American  labor.  Now,  let  us  see  if  this  general 
reasoning  is  not  fortified  and  confirmed  by  the  actual  experience  of 
this  country.  If  the  foreign  market  may  be  safely  relied  upon  as 
furnishing  an  adequate  demand  for  our  surplus  produce,  then  the 
official  document  will  show  a  progressive  increase,  from  year  to  year 
in  the  exports  of  our  native  produce.  ...  If,  on  the  contrary,  we 
shall  find  from  them  that,  for  a  long  term  of  past  years,  some  of  our 
most  valuable  staples  have  retrograded,  some  remained  stationary, 
and  others  advanced  but  little,  if  any,  in  amount,  with  the  exception 
of  cotton,  the  deductions  of  reason  and  the  lessons  of  experience  will 
alike  command  us  to  withdraw  our  confidence  in  the  competency  of 
the  foreign  market.  The  total  amount  of  all  our  exports  of  domestic 
produce  for  the  year,  beginning  in  1795,  and  ending  on  the  3oth 
September,  1796,  was  $40,764,097.  Estimating  the  increase  according 
to  the  ratio  of  the  increase  of  our  population,  that  is  at  4  per  cent,  per 
annum,  the  amount  of  the  exports  of  the  same  produce  in  the  year 
ending  on  the  3oth  September  last,  ought  to  have  been  $85,420,861. 
It  was  in  fact  only  $47,155,408.  Taking  the  average  of  five  years, 
from  1803  to  1807,  inclusive,  the  amount  of  native  produce  exported 
was  $43,202,751  for  each  of  those  years.  Estimating  what  it  ought  to 
have  been,  during  the  last  year,  applying  the  principle  suggested  to 
that  amount,  there  should  have  been  exported  $77,766,751,  instead 
of  $47,155,408.  .  .  . 


THE  TARIFF  315 

Is  this  foreign  market,  so  incompetent  at  present,  and  which, 
limited  as  its  demands  are,  operates  so  unequally  upon  the  productive 
labor  of  our  country,  likely  to  improve  in  future?  If  I  am  correct 
in  the  views  which  I  have  presented  to  the  Committee,  it  must  become 
worse  and  worse.  What  can  improve  it?  Europe  will  not  abandon 
her  own  agriculture  to  foster  ours.  We  may  even  anticipate  that  she 
will  more  and  more  enter  into  competition  with  us  in  the  supply  of 
the  West  India  market.  That  of  South  America,  for  articles  of 
subsistence,  will  probably  soon  vanish.  The  value  of  our  exports,  for 
the  future,  may  remain  at  about  what  it  was  last  year.  But  if  we 
do  not  create  some  new  market ;  if  we  persevere  in  the  existing  pur- 
suits of  agriculture;  the  inevitable  consequence  must  be  to  augment 
greatly  the  quantity  of  our  produce,  and  to  lessen  its  value  in  the 
foreign  market.  .  .  . 

The  creation  of  a  home  market  is  not  only  necessary  to  procure 
for  our  agriculture  a  just  reward  of  its  labors,  but  it  is  indispensable 
to  obtain  a  supply  of  our  necessary  wants.  If  we  cannot  sell,  we  can- 
not buy.  That  portion  of  our  population  (and  we  have  seen  that  it 
is  not  less  than  four-fifths)  which  makes  comparatively  nothing  that 
foreigners  will  buy,  has  nothing  to  make  purchases  with  from  for- 
eigners. It  is  in  vain  that  we  are  told  of  the  amount  of  our  exports, 
supplied  by  the  planting  interest.  They  may  enable  the  planting 
interest  to  supply  all  its  wants;  but  they  bring  no  ability  to  the 
interests  not  planting,  unless,  which  cannot  be  pretended,  the  plant- 
ing interest  was  an  adequate  vent  for  the  surplus  produce  of  the  labor 
of  all  other  interests.  It  is  in  vain  to  tantalize  us  with  the  greater 
cheapness  of  foreign  fabrics.  There  must  be  an  ability  to  purchase, 
if  an  article  be  obtained,  whatever  may  be  the  price,  high  or  IOWT,  at 
which  it  is  sold.  And  a  cheap  article  is  as  much  beyond  the  grasp 
of  him  wrho  has  no  means  to  buy,  as  a  high  one.  Even  if  it  were 
true  that  the  American  manufacturer  would  supply  consumption  at 
dearer  rates,  it  is  better  to  have  his  fabrics  than  the  unattainable 
foreign  fabrics;  for  it  is  better  to  be  ill  supplied  than  not  sup- 
plied at  all.  .  .  .  But  this  home  market,  highly  desirable  as  it  is, 
can  only  be  created  and  cherished  by  the  protection  of  our  own 
legislation  against  the  inevitable  prostration  of  our  industry,  which 
must  ensue  from  the  action  of  foreign  policy  and  legislation.  The 
effect  and  the  value  of  this  domestic  care  of  our  own  interests  will 
be  obvious  from  a  few  facts  and  considerations.  Let  us  suppose 
that  half  a  million  of  persons  are  now  employed  abroad,  in  fabricating 
for  our  consumption  those  articles  of  which,  by  the  operation  of  this 


3i6  READINGS  IN  ECONOMIC  HISTORY 

bill,  a  supply  is  intended  to  be  provided  within  ourselves.  That  half 
a  million  of  persons  are,  in  effect,  subsisted  by  us;  but  their  actual 
means  of  subsistence  are  drawn  from  foreign  agriculture.  If  we  could 
transport  them  to  this  country,  and  incorporate  them  in  the  mass  of 
our  own  population,  there  would  instantly  arise  a  demand  for  an 
amount  of  provisions  equal  to  that  which  would  be  requisite  for  their 
subsistence  throughout  the  whole  year.  That  demand,  in  the  article 
of  flour  alone,  wrould  not  be  less  than  the  quantity  of  about  000,000 
barrels,  besides  a  proportionate  quantity  of  beef  and  pork,  and  other 
articles  of  subsistence.  But  900,000  barrels  of  flour  exceeded  the 
entire  quantity  exported  last  year,  by  nearly  150,000  barrels.  What 
activity  would  not  this  give?  What  cheerfulness  would  it  not  commu- 
nicate to  our  now  dispirited  farming  interest?  But  if,  instead  of  these 
five  hundred  thousand  artisans  emigrating  from  abroad,  we  give,  by 
this  bill,  employment  to  an  equal  number  of  our  own  citizens  now 
engaged  in  unprofitable  agriculture,  or  idle,  from  the  want  of  business, 
the  beneficial  effect  upon  the  productions  of  our  farming  labor  would 
be  nearly  doubled.  The  quantity  would  be  diminished  by  a  sub- 
traction of  the  produce  from  the  labor  of  all  those  who  should  be 
diverted  from  its  pursuits  to  manufacturing  industry,  and  the  value 
of  the  residue  would  be  enhanced,  both  by  that  diminution  and  the 
creation  of  the  home  market  to  the  extent  supposed. 

B.    A  New  Englander's  Views  on  Protection  l 

Daniel  Webster  of  Massachusetts  opposed  a  protective  tariff  at  this  time,  and 
he  gave  two  reasons  for  so  doing  as  follows: 

Being  intrusted  with  the  interests  of  a  district  highly  commercial, 
and  deeply  interested  in  manufactures  also,  I  wish  to  state  my  opinions 
on  the  present  measure;  not  as  on  a  whole,  for  it  has  no  entire  and 
homogeneous  character;  but  as  on  a  collection  of  different  enact- 
ments, some  of  which  meet  my  approbation,  and  some  of  which 
do  not.  .  .  . 

.  .  .  [I]n  the  first  place,  what  is  the  condition  of  our  commerce? 
Here  we  must  clearly  perceive  that  it  is  not  enjoying  that  rich  harvest 
which  fell  to  its  fortune  during  the  continuance  of  the  European  wars. 
It  has  been  greatly  depressed,  and  limited  to  small  profits.  Still,  it 
is  elastic  and  active,  and  seems  capable'  of  recovering  itself  in  some 


1  Annals   of  Congress,   1823-4    (Washington,    1856),    2027,   2034-5,  2053-4, 
2056-7. 


THE  TARIFF  317 

measures  from  its  depression.  The  shipping  interest,  also,  has  suffered 
severely,  still  more  severely,  probably,  than  commerce.  If  anything 
should  strike  us  with  astonishment,  it  is  that  the  navigation  of  the 
United  States  should  be  able  to  sustain  itself.  Without  any  govern- 
ment protection  whatever,  it  goes  abroad  to  challenge  competition 
with  the  whole  world;  and,  in  spite  of  all  obstacles,  it  has  yet  been 
able  to  maintain  800,000  tons  in  the  employment  of  foreign  trade. 
How,  sir,  do  the  ship-owners  and  navigators  accomplish  this?  How 
is  it  that  they  are  able  to  meet,  and  in  some  measure  overcome, 
universal  competition?  Not,  sir,  by  protection  and  bounties,  but 
by  unwearied  exertion,  by  extreme  economy,  by  unshaken  persever- 
ance, by  that  manly  and  resolute  spirit  which  relies  on  itself  to  pro- 
tect itself.  These  causes  alone  enable  American  ships  still  to  keep 
their  element,  and  show  the  flag  of  their  country  in  distant  seas.  .  .  . 
I  need  not  say  that  the  navigation  of  the  country  is  essential  to 
its  honor  and  its  defense.  Yet,  instead  of  proposing  benefit  for  it  in 
this  hour  of  its  depression,  we  propose  by  this  measure  to  lay  upon 
it  new  and  heavy  burdens.  In  the  discussion,  the  other  day,  of  that 
provision  of  the  bill  which  proposes  to  tax  tallow  for  the  benefit  of 
the  oil  merchants  and  whalemen,  we  had  the  pleasure  of  hearing 
eloquent  eulogiums  upon  that  portion  of  our  shipping  employed  in 
the  whale  fishery,  and  strong  statements  of  its  importance  to  the  public 
interest.  But  the  same  bill  proposes  a  severe  tax  upon  that  interest 
for  the  benefit  of  the  iron  manufacturer  and  the  hemp  grower.  So 
that  the  tallow  chandlers  and  soapboilers  are  sacrificed  to  the  oil 
merchants,  in  order  that  these  again  may  contribute  to  the  manu- 
facturers of  iron  and  the  growers  of  hemp. 

If  such  be  the  state  of  our  commerce  and  navigation,  what  is 
the  condition  of  our  home  manufactures?  How  are  they  amidst  the 
general  depression  ?  Do  they  need  further  protection  ?  and  if  any, 
how  much  ?  On  all  these  points,  we  have  had  much  general  state- 
ment, but  little  precise  information.  In  the  very  elaborate  speech 
of  Mr.  Speaker,  [Henry  Clay  of  Kentucky]  we  are  not  supplied  with 
satisfactory  grounds  of  judging  in  these  various  particulars.  Who 
can  tell,  from  anything  yet  before  the  committee,  whether  the  pro- 
posed duty  be  too  high  or  too  low,  on  any  one  article  ?  Gentlemen 
tell  us  that  they  are  in  favor  of  domestic  industry ;  so  am  I.  They 
would  give  it  protection ;  so  would  I.  But  then  all  domestic  industry 
is  not  confined  to  manufactures.  The  employments  of  agriculture, 
commerce,  and  navigation,  are  all  branches  of  the  same  domestic 
industry;  they  all  furnish  employment  for  American  capital  and 


3i8  READINGS  IN  ECONOMIC  HISTORY 

American  labor.  And  when  the  question  is,  whether  new  duties 
shall  be  laid,  for  the  purpose  of  giving  further  encouragement  to 
particular  manufactures,  every  reasonable  man  must  ask  himself, 
both,  whether  the  proposed  new  encouragement  be  necessary,  and, 
whether  it  can  be  given  without  injustice  to  other  branches  of 
industry.  ... 

I  will  now  proceed,  sir,  to  state  some  objections  which  I  feel, 
of  a  more  general  nature,  to  the  course  of  Mr.  Speaker's  obser- 
vations. 

He  seems  to  me  to  argue  the  question  as  if  all  domestic  industry 
were  confined  to  the  production  of  manufactured  articles;  as  if  the 
employment  of  our  own  capital,  and  our  own  labor,  in  the  occupations 
of  commerce  and  navigation,  were  not  as  emphatically  domestic 
industry  as  any  other  occupation.  Some  other  gentlemen,  in  the 
course  of  the  debate,  have  spoken  of  the  price  paid  for  every  foreign 
manufactured  article,  as  so  much  given  for  the  encouragement  of 
foreign  labor,  to  the  prejudice  of  our  own.  But  is  not  every  such 
article  the  product  of  our  own  labor  as  truly  as  if  we  had  manufac- 
tured it  ourselves?  Our  labor  has  earned  it,  and  paid  the  price  for 
it.  It  is  so  much  added  to  the  stock  of  national  wealth.  If  the  com- 
modity were  dollars,  nobody  would  doubt  the  truth  of  this  remark: 
and  it  is  precisely  as  correct  in  its  application  to  any  other  commodity 
as  to  silver.  One  man  makes  a  yard  of  cloth  at  home;  another 
raises  agricultural  products,  and  buys  a  yard  of  imported  cloth. 
Both  these  are  equally  the  earnings  of  domestic  industry,  and  the  only 
questions  that  arise  in  the  case  are  two :  the  first  is,  wyhich  is  the  best 
mode,  under  all  the  circumstances,  of  obtaining  the  article;  the  second 
is,  how  far  this  first  question  is  proper  to  be  decided  by  the  government, 
and  how  far  it  is  proper  to  be  left  to  individual  discretion.  There  is 
no  foundation  for  the  distinction  which  attributes  to  certain  employ- 
ments the  peculiar  appellation  of  American  industry;  and  it  is,  in 
my  judgment,  extremely  unwise,  to  attempt  such  discrimina- 
tions. .  .  . 

Let  me  now  ask,  sir,  what  relief  this  bill  proposes  to  some  of  those 
great  and  essential  interests  of  the  country,  the  condition  of  which 
has  been  referred  to  as  proof  of  national  distress;  and  which  con- 
dition, although  I  do  not  think  it  makes  out  a  case  of  distress,  yet 
does  indicate  depression. 

And  first,  as  to  our  foreign  trade.  The  Speaker  has  stated 
that  there  has  been  a  considerable  falling  off  in  the  tonnage  em- 
ployed in  that  trade.  This  is  true,  lamentably  true.  In  my  opinion, 


THE   TARIFF  319 

it  is  one  of  those  occurrences  which  ought  to  arrest  our  immediate, 
our  deep,  our  most  earnest  attention.  What  does  this  bill  propose 
for  its  relief?  Sir,  it  proposes  nothing  but  new  burdens.  It  pro- 
poses to  diminish  its  employment,  and  it  proposes,  at  the  same  time, 
to  augment  its  expense,  by  subjecting  it  to  heavier  taxation.  Sir, 
there  is  no  interest,  in  regard  to  which  a  stronger  case  for  protection 
can  be  made  out,  than  the  navigating  interest.  Whether  we  look  at 
its  present  condition,  which  is  admitted  to  be  depressed;  the  number 
of  persons  connected  with  it,  and  dependent  upon  it  for  their  daily 
bread;  or  its  importance  to  the  country  in  a  political  point  of  view, 
it  has  claims  upon  our  attention  which  cannot  be  exceeded.  But 
what  do  we  propose  to  do  for  it?  I  repeat,  sir,  simply  to  burden  and 
to  tax  it.  By  a  statement  which  I  have  already  submitted  to  the 
Committee,  it  appears  that  the  shipping  interest  pays,  annually, 
more  than  half  a  million  of  dollars  in  duties  on  articles  used  in  the  con- 
struction of  ships.  We  propose  to  add  nearly,  or  quite,  fifty  per  cent. 
to  this  amount,  at  the  very  moment  that  we  bring  forth  the  languish- 
ing state  of  this  interest,  as  a  proof  of  national  distress.  Let  it  be 
remembered  that  our  shipping  employed  in  foreign  commerce,  has, 
at  this  moment,  not  the  shadow  of  government  protection.  It  goes 
abroad  upon  the  wide  sea  to  make  its  own  way,  and  earn  its  own 
bread,  in  a  professed  competition  with  the  whole  world.  Its  resources 
are  its  own  frugality,  its  own  skill,  its  owrn  enterprise.  It  hopes  to 
succeed,  if  it  shall  succeed  at  all,  not  by  extraordinary  aid  of  govern- 
ment, but  by  patience,  vigilance,  and  toil.  This  right  arm  of  the 
nation's  safety  strengthens  its  own  muscles  by  its  own  efforts,  and  by 
unwearied  exertion  in  its  own  defense  becomes  strong  for  the  defense 
of  the  country. 

No  one  acquainted  with  this  interest  can  deny  that  its  situation, 
at  this  moment,  is  extremely  critical.  We  have  left  it  hitherto  to 
maintain  itself  or  perish;  to  swim  if  it  can,  and  to  sink  if  it  cannot. 
But  at  this  moment  of  its  apparent  struggle,  can  we,  as  men,  can  we, 
as  patriots,  add  another  stone  to  the  weight  that  threatens  to  carry 
it  down?  Sir,  there  is  a  limit  to  human  power  and  to  human  effort. 
I  know  the  commercial  marine  of  this  country  can  do  almost  every- 
thing, and  bear  almost  everything.  Yet  some  things  are  impossible 
to  be  done;  and  some  burdens  may  be  impossible  to  be  borne;  and  as 
it  was  the  last  ounce  that  broke  the  back  of  the  camel,  so  the  last  tax, 
although  it  were  even  a  small  one,  may  be  decisive  as  to  the  power  of 
our  marine  to  sustain  the  conflict  in  which  it  is  now  engaged  with 
all  the  commercial  nations  on  the  globe. 


320  READINGS  IN  ECONOMIC  HISTORY 

C.   A  Southern  View  on  the  Tariff 1 

The  southern  representatives  very  generally  opposed  the  protective  tariff.  One 
of  them,  George  McDuffie,  of  South  Carolina,  spoke  against  it  as  follows: 

Looking  to  the  operation  of  this  measure  upon  the  different  classes 
of  the  community,  it  may  be  fairly  stated  as  its  general  result,  that  it 
will  sacrifice  the  laboring  classes  for  the  benefit  of  the  capitalists. 
And  when  I  say  capitalists,  I  include  as  well  those  who  employ  capital 
in  some  of  the  products  of  agriculture,  as  in  manufactures.  You 
propose  to  protect,  by  duties,  not  only  manufactures,  but  wool, 
hemp,  and  even  grain.  Ridiculous  as  the  duty  upon  this  last  article 
is,  it  serves  admirably  to  illustrate  the  genius  of  the  system. 

Although  the  manufacturing  interest  makes  the  most  prominent 
figure  in  this  scheme  of  protection,  the  question  is  no  longer  between 
the  manufacturing  and  agricultural  interests,  but  between  all  those 
who  produce  more  than  they  consume  of  the  articles  subject  to  duty, 
and  those  who  purchase  that  surplus  production.  From  this  it  is 
obvious,  that  but  a  very  small  part  of  the  community  can  enjoy 
the  benefit  of  this  system,  which  operates  as  a  permanent  tax  upon 
the  remainder.  As  to  the  manufacturers  we  know  their  number  is 
exceedingly  small  in  comparison  with  the  aggregate  of  our  population. 
But  the  smallness  of  the  number  of  farmers  who  can  be  benefited  by 
this  bill,  is  not  so  obvious.  There  exists  a  delusion  on  this  point, 
which  is  easily  removed.  It  is  supposed  that  the  great  mass  of  the 
farmers  will  participate  in  the  bounties  provided.  But  every  prac- 
tical observer  must  know,  in  relation  to  wool,  for  example,  that  a 
great  majority  of  the  farmers  can  produce  no  more  than  they  consume 
in  their  own  families.  It  will  be  the  more  wealthy  farmers,  there- 
fore, who  will  realize  the  advantages,  such  as  they  may  be,  of  this 
compromise  \vith  the  manufacturers,  while  the  small  farmers  and  the 
whole  class  of  mere  laborers  will  be  compelled  to  bear  the  burdens  of 
the  system,  such  as  they  certainly  are,  without  the  slightest  equivalent. 

No  man  has  pretended,  no  man  will  venture  to  assert,  that  the 
price  of  labor  will  be  increased  by  this  measure.  That,  sir,  the  thing 
which  most  deserves  encouragement,  is  left  unbountied  to  its  fate. 
I  do  pronounce  it,  that  this  is  a  combination,  not  only  of  the  few 
against  the  many,  but  of  the  wealthy  against  the  poor;  we  take  from 
those  who  have  not,  and  give  to  those  who  have.  I  speak  with  studied 
precision  when  I  say,  that  those  who  consume  what  they  do  not  make, 


1  Annals  of  Congress,  1823-4  (Washington,  1856),  2421,  2426. 


THE   TARIFF  321 

are  taxed  for  the  benefit  of  those  who  make  what  they  do  not  consume. 
These  are  the  true  antagonist  powers  of  this  system.  .  .  . 

It  would  be  some  consolation  to  me,  sir,  if  I  could  believe  that  the 
heavy  impositions,  which  must  operate  so  oppressively  upon  the  part 
of  the  Union  I  have  the  honor  to  represent,  would  produce  an  equiva- 
lent benefit  to  other  portions  of  the  Union.  If  my  constituents 
must  be  sacrificed,  it  would  in  some  degree  soothe  their  injured  feel- 
ings, if  they  could  have  this  excuse,  at  least,  for  quietly  submitting 
to  their  fate,  hard  as  it  is,  and  unjust  as  they  believe  it  to  be.  But 
even  this  humble  consolation  is  denied  us.  We  are  doomed  to  suffer, 
under  a  clear  conviction  that  our  sufferings  will  administer  no  relief 
to  the  distresses,  whether  real  or  imaginary,  of  any  portion  of  our 
fellow-citizens.  We  are  to  be  made  the  victims  of  a  system  "which 
not  enricheth  them,  but  makes  us  poor  indeed" — a  system  which 
wages  war,  not  against  our  enemies,  but  our  friends;  not  against  the 
hostile  regulations  of  other  countries,  but  against  the  advantages  of 
our  natural  position  in  the  world,  and  the  munificent  bounties  of  an 
all-wise  Providence  —  a  system  which  has  originated  in  discontent, 
and  must  inevitably  end  in  disappointment.  .  .  . 

V.   FREE  TRADE  ARGUMENTS 

Memorial  on  Free  Trade,  i8ji  l 

After  the  passage  of  the  "  abomination  "  tariff  bill  in  1828,  those  opposed  to  the 
system  set  about  to  educate  public  opinion  as  to  the  merits  of  free  trade.  Ac- 
cordingly, in  1831,  a  free  trade  convention  \f&s  held  in  the  city  of  Philadelphia, 
a.nd  at  its  request  a  free  trade  memorial  was  drawn  up  by  Albert  Gallatin  and 
presented  to  Congress.  The  important  parts  of  this  memorial  are  as  follows: 

We  are  not  called  upon  to  discuss  the  abstract  question,  whether 
ttnother  mode  of  taxation  would  be  more  eligible  than  the  impost,  or 
whether  an  unrestrained  intercourse  between  all  nations,  free  of  the 
payment  of  any  duties  on  imports,  would  be  best  calculated  to  pro- 
mote the  industry  and  prosperity  of  all.  On  that  subject,  the  experi- 
ence of  forty  years  is  conclusive  so  far  as  relates  to  the  United  States. 
The  people  prefer,  in  time  of  peace,  duties  raised  on  the  importation 
of  foreign  merchandise,  to  any  internal  tax,  direct  or  indirect.  Whether 
for  good  or  for  evil,  that  system  affords  an  encouragement  to  domestic 
manufactures  not  less  efficient  for  being  incidental.  Duties  on  imports, 
amounting  on  an  average  to  about  20  per  cent,  on  the  value,  appear 

1  Gallatin' s  Free  Trade  Memorial.  Senate  Documents,  1831-2  (Washington, 
1832),  I,  Doc.  55,  pp.  6-8,  n. 


322  READINGS  IN  ECONOMIC  HISTORY 

necessary  to  the  support  of  Government.  Although  they  may,  to  that 
extent,  by  diverting  national  industry  from  its  natural  channels, 
render  it  less  productive;  although  they  may,  to  that  extent,  lay  a 
tax  on  the  consumers  in  addition  to  that  which  is  paid  to  Govern- 
ment; although  they  operate  unequally  on  different  sections  of  the 
country;  all  your  memorialists  ask,  is,  that  the  evil  shall  not  be  aggra- 
vated by  an  inequality  in  the  rates  of  duty.  The  question  then  at 
issue  is,  simply  whether  the  amount  wanted  shall  be  so  raised  as  to  fall 
equally  upon  all  the  consumers,  or,  in  other  words,  on  the  community, 
and  so  as  to  encourage  equally  every  branch  of  industry,  or  whether 
certain  branches  shall  receive  special  protection  by  high  and  some- 
times prohibitory  duties.  .  .  . 

Let  it,  however,  be  recollected,  that  even  the  general  benefit  aris- 
ing to  the  country  at  large,  may  not  always  be  a  sufficient  justification 
of  great  and  important  deviations  from  the  equal  and  uniform  system 
of  taxation.  A  government  which  acknowledges  the  principle  that 
no  individual  can  be  divested  of  his  property  for  public  purposes 
without  indemnity,  cannot  claim  the  right  to  do  that  indirectly,  which 
it  is  forbidden  to  do  directly.  A  system  calculated  to  lay  permanent 
burdens,  greatly  unequal  and  oppressive  on  some  classes  of  society, 
or  on  a  particular  section  of  the  country,  would  be  radically  unjust, 
and  altogether  indefensible,  even  though  it  might  be,  attended  with 
some  advantages  to  the  community,  considered  as  a  whole.  But 
whether  such  advantages  are  in  fact  realized;  whether,  on  any  sup- 
position, they  ever  can  produce  a  profit  equal  to  the  actual  national 
loss  arising  even  from  the  indispensable  duty  of  20  to  25  per  cent., 
must  be  first  examined. 

It  is  self-evident  that  the  industry  of  a  country  is  most  profitably 
employed,  or,  in  other  words,  that  a  country  acquires  the  greatest 
wealth,  and  its  general  prosperity  is  most  advanced,  in  proportion  as 
its  capital  and  labor  are  most  productive. 

It  is  not  less  obvious  that,  if  a  given  amount  of  capital  and  labor 
produces  in  the  same  time,  a  less  quantity  of  a  certain  commodity 
than  could  have  been  purchased  with  that  quantity  of  another  article 
which  might  have  been  produced  in  the  same  time  by  the  same  amount 
of  capital  and  labor,  there  has  been  a  misapplication  of  such  capital 
and  labor,  and  a  national  loss  equal  to  the  difference  between  the 
quantity  produced,  and  that  which  might  have  been  purchased,  with 
the  proceeds  of  the  same  capital  and  labor  otherwise  applied. 

If  the  price  at  which  a  commodity  can  be  afforded  by  the  person 
who  undertakes  to  produce  it  is  higher  than  that  at  which  it  may  be, 


THE  TARIFF  323 

or  might  have  been  purchased  from  others,  the  difference  of  price  is 
the  measure  of  the  national  loss  incurred  by  his  misapplication  of 
capital  and  labor  to  the  production  of  that  commodity.  .  .  . 

The  difference  between  the  price  at  which  a  manufacturer  can 
afford  to  sell  the  whole  amount  of  the  commodities  produced  by  him 
in  one  year,  and  that  at  which  the  same  quantity  of  the  same  articles 
may  be,  or  might  have  been,  purchased  from  others,  is  therefore 
equal  to  the  annual  national  profit  or  loss  resulting  from  his  appli- 
cation of  capital  and  labor  to  that  instead  of  any  other  branch  of 
industry. 

When  the  new  manufacturer  has  to  compete  with  others  of  the 
same  country,  or,  if  there  is  no  duty  on  imports,  with  foreign  manu- 
facturers, as  it  is  impossible  for  him  to  sell  cloth  of  the  same  quality 
at  a  higher  price  than  it  can  be  obtained  from  others,  the  loss  must 
necessarily  fall  on  him.  This  is  not  the  less  a  public  loss  on  that 
account.  On  whomsoever  this  may  fall,  a  diminution  of  the  quantity 
or  exchangeable  value  of  the  commodities  which,  with  the  same 
capital  and  labor,  otherwise  applied,  might  have  been  produced,  is 
so  much  retrenched  from  what  would  otherwise  have  been  an  accumu- 
lation of  capital  or  national  wealth.  .  .  . 

It  is  impossible  that  the  state  of  the  country  should  have  been 
such  as  that  its  capital  and  labor  could  not  have  been  more  advan- 
tageously applied,  than  to  branches  of  industry,  which,  left  to  them- 
selves, were  attended  with  actual  loss,  without  a  corresponding  great 
and  sensible  diminution  in  the  demand  for  capital  and  the  wages 
of  labor,  neither  of  which  has  been  felt.  So  long  as  those  wages 
suffer  no  diminution,  and  so  long  as  those  employed  in  commercial 
and  even  agricultural  pursuits  continue  to  borrow  large  capitals  at  the 
rate  of  six  per  cent,  a  year,  it  is  clear  proof  that  those  pursuits  afford 
profits  at  least  equal  to  that  rate  of  interest,  and  that  an  application 
of  capital  and  labor  to  the  production  of  objects,  on  which,  if  not 
artificially  protected,  a  loss  is  experienced,  is  not  at  all  necessary. 


VI.  THE  TARIFF  AND  SECTIONALISM 
A  View  of  the  Situation, 


By  1832  the  issue  of  a  protective  tariff  had  become  distinctively  sectional.  The 
south  felt  that  it  was  being  discriminated  against  by  Congress.     The  southern 


1  Thirty  Years'  View.     By  Thomas   H.    Benton  (New  York,  1854-6),  I,  97, 


324  READINGS  IN  ECONOMIC  HISTORY 

states  lagged  behind  their  northern  neighbors  industrially,  and  the  protective  tariff 
was  assigned  by  their  statesmen  as  the  reason  for  this  difference  in  prosperity. 
Senator  Ben  ton  of  Missouri  put  the  claim  of  the  south  as  follows: 

The  question  of  a  protective  tariff  had  now  not  only  become 
political,  but  sectional.  In  the  early  years  of  the  federal  government 
it  was  not  so.  The  tariff  bills,  as  the  first  and  the  second  that  were 
passed,  declared  in  their  preambles  that  they  were  for  the  encourage- 
ment of  manufactures,  as  well  as  for  raising  revenue;  but  then  the 
duties  imposed  were  all  moderate  —  such  as  a  revenue  system  really 
required;  and  there  were  no  "minimums,"  to  make  a  false  basis  for 
the  calculation  of  duties,  by  enacting  that  all  which  cost  less  than  a 
certain  amount  should  be  counted  to  have  cost  that  amount;  and  be 
rated  at  the  custom-house  accordingly.  In  this  early  period  the 
Southern  States  were  as  ready  as  any  part  of  the  Union  in  extending 
the  protection  to  home  industry  which  resulted  from  the  imposition 
of  revenue  duties  on  rival  imported  articles,  and  on  articles  necessary 
to  ourselves  in  time  of  war;  and  some  of  her  statesmen  were  amongst 
the  foremost  members  of  Congress  in  promoting  that  policy.  As 
late  as  1816,  some  of  her  statesmen  were  still  in  favor  of  protection, 
not  merely  as  an  incident  to  revenue,  but  as  a  substantive  object: 
and  among  these  was  Mr.  Calhoun,  of  South  Carolina  —  who  even 
advocated  the  minimum  provision  —  then  for  the  first  time  intro- 
duced into  a  tariff  bill,  and  upon  his  motion  —  and  applied  to  the 
cotton  goods  imported.  After  that  year  (1816)  the  tariff  bills  took  a 
sectional  aspect  —  the  Southern  States,  with  the  exception  of  Loui- 
siana (led  by  her  sugar-planting  interest),  against  them:  the  New 
England  States  also  against  them:  the  Middle  and  Western  States 
for  them.  After  1824  the  New  England  States  (always  meaning  the 
greatest  portion  when  a  section  is  spoken  of)  classed  with  the  pro- 
tective States  —  leaving  the  South  alone,  as  a  section,  against  that 
policy.  .  .  . 

Allusions  were  constantly  made  [in  the  debates]  to  the  combination 
of  manufacturing  capitalists  and  politicians  in  pressing  this  bill. 
There  was  evidently  foundation  for  the  imputation.  The  scheme 
of  it  had  been  conceived  in  a  convention  of  manufacturers  in  the  State 
of  Pennsylvania,  and  had  been  taken  up  by  politicians,  and  was  pushed 
as  a  party  measure,  and  with  the  visible  purpose  of  influencing  the 
presidential  election.  In  fact  these  tariff  bills,  each  exceeding  the 
other  in  its  degree  of  protection,  had  become  a  regular  appendage  of 
our  presidential  elections  —  coming  round  in  every  cycle  of  four  years, 
with  that  returning  event.  The  year  1816  was  the  starting  point: 


THE   TARIFF  325 

1820,  and  1824,  and  now  1828,  having  successively  renewed  the 
measure,  with  successive  augmentations  of  duties.  The  South  be- 
lieved itself  impoverished  to  enrich  the  North  by  this  system;  and 
certainly  a  singular  and  unexpected  result  had  been  seen  in  these 
two  sections.  In  the  colonial  state,  the  Southern  were  the  rich  part 
of  the  colonies,  and  expected  to  do  well  in  a  state  of  independence. 
They  had  the  exports,  and  felt  secure  of  their  prosperity:  not  so  of 
the  North,  whose  agricultural  resources  were  few,  and  who  expected 
privations  from  the  loss  of  British  favor.  But  in  the  first  half  cen- 
tury after  Independence  this  expectation  was  reversed.  The  wealth 
of  the  North  was  enormously  aggrandized:  that  of  the  South  had 
declined.  Northern  towns  had  become  great  cities:  Southern  cities 
had  decayed,  or  become  stationary;  and  Charleston,  the  principal 
port  of  the  South,  was  less  considerable  than  before  the  Revolution. 
The  North  became  a  money-lender  to  the  South,  and  southern  citi- 
zens made  pilgrimages  to  northern  cities,  to  raise  money  upon  the 
hypothecation  of  their  patrimonial  estates.  And  this  in  the  face  of 
a  southern  export  since  the  Revolution  to  the  value  of  eight  hundred 
millions  of  dollars !  —  a  sum  equal  to  the  product  of  the  Mexican 
mines  since  the  days  of  Cortez!  and  twice  or  thrice  the  amount  of 
their  product  in  the  same  fifty  years.  The  Southern  States  attributed 
this  result  to  the  action  of  the  federal  government  —  its  double 
action  of  levying  revenue  upon  the  industry  of  one  section  of  the 
Union  and  expending  it  in  another  —  and  especially  to  its  protective 
tariffs.  To  some  degree  this  attribution  was  just,  but  not  to  the 
degree  assumed;  which  is  evident  from  the  fact  that  the  protective 
system  had  then  only  been  in  force  for  a  short  time  —  since  the  year 
1816;  and  the  reversed  condition  of  the  two  sections  of  the  Union 
had  commenced  before  that  time.  Other  causes  must  have  had  some 
effect:  but  for  the  present  we  look  to  the  protective  system;  and, 
without  admitting  it  to  have  done  all  the  mischief  of  which  the  South 
complained,  it  had  yet  done  enough  to  cause  it  to  be  condemned  by 
every  friend  to  equal  justice  among  the  States  —  by  every  friend  to 
the  harmony  and  stability  of  the  Union  —  by  all  who  detested  sec- 
tional legislation  —  by  every  enemy  to  the  mischievous  combination 
of  partisan  politics  with  national  legislation.  And  this  was  the  feeling 
with  the  mass  of  the  democratic  members  who  voted  for  the  tariff 
of  1828,  and  who  were  determined  to  act  upon  that  feeling  upon  the 
overthrow  of  the  political  party  which  advocated  the  protective 
system;  and  which  overthrow  they  believed  to  be  certain  at  the 
ensuing  presidential  election. 


326  READINGS  IN  ECONOMIC  HISTORY 

VII.  A  TEMPORARY  ADJUSTMENT  OF  CONFLICTING  INTERESTS 

The  Compromise  Tariff  of  1833 l 

South  Carolina's  opposition  to  the  tariff  measure  of  1832,  and  her  threat  to  with- 
draw from  the  Union  unless  the  tariff  was  modified,  caused  Congress  in  1833  to 
lower  the  duties  on  imported  articles.  Mr.  Clay  brought  forward  a  compromise 
measure,  in  which,  many  of  his  friends  declared,  he  abandoned  his  American  system. 
Clay,  himself,  denied  that  such  was  the  case;  he  insisted  that  a  modification  of 
the  tariff  would  not  destroy  the  system,  but  save  it;  that  it  would  allay  distrust 
and  allow  time  for  its  principles  to  become  known  throughout  the  country.  Por- 
tions of  Mr.  Clay's  speech  are  as  follows : 

In  presenting  the  modification  of  the  tariff  laws  which  I  am  about 
to  submit,  I  have  two  great  objects  in  view.  My  first  object  looks  to 
the  tariff.  I  am  compelled  to  express  the  opinion,  formed  after  the 
most  deliberate  reflection,  and  on  a  full  survey  of  the  whole  country, 
that,  whether  rightfully  or  wrongfully,  the  tariff  stands  in  imminent 
danger.  .  .  .  The  fall  of  the  policy,  sir,  would  be  productive  of  conse- 
quences calamitous  indeed.  When  I  look  to  the  variety  of  interests 
which  are  involved,  to  the  number  of  individuals  interested,  the 
amount  of  capital  invested,  the  value  of  the  buildings  erected,  and 
the  whole  arrangement  of  the  business  for  the  prosecution  of  the 
various  branches  of  the  manufacturing  art  which  have  sprung  up 
under  the  fostering  care  of  this  government,  I  cannot  contemplate 
any  evil  equal  to  the  sudden  overthrow  of  all  those  interests.  His- 
tory can  produce  no  parallel  to  the  extent  of  the  mischief  which  would 
be  produced  by  such  a  disaster.  .  .  . 

It  is  well  known  that  the  majority  of  the  dominant  party  is  ad- 
verse to  the  tariff.  .  .  .  But  for  the  exertions  of  the  other  party,  the 
tariff  would  have  been  long  since  sacrificed.  Now  let  us  look  at  the 
composition  of  the  two  branches  of  Congress  at  the  next  session. 
In  this  body  we  lose  three  friends  of  the  protective  policy,  without 
being  sure  of  gaining  one.  Here,  judging  from  the  present  appearances, 
we  shall,  at  the  next  session,  be  in  the  minority.  In  the  House  it 
is  notorious  that  there  is  a  considerable  accession  to  the  number  of 
the  dominant  party.  How,  then,  I  ask,  is  the  system  to  be  sustained 
against  numbers,  against  the  whole  weight  of  the  administration, 
against  the  united  South,  and  against  the  increased  impending  danger 
or  civil  war?  .  .  . 

...  I  have  been  represented  as  the  father  of  this  system,  and  I 
am  charged  with  an  unnatural  abandonment  of  my  own  offspring. 

1  Congressional  Debates,  1832-3  (Washington,  1833),  462,  733. 


THE   TARIFF  327 

I  have  never  arrogated  to  myself  any  such  intimate  relation  to  it. 
I  have,  indeed,  cherished  it  with  parental  fondness,  and  my  affection 
is  undiminished.  But  in  what  condition  do  I  find  this  child?  It  is  in 
the  hands  of  the  Philistines,  who  would  strangle  it.  I  fly  to  its 
rescue,  to  snatch  it  from  their  custody,  and  to  place  it  on  a  bed  of 
security  and  repose  for  nine  years,  where  it  may  grow  and  strengthen, 
and  become  acceptable  to  the  whole  people.  I  behold  a  torch  about 
being  applied  to  a  favorite  edifice,  and  I  would  save  it,  if  possible,  before 
it  was  wrapt  in  flames,  or  at  least  preserve  the  precious  furniture  which 
it  contains.  I  wish  to  see  the  tariff  separated  from  the  politics  of 
the  country,  that  business  men  may  go  to  work  in  security,  with  some 
prospect  of  stability  in  our  laws,  and  without  everything  being  staked 
on  the  issue  of  elections,  as  it  were  on  the  hazards  of  the  die. 


VIII.   REACTION  FROM  PROTECTION 

Arguments  for  Lower  Duties  on  Imports, 

The  Compromise  Tariff  Act  of  1833  provided  that  the  duties  exceeding  20  per 
cent,  should  be  reduced  gradually  until  on  July  i,  1842,  they  should  be  at  a  uni- 
form level  of  20  per  cent.  By  that  time,  however,  the  Whigs  were  in  power, 
and  as  soon  as  the  term  of  the  Compromise  had  been  fulfilled,  they  imposed  a 
protective  tariff  similar  to  the  one  of  1832.-  In  1844  the  Democrats  were  suc- 
cessful; and  that  party  was  pledged  to  lower  the  tariff.  Accordingly,  Secretary  of 
the  Treasury,  Robert  J.  Walker,  in  his  annual  report  proposed  to  Congress  a  radical 
reduction  in  the  tariff,  and  the  arguments  supporting  his  proposal  were  as  follows: 

The  receipts  for  the  first  quarter  of  this  year  are  less,  by  $2,011,- 
885  90,  than  the  receipts  of  the  same  quarter  last  year.  Among  the 
causes  of  decrease  is  the  progressive  diminution  of  the  importation 
of  many  highly-protected  articles,  and  the  substitution  of  rival 
domestic  products.  For  the  nine  months  ending  June  30,  1843, 
since  the  present  tariff,  the  average  of  duties  upon  dutiable  imports  was 
equal  to  37.84  -j^  per  cent.;  for  the  year  ending  June  30,  1844, 
33.85  iVper  cent.;  and  for  the  year  ending  June  30,  1845,  29.90  per 
cent.  —  showing  a  great  diminution  in  the  average  percentage, 
owing  in  part  to  increased  importation  of  some  articles  bearing  the 
lighter  duties,  and  decreased  importation  of  others  bearing  the 
higher  duty.  .  .  . 

In  suggesting  improvements  in  the  revenue  laws,  the  following 
principles  have  been  adopted: 

1  Treasury  Report,  1845  (Washington,  1846),  3-5,  7-10. 


328  READINGS  IN  ECONOMIC  HISTORY 

i st.  That  no  more  money  should  be  collected  than  is  necessary 
for  the  wants  of  the  government,  economically  administered. 

ad.  That  no  duty  be  imposed  on  any  article  above  the  lowest 
rate  will  yield  the  largest  amount  of  revenue. 

3d.  That  below  such  rate  discrimination  may  be  made,  descending 
in  the  scale  of  duties;  or,  for  imperative  reasons,  the  article  may  be 
placed  in  the  list  of  those  free  from  all  duty. 

4th.  That  the  maximum  revenue  duty  should  be  imposed  on 
luxuries. 

5th.  That  all  minimums,  and  all  specific  duties,  should  be  abol- 
ished, and  ad  valorem  duties  substituted  in  their  place  —  care  being 
taken  to  guard  against  fraudulent  invoices  and  under-valuation,  and 
to  assess  the  duty  upon  the  actual  market  value. 

6th.  That  the  duty  should  be  so  imposed  as  to  operate  as  equally 
as  possible  throughout  the  Union,  discriminating  neither  for  nor 
against  any  class  or  section. 

No  horizontal  scale  of  duties  is  recommended;  because  such  a 
scale  would  be  a  refusal  to  discriminate  for  revenue,  and  might  sink 
that  revenue  below  the  wants  of  the  government.  Some  articles 
will  yield  the  largest  revenue  at  duties  that  would  be  wholly  or  par- 
tially prohibitory  in  other  cases.  Luxuries,  as  a  general  rule,  will 
bear  the  highest  revenue  duties:  but  even  some  very  costly  luxuries, 
easily  smuggled,  will  bear  but  a  light  duty  for  revenue;  whilst  other 
articles,  of  great  bulk  and  weight,  will  bear  a  higher  duty  for  revenue. 
There  is  no  instance  within  the  knowledge  of  this  department  of  any 
horizontal  tariff  ever  having  been  enacted  by  any  one  of  the  nations 
of  the  world.  There  must  be  discrimination  for  revenue,  or  the  bur- 
den of  taxation  must  be  augmented,  in  order  to  bring  the  same  amount 
of  money  into  the  treasury.  It  is  difficult,  also,  to  adopt  any  arbi- 
trary maximum  to  which  an  inflexible  adherence  must  be  demanded 
in  all  cases.  Thus,  upon  brandy  and  spirits,  a  specific  duty,  varying 
as  an  equivalent  ad  valorem  from  180  to  261  per  cent.,  yields  a 
large  revenue;  yet  no  one  would  propose  either  of  these  rates  as  a 
maximum.  These  duties  are  too  high  for  revenue,  from  the  encour- 
agement they  present  for  smuggling  these  baneful  luxuries;  yet  a 
duty  of  20  per  cent,  upon  brandy  and  spirits  would  be  far  below 
the  revenue  standard,  would  greatly  diminish  the  income  on  these 
imports,  require  increased  burdens  upon  the  necessaries  of  life,  and 
would  revolt  the  moral  sense  of  the  whole  community.  There 
are  many  other  luxuries  which  will  bear  a  much  higher  duty  for 
(  revenue  than  20  per  cent.;  and  the  only  true  maximum  rs  tfcat  which 


THE  TARIFF  329 

experience  demonstrates  will  bring,  in  each  case,  the  largest  revenue 
at  the  lowest  rate  of  duty.  Nor  should  maximum  revenue  duties 
be  imposed  upon  all  articles;  for  this  would  yield  too  large  an 
income,  and  would  prevent  all  discrimination  within  the  revenue 
standard,  and  require  necessaries  to  be  taxed  as  high  as  luxuries. 
But,  whilst  it  is  impossible  to  adopt  any  horizontal  scale  of 
duties,  or  even  any  arbitrary  maximum,  experience  proves  that,  as 
a  general  rule,  a  duty  of  20  per  cent,  ad  valorem  will  yield  the 
largest  revenue.  There  are,  however,  a  few  exceptions  above,  as  well 
as  many  below  this  standard.  Thus,  whilst  the  lowest  revenue  duty 
on  most  luxuries  exceeds  20  per  cent.,  there  are  many  costly  articles 
of  small  bulk,  easily  smuggled,  which  would  bring,  perhaps,  no 
revenue  at  a  duty  as  high  as  20  per  cent.;  and  even  at  the  present 
rate  of  i\  per  cent.,  they  yield,  in  most  cases,  a  small  revenue; 
whilst  coal,  iron,  sugar,  and  molasses,  articles  of  great  bulk  and 
weight,  yielded  last  year  six  millions  of  revenue,  at  an  average 
rate  of  duty  exceeding  60  per  cent,  ad  valorem.  There  duties  are 
far  too  high  for  revenue  upon  all  these  articles,  and  ought  to  be 
reduced  to  the  revenue  standard;  but  if  Congress  desire  to  obtain 
the  largest  revenue  from  duties  on  these  articles,  those  duties, 
at  the  lowest  rate  for  revenue,  would  exceed  20  per  cent,  ad 
valorem.  .  .  . 

In  arranging  the  details  of  the  tariff,  it  is  believed  that  the  maxi- 
mum revenue  duties  should  be  imposed  upon  luxuries.  It  is  deemed 
just  that  taxation,  whether  direct  or  indirect,  should  be  as  nearly  as 
practicable  in  proportion  to  property.  If  the  whole  revenue  were 
raised  by  a  tax  upon  property,  the  poor,  and  especially  those  who 
live  by  the  wages  of  labor,  would  pay  but  a  very  small  portion  of  such 
tax;  whereas,  by  the  tariff,  the  poor,  by  the  consumption  of  various 
imports,  or  domestic  articles  enhanced  in  price  by  the  duties,  pay  a 
much  larger  share  of  the  taxes  than  if  they  were  collected  by  an  assess- 
ment in  proportion  to  property.  To  counteract,  as  far  as  possible, 
this  effect  of  the  tariff  —  to  equalize  its  operation,  and  make  it  ap- 
proximate as  nearly  as  may  be  to  a  system  of  taxes  in  proportion  to 
property  —  the  duties  upon  luxuries,  used  almost  exclusively  by  the 
rich,  should  be  fixed  at  the  highest  revenue  standard.  This  would 
not  be  discriminating  in  favor  of  the  poor,  however  just  that  might 
be  within  the  revenue  limit;  but  it  would  mitigate,  as  far  as  prac- 
ticable, that  discrimination  against  the  poor  which  results  from  every 
tariff,  by  compelling  them  to  pay  a  larger  amount  of  taxes  than  if 
assessed  and  collected  on  all  property  in  proportion  to  its  value.  In 


330  READINGS  IN  ECONOMIC  HISTORY 

accordance  with  these  principles,  it  is  believed  that  the  largest  prac- 
ticable portion  of  the  aggregate  revenue  should  be  raised  by  maximum 
revenue  duties  upon  luxuries,  whether  grown,  produced,  or  manu- 
factured at  home  or  abroad. 

An  appeal  has  been  made  to  the  poor,  by  the  friends  of  protection, 
on  the  ground  that  it  augments  the  wages  of  labor.  In  reply,  it  is 
contended  that  the  wages  of  labor  have  not  augmented  since  the  tariff 
of  1842,  and  that  in  some  cases  they  have  diminished. 

When  the  number  of  manufactories  is  not  great,  the  power  of  the 
system  to  regulate  the  wages  of  labor  is  inconsiderable;  but  as 
the  profit  of  capital  invested  in  manufactures  is  augmented  by  the 
protective  tariff,  there  is  a  corresponding  increase  of  power,  until 
the  control  of  such  capital  over  the  wages  of  labor  becomes  irresistible. 
As  this  power  is  exercised  from  time  to  time,  we  find  it  resisted  by 
combinations  among  the  working  classes,  by  turning  out  for  higher 
wages,  or  for  shorter  time;  by  trades-union;  and  in  some  countries, 
unfortunately,  by  violence  and  bloodshed.  But  the  government, 
by  protective  duties,  arrays  itself  on  the  side  of  the  manufacturing 
system,  and,  by  thus  augmenting  its  wealth  and  power,  soon  termin- 
ates in  its  favor  the  struggle  between  man  and  money  —  between 
capital  and  labor.  When  the  tariff  of  1842  was  enacted,  the  maximum 
duty  was  20  per  cent.  By  that  act,  the  average  of  duties  on  the  pro- 
tected articles  was  more  than  double.  But  the  wages  of  labor  did 
not  increase  in  a  corresponding  ratio,  or  in  any  ratio  whatever.  On 
the  contrary,  whilst  wages  in  some  cases  have  diminished,  the  prices 
of  many  articles  used  by  the  working  classes  have  greatly  appre- 
ciated. 

A  protective  tariff  is  a  question  regarding  the  enhancement  of  the 
profits  of  capital.  That  is  its  object,  and  not  to  augment  the  wages  of 
labor,  which  would  reduce  those  profits.  It  is  a  question  of  percent- 
age, and  is  to  decide  whether  money  vested  in  our  manufactures 
shall,  by  special  legislation,  yield  a  profit  of  ten,  twenty,  or  thirty  per 
cent.,  or  whether  it  shall  remain  satisfied  with  a  dividend  equal  to  that 
accruing  from  the  same  capital  invested  in  agriculure,  commerce,  or 
navigation. 

The  present  tariff  is  unjust  and  unequal,  as  well  in  its  details  as  in 
the  principles  upon  which  it  is  founded.  On  some  articles  the  duties 
are  entirely  prohibitory,  and  on  others  there  is  a  partial  prohibition. 
It  discriminates  in  favor  of  manufactures,  and  against  agriculture,  by 
imposing  many  higher  duties  upon  the  manufactured  fabric  than  upon 
the  agricultural  product  out  of  which  it  is  made.  It  discriminates 


THE   TARIFF  331 

in  favor  of  the  manufacturer,  and  against  the  mechanic,  by  many 
higher  duties  upon  the  manufacture  than  upon  the  article  made  out  of 
it  by  the  mechanic.  It  discriminates  in  favor  of  the  manufacturer, 
and  against  the  merchant,  by  injurious  restrictions  upon  trade  and 
commerce;  and  against  the  ship-building  and  navigating  interest,  by 
heavy  duties  on  almost  every  article  used  in  building  or  navigating 
vessels.  It  discriminates  in  favor  of  manufactures,  and  against  exports, 
which  are  as  truly  the  product  of  American  industry  as  manufactures. 
It  discriminates  in  favor  of  the  rich,  and  against  the  poor,  by  high 
duties  upon  nearly  all  the  necessaries  of  life,  and  by  minimums  and 
specific  duties,  rendering  the  tax  upon  the -real  value  much  higher  on 
the  cheaper  than  upon  the  finer  article. 

Minimums  are  a  fictitious  value,  assumed  by  law,  instead  of  the 
real  value;  and  the  operation  of  all  minimums  may  be  illustrated  by 
a  single  example.  Thus,  by  the  tariff  of  1842,  a  duty  of  30  per  cent,  ad 
valorem  is  levied  on  all  manufactures  of  cotton;  but  the  law  further 
provides  that  cotton  goods  "not  dyed,  colored, printed, or  stained, not 
exceeding  in  value  twenty  cents  per  square  yard,  shall  be  valued  at 
twenty  cents  per  square  yard."  If,  then,  the  real  value  of  the  cheapest 
cotton  goods  is  but  four  cents  a  square  yard,  it  is  placed  by  the  law  at 
the  false  value  of  twenty  cents  per  square  yard,  and  the  duty  levied 
on  the  fictitious  value  —  raising  it  five  times  higher  on  the  cheap 
article  consumed  by  the  poor,  than  upon  the  fine  article  purchased 
by  the  more  wealthy.  .  .  . 

At  least  two  thirds  of  the  taxes  imposed  by  the  present  tariff  are 
paid,  not  into  the  treasury,  but  to  the  protected  classes.  The  revenue 
from  imports  last  year  exceeded  twenty-seven  millions  of  dollars. 
This,  in  itself,  is  a  heavy  tax;  but  the  whole  tax  imposed  upon  the 
people  by  the  present  tariff  is  not  less  than  eighty-one  millions  of 
dollars,  —  of  which  twenty-seven  millions  are  paid  to  the  govern- 
ment upon  the  imports,  and  fifty-four  millions  to  the  protected 
classes,  in  enhanced  prices  of  similar  domestic  articles. 

This  estimate  is  based  upon  the  position  that  the  duty  is  added  to 
the  price  of  the  import,  and  also  of  its  domestic  rival.  If  the  import 
is  enhanced  in  price  by  the  duty,  so  must  be  the  domestic  rival;  for, 
being  like  articles,  their  price  must  be  the  same  in  the  same  market. 
The  merchant  advances  in  cash  the  duty  on  the  import,  and  adds  the 
duty,  with  a  profit  upon  it,  and  other  charges,  to  the  price  —  which 
must  therefore  be  enhanced  to  that  extent;  unless  the  foreign  pro- 
ducer had  first  deducted  the  duty  from  the  price.  But  this  is  impos- 
sible; for  such  now  is,  and  long  has  been,  the  superabundance  of 


332  READINGS  IN  ECONOMIC  HISTORY 

capital  and  active  competition  in  Europe,  that  a  profit  of  6  per  cent,  in 
any  business  is  sufficient  to  produce  large  investments  of  money  in  that 
business;  and  if,  by  our  tariff,  a  duty  of  40  per  cent,  be  exacted  on  the 
products  of  such  business,  and  the  foreign  producer  deducts  that  duty 
from  his  previous  price,  he  must  sustain  a  heavy  loss.  This  loss  would 
also  soon  extend  beyond  the  sales  for  our  consumption  to  sales  to  our 
merchants  of  articles  to  be  re-exported  by  them  from  our  ports  with 
a  drawback  of  the  duty,  which  would  bring  down  their  price  throughout 
the  markets  of  the  world.  But  this  the  foreign  producer  cannot 
afford.  The  duty,  therefore,  must  be  added  to  the  price,  and  paid  by 
the  consumer,  —  the  duty  'constituting  as  much  a  part  of  the  price  as 
the  cost  of  production.  .  .  . 

No  prejudice  is  felt  by  the  Secretary  of  the  Treasury  against 
manufacturers.  His  opposition  is  to  the  protective  system,  and  not 
to  classes  or  individuals.  He  doubts  not  that  the  manufacturers  are 
sincerely  persuaded  that  the  system  which  is  a  source  of  so  much 
profit  to  them  is  beneficial  also  to  the  country.  He  entertains  a  con- 
trary opinion,  and  claims  for  the  opponents  of  the  system  a  settled 
conviction  of  its  injurious  effects.  Whilst  a  due  regard  to  the  just  and 
equal  rights  of  all  classes  forbids  a  discrimination  in  favor  of  the  manu- 
factures, by  duties  above  the  lowest  revenue  limit,  no  disposition  is 
felt  to  discriminate  against  them  by  reducing  such  duties  as  operate 
in  their  favor  below  that  standard.  Under  revenue  duties,  it  is 
believed,  they  would  still  receive  a  reasonable  profit  —  equal  to  that 
realized  by  those  engaged  in  other  pursuits;  and  it  is  thought  they 
should  desire  no  more,  at  least  through  the  agency  of  governmental 
power.  Equal  rights  and  profits,  so  far  as  laws  are  made,  best  conform 
to  the  principles  upon  which  the  constitution  was  founded,  and  with 
an  undeviating  regard  to  which  all  its  functions  should  be  exercised 
—  looking  to  the  whole  country,  and  not  to  classes  or  sections. 

Soil,  climate,  and  other  causes,  vary  very  much,  in  different  coun- 
tries, the  pursuits  which  are  most  profitable  in  each ;  and  the  prosper- 
ity of  all  of  them  will  be  best  promoted  by  leaving  them,  unrestricted 
by  legislation,  to  exchange  with  each  other  those  fabrics  and  products 
which  they  severally  raise  most  cheaply.  This  is  clearly  illustrated 
by  the  perfect  free  trade  which  exists  among  all  the  States  of  the 
Union,  and  by  the  acknowledged  fact  that  any  one  of  these  States 
would  be  injured  by  imposing  duties  upon  the  products  of  the  others. 
It  is  generally  conceded  that  reciprocal  free  trade  among  nations 
would  best  advance  the  interest  of  all.  , 


THE  TARIFF  333 

IX.    ARGUMENTS  FOR  PROTECTION 

The  Case  Stated, 


After  the  passage  of  the  Walker  Tariff  Act  of  1846,  friends  of  protection  kept  up 
an  agitation  for  an  increase  in  the  tariff  rates.  Henry  C.  Carey,  of  Philadelphia, 
one  of  the  best  known  American  economists  of  the  time,  writing  in  1849, 
argued  for  protection  as  follows: 

Why  is  protection  needed?  Why  cannot  trade  with  foreign 
nations  be  carried  on  without  the  intervention  of  custom-house  offi- 
cers? Why  is  it  that  that  intervention  should  be  needed  to  enable  the 
loom  and  the  anvil  to  take  their  natural  places  by  the  side  of  the 
plough  and  the  harrow?  Such  are  the  questions  which  have  long  occu- 
pied my  mind,  and  to  the  consideration  of  which  I  now  invite  my 
readers. 

Of  the  advantage  of  perfect  freedom  of  trade,  theoretically  consid- 
ered, there  could  be  no  doubt.  The  benefit  derived  from  such  freedom 
in  the  intercourse  of  the  several  States,  was  obvious  to  all  ;  and  it  would 
certainly  seem  that  the  same  system  so  extended  as  to  include  the 
commerce  with  the  various  states  and  kingdoms  of  the  world  could  not 
fail  to  be  attended  with  similar  results.  Nevertheless,  every  attempt 
at  so  doing  had  failed.  The  low  duties  on  most  articles  of  mer- 
chandise in  the  period  between  1816  and  1827,  had  produced  a  state 
of  things  which  induced  the  establishment  of  the  first  really  pro- 
tective tariff,  that  of  1828.  The  approach  to  almost  perfect  freedom 
of  trade  in  1840,  produced  a  political  revolution,  and  a  similar  but 
more  moderate  measure,  led  to  the  revolution  of  last  year.  These 
were  curious  facts,  and  such  as  were  deserving  of  careful  examination. 

It  may  be  assumed  as  an  universal  truth,  that  every  step  made  in 
the  right  direction  will  be  attended  with  results  so  beneficial  as  to  pave 
the  way  for  further  steps  in  the  same  direction,  and  that  every  one 
made  in  the  wrong  direction  will  be  attended  with  disadvantageous 
results  tending  to  produce  a  necessity  for  a  retrograde  movement. 
The  compromise  bill,  in  its  final  stages,  was  a  near  approach  to  perfect 
freedom  of  trade,  the  highest  duty  being  only  20  per  cent.  Believing 
it  to  be  a  step  in  the  right  direction,  one  of  the  enthusiastic  advocates 
of  perfect  freedom  of  trade  proposed,  soon  after  its  passage,  that, 
commencing  with  1842,  there  should  be  a  further  reduction  of  one 
per  cent,  per  annum  for  twenty  years,  at  the  end  of  which  time  all 

1  Miscellaneous  Works  (Harmony  of  Interests).  By  Henry  C.  Carey  (Phila- 
delphia, 1872),  3-10. 


334  READINGS  IN  ECONOMIC  HISTORY 

necessity  for  custom-houses  would  have  disappeared.  With  the 
gradual  operation  of  the  earlier  stages  of  that  bill  there  was,  however, 
produced  a  state  of  depression  so  extraordinary  as  to  lead  to  a  polit- 
ical change  before  reaching  its  final  stages,  and  the  duties  had  scarcely 
touched  the  point  of  20  per  cent,  before  they  were  raised  to  30,  50,  60, 
or  more,  by  the  passage  of  the  tariff  of  1842.  With  the  election  of 
1844,  the  friends  of  free  trade  were  restored  to  power,  and  two  years 
afterwards  was  passed  the  tariff  of  1846  —  the  free-trade  measure  — 
in  which  the  revenue  duty  on  articles  to  be  protected  was  fixed  at 
thirty  per  cent.  Here  was  a  retrograde  movement.  Instead  of  pass- 
ing from  twenty  downwards,  we  went  up  to  thirty,  and  thus  was 
furnished  an  admission  that  so  near  an  approach  to  free  trade  with 
foreign  nations  as  was  to  be  found  in  twenty  per  cent,  duties  had  not 
answered  in  practice.  Since  then,  it  has  been  admitted,  even  by  the 
most  decided  free-trade  advocates,  that  on  certain  commodities  even 
thirty  per  cent,  was  too  low,  and  within  six  months  from  the  date  of 
the  passage  of  the  act  of  1846,  its  author  proposed  to  increase  a  variety 
of  articles  to  thirty-five  and  forty  per  cent.  Here  was  another  retro- 
grade movement.  It  is  now  admitted  that  there  are  other  articles 
the  duties  on  which  require  to  be  raised,  and  daily  experience  goes  to 
prove  that  such  must  be  the  case,  or  we  must  abandon  some  of  the 
most  important  branches  of  industry.  The  tendency  is,  therefore, 
altogether  backward.  Thirty  per  cent,  duty  is  now  regarded  as  almost 
perfect  freedom  of  trade,  and  instead  of  proposing  a  further  annual 
reduction,  each  year  produces  a  stronger  disposition  for  a  considerable 
increase.  In  all  this,  it  is  impossible  to  avoid  seeing  that  there  is  great 
error  somewhere,  and  almost  equally  impossible  to  avoid  feeling  a 
desire  to  understand  why  it  is  that  the  approaches  towards  freedom 
of  trade  with  foreign  nations  have  so  frequently  failed,  and  why  it  is 
that  every  strictly  revenue  tariff  is  higher  than  that  which  preceded  it. 

With  a  view  to  satisfy  myself  in  regard  thereto,  I  have  recently 
made  the  examination,  before  referred  to,  of  our  commercial  policy 
during  the  last  twenty-eight  years,  commencing  with  1821,  being  the 
earliest  in  relation  to  which  detailed  statements  have  been  published. 
Before  commencing  to  lay  before  you  the  results  obtained,  it  may  be 
well  to  say  a  few  words  as  to  the  merits  claimed  by  the  two  parties 
for  their  respective  systems. 

The  one  party  insists  that  protection  is  "a  war  upon  labour  and 
capital,"  and  that  by  compelling  the  application  of  both  to  pursuits 
that  would  otherwise  be  unproductive,  the  amount  of  necessaries, 
comforts,  and  conveniences  of  life  obtainable  by  the  labourer  is  dimin- 


THE   TARIFF  335 

ished.  The  other  insists  that  by  protecting  the  labourer  from  com- 
petition with  the  ill-fed  and  worse-clothed  workmen  of  Europe,  the 
reward  of  labour  will  be  increased.  Each  has  thus  his  theory,  and 
each  is  accustomed  to  furnish  facts  to  prove  its  truth,  and  both  can 
do  so  while  limiting  themselves  to  short  periods  of  time,  taking  at 
some  times  years  of  small  crops,  and  at  others  those  of  large  ones,  and 
thus  it  is  that  the  inquirer  after  truth  is  embarrassed.  No  one  has 
yet,  to  my  knowledge,  ever  undertaken  to  examine  all  the  facts  during 
any  long  period  of  time,  with  a  view  to  show  what  have  been,  under 
the  various  systems,  the  powers  of  the  labourer  to  command  the  neces- 
saries and  comforts  of  life.  One  or  other  of  the  systems  is  true,  and 
that  is  true  under  which  labour  is  most  largely  rewarded :  that  under 
which  the  labourer  is  enabled  to  consume  most  largely  of  food,  fuel, 
clothing,  and  all  other  of  those  good  things  for  the  attainment  of  which 
men  are  willing  to  labour.  If,  then,  we  can  ascertain  the  power  of 
consumption  at  various  periods,  and  the  result  be  to  show  that  it  has 
invariably  increased  under  one  course  of  action,  and  as  invariably 
diminished  under  another,  it  will  be  equivalent  to  a  demonstration  of 
the  truth  of  the  one  and  the  falsehood  of  the  other.  To  accomplish 
this,  has  been  the  object  of  the  inquiry  in  which  I  have  recently  been 
engaged. 

It  is  necessary  now  to  show  what  have  been  the  distinguishing  fea- 
tures of  the  several  systems  that  have  been  in  operation  during  the 
period  to  be  examined.  They  are  as  follows:  — 

First.  The  tariff  of  1816  was  a  planters'  and  farmers'  measure. 
Cotton  and  coarse  cotton  cloths  were  carefully  protected.  Iron  itself 
was  well  protected,  but  almost  all  manufactures  of  iron,  the  commodi- 
ties for  the  production  of  which  pig  or  bar  iron  could  be  used,  were 
admitted  at  20  per  cent.  Wool  paid  15  per  cent.  Blankets  and 
woolen  and  stuff  goods  paid  15  per  cent.,  and  finer  goods  25  per  cent., 
until  1819,  after  which  they  paid  but  20  per  cent.  Spirits  paid  a  heavy 
specific  duty,  for  the  benefit  of  the  farmers;  but  paper,  hats,  caps, 
manufactures  of  leather,  types,  and  manufactured  articles  generally, 
paid  only  from  20  to  30  per  cent.  Coal  paid  5  cents  per  bushel,  but 
the  commodities  in  the  manufacture  of  which  coal  was  to  be  used  paid 
ad  valorem  duties.  Protection  was  thus  given  to  the  coarse  com- 
modities that  least  required  it,  and  refused  to  those  for  the  produc- 
tion of  which  the  coarser  ones  were  to  be  used.  As  a  matter  of 
course,  its  protective  features  were  totally  inoperative. 

Second.  That  of  1824,  under  which  iron  was,  as  before,  well  pro- 
tected, but  manufactures  of  iron,  and  of  metals  generally,  were  ad- 


336  READINGS  IN  ECONOMIC  HISTORY 

mitted  at  25  per  cent.  Wool  was  raised  to  20  per  cent.,  to  increase,  by 
successive  stages,  until  it  reached  30  per  cent.  Coarse  woolens  were 
fixed  permanently  at  25  per  cent.  Finer  ones  were  to  rise  gradually 
until  they  reached  33^  per  cent.  Carpets  paid  from  20  to  50  cents 
per  square  yard.  Hams  paid  3,  and  butter  5  cents  per  pound.  Pota- 
toes 10,  oats  10,  and  wheat  25  cents  per  bushel;  while  scythes,  spades, 
shovels,  and  other  things  requisite  for  the  raising  of  wheat  and  pota- 
toes, paid  30  per  cent.  Spirits  were  carefully  protected.  Bolting 
cloths  paid  15  per  cent.  Sail-duck,  Osnaburgs,  &c.,  15  per  cent. 
Cotton  cloths  paid  25  per  cent.,  with  a  minimum  of  30  cents  per 
yard.  The  general  features  of  this  law  did  not  vary  mate- 
rially from  those  of  that  of  1816,  although  protection  was  slightly 
increased. 

Third.  The  first  tariff  thoroughly  protective,  and  so  intended  to 
be,  was  that  of  1828.  It  continued  until  1832,  when  was  passed  the 
first  of  two  laws  by  which  the  whole  policy  of  the  country  was  changed. 
This  series  constitutes  stage  the 

Fourth.  By  the  act  of  July  14,  1832,  railroad  iron  was  admitted 
free  of  duty.  Axes,  spades,  &c.,  as  before,  30  per  cent.  Bar  and  pig 
iron  were  carefully  protected,  but  a  large  portion  of  the  commodities 
for  which  they  were  needed  were  thus  admitted  without  duty,  or  at 
the  same  rate  as  under  our  present  free-trade  tariff.  Tea  and  coffee 
were  free.  Silks  paid  10  per  cent.  Wool  was  protected,  but  worsted 
stuff  goods  were  admitted  at  10  per  cent.  Cotton  goods  paid  25  per 
cent.,  with  minimums  of  30  cents  for  plain,  and  35  for  prints.  This 
continued  in  force  until  the  following  March,  when  was  passed  the 
Compromise  Act,  under  which  linens,  stuff  goods,  silks,  and  other  arti- 
cles were  admitted  free  of  duty,  and  one-tenth  of  the  excess  over  20 
per  cent,  reduced  from  all  other  commodities,  to  take  effect  December, 
1833,  with  a  further  similar  reduction  every  two  years  until  1841, 
when  one-half  of  the  remaining  surplus  was  to  be  reduced,  and  the 
other  half  in  1842,  when  no  duty  would  exceed  20  per  cent. 

Fifth.     The  protective  tariff  of  1842,  which  was  followed  by 

Sixth.     The  free  trade  tariff  of  1846,  now  in  existence. 

We  have  thus  had  six  different  systems,  but  the  first  and  second 
differ  from  each  other  so  little  that  it  is  unnecessary  to  separate  the 
years  falling  under  them,  whereas  the  early  years  of  the  Compromise 
differ  so  essentially  from  the  two  latter  that  it  is  expedient  to  separate 
them.  I  shall  therefore  group  the  results  as  follows:  — 

First.    The  tariffs  of  1816  and  1824,  ending  with  1829. 

Second.    That  of  1828,  commencing  with  October,  1829,  and  end- 


THE   TARIFF  337 

ing  with  the  period  at  which  the  Compromise  began  to  become  opera- 
tive, October,  1834. 

Third.  The  Compromise,  commencing  with  1835  and  ending  with 
1841. 

Fourth.  The  years  1842  and  1843,  the  period  immediately  pre- 
ceding and  following  the  passage  of  the  act  of  1842,  being  that  of  the 
strictly  revenue  tariff  of  20  per  cent. 

Fifth.  The  tariff  of  1842,  commencing  June,  1843,  and  ending 
June,  1847. 

Sixth.  That  of  1846,  commencing  June,  1847,  and  coming  down 
to  the  present  time. 


CHAPTER  XI 
THE  WESTWARD  MOVEMENT,   1817-1860 

I.    THE  EFFECT  ON  THE  PEOPLE  OF  TERRITORIAL  EXPANSION 

An  Explanation  of  American  Characteristics,  1843 1 

Americans  have  repeatedly  been  charged  by  European  observers  with  emphasiz- 
ing size  and  magnitude  rather  than  quality,  and  because  of  their  activities  in  accu- 
mulating wealth  they  have  been  called  mean  and  sordid.  These  same  observers 
have  compared  the  finer  tastes  of  their  own  countrymen  with  those  of  the  Americans 
to  the  disadvantage  of  the  latter;  and  in  so  doing,  they  have  failed  to  take  into 
account  the  differences  in  national  life  and  environment.  The  Americans  con- 
quered a  continent  in  a  century  and  the  conquest  left  them  little  time  for  those 
activities  in  which  the  higher  classes  of  Europeans  indulged  themselves.  The  very 
magnitude  of  the  conquest  caused  them  unconsciously  to  stress  size,  and  in  many 
cases  to  express  the  liveliest  contempt  for  the  higher  refinements  of  life.  In 
short  they  were  fully  occupied  in  getting  a  living. 

GENTLEMEN  travellers  and  bookmakers,  by  way  of  reproach,  call 
us  the  trading-nation,  a  people  devoted  to  gain ;  they  lament  our  want 
of  chivalry,  our  neglect  of  light  amusements;  they  wonder  we  do  not 
better  support  our  theatres  and  other  places  of  public  resort,  and  say 
we  are  too  sombre  and  gloomy  by  half  for  our  national  health.  They 
compare  New  York  with  London  and  Paris;  Boston  and  Philadelphia, 
with  Liverpool;  new  cities,  with  old;  a  new,  young  people,  seeking 
their  natural  level,  with  the  old,  settled,  and  unchanging  population 
of  Europe.  Partly  for  the  instruction  of  such  persons,  and  partly  for 
the  satisfaction  of  dwelling  upon  this  honorable  characteristic  of  our 
country,  we  will  consider  these  charges  in  our  pages. 

But  a  few  years  ago,  the  country  we  inhabit  was  a  wilderness. 
Hardly  was  the  land  cleared  on  the  coast,  and  dotted  with  towns  and 
villages;  hardly  had  New  York,  and  Boston,  and  Philadelphia,  as- 
sumed the  name  and  character  of  cities,  before  the  great  west  became 
an  object  of  interest  to  our  own  people,  and  to  the  immigrant  from 
foreign  lands.  The  story  of  the  resources  of  this  continent  reached 

1  Hunt's  Merchants'  Magazine  (New  York,   1843),  VIII,   164-8.     Article  by 
J.  N.  Bellows,  of  New  Hampshire. 


THE  WESTWARD   MOVEMENT  339 

the  ears  of  the  starved  and  oppressed  European;  a  gleam  of  hope 
lighted  up  his  care-worn  features,  as  he  heard  of  a  free  life  on  a  fertile 
soil,  by  the  banks  of  wide,  navigable  rivers,  skirted  by  woods  that 
abounded  with  game,  where  food,  fuel,  and  peace,  could  be  had  for 
the  asking.  We  had  enough  to  do  to  welcome  our  new  friends,  as 
every  one  knows.  The  wants  of  a  population,  increasing  in  the  west 
by  magical  numbers,  made  demands  upon  the  comparatively  old 
portions  of  the  country  to  supply  them.  The  great  canal,  connecting 
the  lakes  with  the  Hudson,  was  one  of  these  wants.  The  genius  of  a 
Clinton  devised  and  planned  it,  and  it  is  the  pattern  improvement  of 
this  time.  The  magnitude,  completion,  and  success  of  it,  has  given 
hope  and  confidence  to  every  subsequent  effort  of  the  kind;  and  it 
has  been  of  as  great  benefit  in  its  consequences  upon  internal  improve- 
ments, as  it  has  as  a  high-way  for  the  \vealth  of  the  western  valleys. 

We  were,  besides,  destitute  of  manufactures,  (thanks  to  the  early 
parental  guidance  of  the  mother  country,)  and  were  obliged  to  seek 
abroad  for  other  means  of  supplying  our  new  demands.  We  had  no 
time  to  give  that  attention  to  manufactures  which  we  saw,  at  a  glance, 
were  the  great  interests  of  our  country.  Our  population  came  upon 
us  too  rapidly  for  this;  they  could  not  stand  naked,  and  without  tools 
and  machinery,  while  we  were  putting  up  the  mills  to  manufacture 
clothing  and  supplies  for  them.  They  must  be  imported;  the  capital 
of  the  country  was  invested  in  shipping,  and  the  young  men  flocked 
to  the  city  and  became  ship-owners  and  importers.  Our  inland  towns 
suffered,  and  still  suffer,  the  draining  off  of  many  of  their  most  prom- 
ising youth,  whom  the  hope  of  speedy  fortunes  and  high  wages  drew 
to  the  seaports.  Trade  became  the  business  of  the  country  from  an 
absolute  necessity. 

As  soon  as  we  had  breathing-time,  we  turned  our  attention  to 
manufactures;  that  is,  as  soon  as  the  young  men  could  be  spared, 
and  the  capital  could  be  spared  or  made.  Then,  in  places  where 
water-power  was  abundant,  towns  and  villages  sprung  into  being,  and 
employed  not  only  the  labors  of  the  young  men,  but  the  young  women, 
to  such  an  extent,  that  cooks  and  chambermaids  became  scarce;  and, 
at  this  time,  the  majority  of  those  who  are  technically  called  servants, 
in  the  houses  of  the  opulent,  are  foreigners,  the  natives  being  employed, 
for  the  most  part,  on  the  farms  and  in  the  factories. 

Our  position  with  regard  to  other  people,  has  forced  us  to  do  every- 
thing in  a  hurry.  Our  company  came  so  soon,  we  had  hardly  time 
to  put  ourselves  into  trim  to  receive  visitors.  As  a  nation,  we  are 
much  in  the  same  predicament  with  the  lady  without  "help,"  who 


340  READINGS  IN  ECONOMIC  HISTORY 

consequently  does  her  own  work  and  "chores,"  upon  whom  a  carriage 
load  of  fashionable  visitors  arrives  while  she  is  cooking  dinner.  Hear- 
ing the  bell,  and  thinking  it  is  the  children  just  come  home  from  school, 
she  runs  to  open  the  door  herself.  Finding  her  mistake,  she,  like  a 
sensible  woman,  covers  her  confusion  not  by  apologies  and  lies,  but  by 
making  herself  as  agreeable  as  she  can,  and  her  guests  go  away  and  call 
her  a  slattern  and  other  hard  names;  when,  if  they  knew  all  the  cir- 
cumstances, they  would  consider  her  an  angel.  We  trust,  from  this 
statement  of  facts,  that  it  can  be  seen  why  we  are  a  trading-nation;  why 
so  large  a  part  of  our  population  is  engaged  in  a  way  that  make  them 
averse  to  spending  their  leisure  time  at  theatres  and  in  jovial  parties. 

If  we  are,  then,  by  the  necessity  of  the  case,  in  consequence  of  our 
youth,  much  engaged  in  trade,  it  can  easily  be  seen  why  we  are  not, 
in  the  popular  sense  of  the  word,  a  chivalrous  people.  War,  love  of 
conquest,  the  profession  of  arms,  nurture  chivalry.  The  chivalry  of 
the  ancients,  and  the  remains  of  the  spirit  of  knighthood  in  Europe, 
at  this  time,  is  the  refinement  which  taste  throws  over  a  radically  bad 
principle;  an  attempt  to  adorn,  with  a  show  of  justice  and  equity, 
what,  at  the  bottom,  is  but  a  blood-thirsty  preference  of  self  to  human 
rights.  It  is  all  of  a  piece  with  the  drapery  of  thrones  and  the  imposing 
magnificence  of  rank  and  title,  which  exist  only  by  cruel  want  some- 
where. For  we  suppose  that  it  must  be  a  law  of  nature,  that  every 
waste  and  extravagance  deprives  some  one  of  comfort;  and  the  pres- 
ent condition  of  the  laboring  classes  in  Europe,  is  a  sufficient  verifi- 
cation of  our  remark.  We  are  not  a  chivalrous  people,  then,  and  do 
not  wear  swords  and  plumes;  we  discountenance  duelling,  and  live 
under  the  protection  of  laws  we  have  ourselves  made.  We  do  not 
recognise  any  difference  between  the  law  of  honor  and  the  law  of  God, 
and  say  that  every  custom,  inconsistent  with  the  latter,  is  of  course 
so  with  the  former.  We  take  credit  for  having  made  this  advance  in 
morals,  and  believe  it  is  the  natural  fruit  of  our  Christian  origin. 

Now,  the  Spaniard  is  a  chivalrous  character,  and  the  decayed 
nobility  of  Italy  are  patterns  of  chivalry,  though  steeped  to  the  lips 
in  poverty;  "  too  proud  to  work,  they  nobly  starve."  Thank  heaven! 
there  is  none  of  this  spirt  in  our  industrious  population;  and,  least  of 
all,  is  there  any  one  so  destitute  of  common  sense  as  to  view  the  em- 
ployments of  trade  as  beneath  his  dignity.  We  read  of  such  men  in 
fiction,  and  even  then  we  give  them  a  fictitious  pity.  That  any  poor, 
mortal  man,  born  into  this  world  of  trial  and  struggle,  should  have  the 
notion  that  some  accident  of  birth  exempts  him  from  exertion,  and  that 
an  honest  livelihood,  wrought  out  by  his  own  energies,  is  inferior  to 


THE  WESTWARD   MOVEMENT  341 

dronish  dependence  and  proud  poverty,  fills  us  with  commiseration 
and  disgust.  That  trade  should  be  undervalued  by  the  very  men 
who  owe  their  greatness  to  it;  that  any  Englishman,  of  all  others, 
should  sneer  at  what  has  made  his  country  what  she  is,  is  surprising 
indeed.  For,  to  what  does  England  owe  her  rank  among  the  nations 
of  the  globe,  if  not  to  the  extensive  enterprise  of  her  merchants? 
Take  from  her  her  commerce,  and  how  infinitely  inferior  she  would 
be  to  France,  one-fourth  of  whose  soil  is  worth  more  than  all  the  Brit- 
ish empire  can  boast  of  possessing.  The  territory  of  England  is  the 
Atlantic  and  Pacific  oceans ;  her  ships  are  the  ploughs  of  these  watery 
soils,  and  from  them  she  reaps  her  great  harvests.  Her  wealth  is  her 
power,  and  it  is  a  wealth  heaped  up  for  her  by  her  merchants.  Why 
has  Spain  lost  the  position  she  once  held  among  nations?  Her  com- 
merce has  been  interrupted  by  fatal  intestine  wars.  Property  has  had 
no  security;  and  the  nation,  step  by  step,  has  declined.  France  has 
not  yet  recovered  from  her  wasting  revolutions,  and  the  derangement 
of  her  trade  is  one  of  the  sorest  evils  of  her  commotions.  It  is  the 
condition  of  the  mercantile  class  that  furnish  the  best  test  of  the  con- 
dition of  a  country,  because  every  nation  owes  its  life  to  this  interest; 
and  it  is  because  we  know  this  by  experience  and  philosophy,  that 
the  majority  of  our  people  turn  their  attention  to  trade  as  the  surest 
road  to  national  prosperity. 

It  is  somewhat  remarkable,  that  the  English  people  hold,  as  a 
standing  jest,  the  tendency  to  bargaining  and  money-getting  among 
the  Scotch.  Whether  they  allow  other  people  to  laugh  at  Sawney, 
is  a  question.  But  there  is  little  doubt  that  the  English  nation  owes 
much  to  Scotland.  Her  men  of  genius  have  oftener  boasted  a  Scot- 
tish or  Irish  origin  than  an  English  one.  Her  orators,  her  poets  and 
legislators,  have  been  born  oftener  than  otherwise  among  the  people 
she  pretends  to  despise,  or  the  people  she  is  not  too  proud  to  oppress. 
No  one  may  say  how  much,  at  this  very  moment,  England  owes  to 
the  canny  Scot,  and  the  warm-hearted  son  of  Erin;  the  one  of  whom 
she  derides,  and  the  other  subdues.  .  .  . 

In  due  time,  no  doubt,  we  shall  have  the  arts  in  some  perfection. 
Our  architecture  will  improve  as  we  have  wealth  and  leisure  to  give 
heed  to  the  elegancies  of  life;  but  we  trust  that  we  shall  always  esti- 
mate such  matters  as  the  Croton  aqueduct  as  of  far  greater  conse- 
quence than  statues  and  pictures;  that  before  we  have  a  national 
gallery,  we  shall  have  asylums  for  the  blind  and  the  insane ;  and  study 
what  is  due  to  the  wants  of  the  whole  people,  before  we  undertake  to 
gratify  the  taste  of  foreigners,  and  the  few  travellers  who,  forming  a 


342  READINGS  IN  ECONOMIC  HISTORY 

taste  for  certain  luxuries  abroad,  would  have  us  stop  the  gradual 
progress  we  are  making,  to  attend  to  some  Quixotic  scheme  for  making 
America  like  "dear  Italy."  One  man  thinks  music  the  great  desidera- 
tum, and  would  sacrifice  every  thing  to  that;  another  is  mad  upon 
the  subject  of  public  edifices,  and  decries  every  ill-proportioned 
building  as  a  blot  and  stain  upon  the  national  character,  forgetting 
that  our  wealth  is  yet  limited,  and  that  we  have  a  great  deal  to  do  in 
other  affairs,  and  that  it  is  quite  as  important  the  debit  side  of  the 
account  should  bear  a  fair  ratio  to  the  credit  side,  as  that  a  faultless 
proportion  should  exist  in  the  parts  of  the  building.  How  many 
public  edifices  have  been  enlarged  to  meet  the  exigency  of  the  moment 
and  from  economy,  while  taste  demands  that  the  whole  be  pulled 
down  and  put  up  anew. 

Go  to  the  western  immigrant,  who  consults  convenience  and  expe- 
dition in  building  his  log  hut,  and  is  glad  of  any  house  that  will  shelter 
his  little  family,  and  say  to  him,  "there  friend,  your  house  is  out  of  all 
proportion;  and  where  are  your  fences  and  your  flower-garden?  Why 
don't  you  paint  your  gateway,  and  make  gravel  walks  about  your 
domicil,  and  set  out  shrubbery,  &c.,  &c.?"  The  man  will  laugh  in 
your  face,  and  perhaps  answer  you  thus:  "I  have  a  very  warm  house; 
here  is  a  hole  in  the  roof  to  let  out  the  smoke,  and  a  hole  in  the  door 
to  let  in  the  pigs;  it  works  very  well,  as  you  may  see."  This  matter 
of  the  pigs  might  be  dispensed  with,  to  be  sure,  but  you  would  find 
out  that  the  man  is  chiefly  bent  on  living  first;  he  feels  that  he  has 
great  fundamental  things  to  attend  to  before  he  can  accommodate 
himself  to  your  tastes. 

This  is  our  position  as  a  country.  We  have  the  land  to  clear, 
canals  to  dig,  rail-tracks  to  lay,  water- works  to  finish;  trade,  agricul- 
ture, and  common  school  education,  are  the  great  interests  of  our 
people.  You  may  talk  to  them,  write  about  them,  ridicule  them,  do 
what  you  please  to  divert  them  from  their  common-sense  track,  and 
you  will  talk,  and  write,  and  ridicule  in  vain.  We  cannot  do  every- 
thing to-day.  Give  us  time;  and  do  not  expect  from  our  infancy, 
what  only  can  be  found  in  the  manhood  of  a  nation. 

II.    ADVICE  TO  EMIGRANTS 

A.     Foreign  Immigration  and  the  Westward  Movement,  1816  1 
During  the  period  when  the  Mississippi  Valley  was  being  rapidly  populated 
many  books  on  emigration  were  written,  in  which  those  about  to  migrate  to  America 

1  Travels  through  the  United  States  of  America.     By  John  Melish  (Philadelphia 
and  London,  1818),  628-33. 


THE  WESTWARD   MOVEMENT  343 

were  encouraged  to  emigrate  to  the  western  country  and  advised  as  to  routes  and 
methods  of  travel.  The  same  advice  was  equally  good  for  the  native  Americans 
along  the  coast,  for  the  conditions  in  the  western  country  were  distinctive  and 
peculiar  to  that  section. 

It  would  be  very  prudent  for  new  comers,  especially  labourers  or 
farmers,  to  go  into  the  country  without  delay,  as  they  will  save  both 
money  and  time  by  it,  and  avoid  several  inconveniences  of  a  seaport 
town.  By  spending  some  time  with  an  American  farmer,  in  any 
capacity,  they  will  learn  the  method  of  tillage,  or  working  a  planta- 
tion, peculiar  to  this  country.  No  time  can  be  more  usefully  employed 
than  a  year  in  this  manner.  In  that  space,  any  smart,  stout  man  can 
learn  how  woodland  may  be  cleared,  how  cleared  land  is  managed; 
he  will  acquire  some  knowledge  of  crops  and  their  succession,  of  usages 
and  customs  that  ought  to  be  known,  and  perhaps  save  something 
into  the  bargain.  Many  European  emigrants  who  brought  money 
with  them  have  heretofore  taken  this  wise  course,  and  found  it  greatly 
to  their  advantage;  for,  at  the  end  of  the  year,  they  knew  what  to 
do  with  it.  They  had  learned  the  value  of  lands  in  old  settlements 
and  near  the  frontiers,  the  price  of  labour,  cattle,  and  grain,  and  were 
ready  to  begin  the  world  with  ardour  and  confidence.  Multitudes  of 
poor  people,  from  Ireland,  Scotland,  and  Germany,  have,  by  these 
means,  together  with  industry  and  frugality,  become  wealthy  farmers, 
or,  as  they  are  called  in  Europe,  estated  men,  who,  in  their  own  coun- 
tries, where  all  the  lands  are  fully  occupied,  and  the  wages  of  labour  low, 
could  never  have  emerged  from  the  condition  wherein  they  were  born. 

In  the  west  of  Pennsylvania,  there  is  a  custom  which  the  farmers 
there  call  cropping,  and  which  is  as  beneficial  to  the  owner  as  to  the 
tiller  of  the  ground,  in  the  present  state  of  this  country.  The  cropper 
performs  the  labour  of  the  plantation,  as  spring  and  fall  ploughings, 
sowing,  harrowing,  or  other  work,  and  receives  a  certain  share  of  the 
crop,  as  agreed  on,  for  his  pains.  But  he  must  be  an  expert  farmer 
before  he  can  undertake,  or  be  intrusted  with,  the  working  of  the  farm. 
None  but  a  poor  man  undertakes  it,  and  that  only  until  he  can  save 
money  to  buy  land  of  his  own. 

It  is  invariably  the  practise  of  the  American,  and  well  suited  to 
his  love  of  independence,  to  purchase  a  piece  of  land  as  soon  as  he  can, 
and  to  cultivate  his  own  farm,  rather  than  live  at  wages.  It  is  equally 
in  the  power  of  an  emigrant  to  do  the  same,  after  a  few  years  of  labour 
and  economy.  From  that  moment  he  secures  all  the  means  of  happi- 
ness. He  has  a  sufficiency  of  fortune,  without  being  exempt  from 
moderate  labour;  he  feels  the  comfort  of  independence,  and  has  no 


344 

fear  of  poverty  in  his  old  age.  He  is  invested  with  the  powers  as  well 
as  the  rights  of  a  freeman,  and  may  in  all  cases,  without  let  or  appre- 
hension, exercise  them  according  to  his  judgment.  He  can  afford  to 
his  children  a  good  education,  and  knows  that  he  has  thereby  provided 
for  their  wants.  Prospects  open  to  them  far  brighter  than  were  his 
own,  and  in  seeing  all  this  he  is  surely  blest. 

Industrious  men  need  never  lack  employment  in  America.  La- 
bourers, carpenters,  masons,  bricklayers,  stonecutters,  blacksmiths, 
turners,  weavers,  farmers,  curriers,  tailors,  and  shoemakers,  and  the 
useful  mechanics  generally,  are  always  sure  of  work  and  wages.  Stone- 
cutters now  receive,  in  this  city,  (New  York,)  two  dollars  a  day,  equal 
to  nine  shillings  sterling;  carpenters,  one  dollar  and  eighty-seven  and 
a  half  cents;  bricklayers,  two  dollars;  labourers,  from  one  dollar  to 
one  and  a  quarter;  others  in  proportion.  At  this  time  (July,  1816,) 
house-carpenters,  bricklayers,  masons,  and  stonecutters,  are  paid 
three  dollars  per  day  in  Petersburgh,  Virginia.  The  town  was  totally 
consumed  by  fire  about  a  year  since,  but  it  is  now  rising  from  its  ashes 
in  more  elegance  than  ever.  Mechanics  will  find  ample  employment 
there  for  perhaps  two  years  to  come.  .  .  . 

Men  of  science,  who  can  apply  their  knowledge  to  useful  and  prac- 
tical purposes,  may  be  very  advantageously  settled;  but  mere  liter- 
ary scholars,  who  have  no  profession,  or  only  one  which  they  cannot 
profitably  practise  in  this  country,  do  not  meet  with  much  encour- 
agement; in  truth,  with  little  or  none,  unless  they  are  willing  to  devote 
themselves  to  the  education  of  youth.  The  demand  for  persons  who 
will  do  this  is  obviously  increasing:  and  although  many  excellent  pre- 
ceptors are  every  where  to  be  found  among  the  native  Americans, 
there  is  still  considerable  room  for  competition  on  the  part  of  well 
qualified  foreigners.  .  .  . 

In  what  part  of  this  extensive  country  may  an  emigrant  from  the 
northern  or  western  parts  of  Europe  most  advantageously  settle?  If 
he  be  undecided  until  his  arrival,  his  choice  will  be  agreeably  per- 
plexed or  suspended  by  the  different  invitations  offered  by  various 
sections  of  this  empire.  It  covers  an  area  between  the  3ist  and  46th 
degrees  of  north  latitude,  and  from  the  Atlantic  ocean  to  the  west- 
ward indefinitely.  In  time  our  settlements  will  reach  the  borders  of 
the  Pacific.  The  productions  of  the  soil  are  as  various  as  the  climate. 
The  middle  states  produce  grain  of  all  kinds;  Maryland  and  Virginia 
afford  wheat  and  tobacco;  North  Carolina,  naval  stores;  and  South 
Carolina  and  Georgia,  rice,  cotton,  indigo,  and  tobacco:  to  these 
products,  Louisiana  and  Mississippi  add  sugar  and  indigo,  which  are 


THE  WESTWARD   MOVEMENT  345 

now  cultivated  in  Georgia  likewise.  Tennessee,  Kentucky,  Indiana 
and  Ohio  are  productive  of  the  principal  part  of  the  foregoing  staples, 
together  with  hemp,  coal,  and  such  plants  as  are  found  in  the  northern 
and  middle  states,  to  the  eastward  of  the  Allegany  mountains.  Over 
this  great  tract,  the  finest  fruits  grow  in  perfection;  grain  of  every 
sort  is  in  plenty;  and  "he  who  puts  a  seed  into  the  earth  is  recom- 
pensed, perhaps,  by  receiving  forty  out  of  it."  .  .  . 

If  a  European  has  previously  resolved  to  go  to  the  western  country, 
near  the  Allegany  or  Ohio  rivers,  he  will  have  saved  much  expense  and 
travel  by  landing  at  Baltimore;  from  thence  to  Pittsburg,  at  the  head 
of  the  Ohio,  is  about  200  miles  direct;  perhaps  not  more  than  240  by 
the  course  of  the  road.  A  few  days'  journey  will  bring  him  along  a 
fine  turnpike  from  Baltimore,  nearly  to  Cumberland,  in  Allegany 
county,  (Md.)  from  whence  the  public  road,  begun  by  the  United 
States,  crosses  the  mountains,  and  is  to  touch  the  Ohio  at  Wheeling. 
A  smart  fellow,  in  a  little  time,  will  reach  Union,  in  Fayette  county, 
Pennsylvania.  Here  is  a  flourishing  county  adjoining  Green,  Wash- 
ington, and  Westmoreland,  in  any  one  of  which  may  be  found  almost 
every  thing  that  is  desirable,  and  a  population  hospitable  and  intelli- 
gent. From  Union  to  Pittsburg  is  but  a  day's  journey.  There  one 
may  ascend  the  Allegany  river  to  the  upper  countries;  or  he  may 
follow  the  current,  and  descend  the  Ohio,  to  the  state  of  that  name, 
cross  it  to  Indiana,  or  continue  his  voyage  to  Kentucky.  He  may 
proceed  to  the  Mississippi  river,  and  go  up  to  St.  Louis,  in  the  Missouri 
Territory,  or  he  may  proceed  a  little  farther  up,  and  ascend  the  Illi- 
nois River,  in  the  Illinois  Territory.  Such  are  the  facilities  of  going 
by  water  from  Pittsburg  to  various  parts  of  the  west ;  and  those  states 
and  territories  named  are  among  the  most  fertile  in  America. 

From  Philadelphia  to  Pittsburg  is  about  300  miles,  chiefly  through 
a  fine,  plentiful,  and  well-cultivated  country.  A  gentleman  in  Penn- 
sylvania, of  high  standing  and  information,  writes  to  a  member  of  this 
society:  "Pennsylvania,  after  all,  is,  perhaps,  the  best  field  for  Irish 
capacity  and  habits  to  act  in,  with  prospects  for  a  family,  or  for  indi- 
vidual reward.  Lands  of  the  finest  quality  may  be  had  in  this  state 
for  barely  settling  and  remaining  five  years;  the  advantage  derived 
from  the  emigrant,  being  the  encouragement  of  others  to  settle  and 
purchase."  That  is  by  the  laws  of  Pennsylvania,  warrantees  must 
make  an  actual  settlement  on  the  lands  they  claim  to  hold  by  deeds 
from  the  land-office.  Hence,  trusty  persons  obtain  a  deed  for  a  part, 
on  condition  of  clearing  a  certain  quantity,  and  building  a  house  and 
residing  there. 


346  READINGS  IN  ECONOMIC  HISTORY 

In  our  state,  (of  New  York,)  the  advantages  are  great,  whether  we 
regard  soil  or  situation,  or  roads,  lakes,  and  rivers.  Few,  if  any  states 
in  the  Union,  have  finer  land  than  the  great  western  district  of  New 
York.  It  has  risen  exceedingly  in  a  few  years,  and  the  price  will  be 
much  increased  as  soon  as  the  intended  canal  from  lakes  Erie  and 
Champlain  to  the  Hudson  river,  shall  be  completed.  These  most  use- 
ful and  magnificent  works  will  probably  be  begun  next  summer,  and 
afford,  for  several  years  to  come,  to  many  thousands  of  industrious  poor 
men  an  opportunity  of  enriching  themselves.  If  prudent,  they  may  re- 
alize their  earnings  on  the  spot,  and  become  proprietors,  in  fee,  of  landed 
estates  in  the  beautiful  country  they  shall  have  so  greatly  improved. . . . 

Those  who  have  acquired  useful  trades  will,  in  general,  find  little 
difficulty,  either  in  our  large  cities,  or  the  towns  and  villages  all  over 
the  country.  There  are  vacancies  for  a  large  portion  of  them. 

Clerks,  shopkeepers,  or  attendants  in  stores,  are  seldom  wanted; 
their  occupation  is  an  uncertain  one;  it  requires  some  time,  too,  for 
such  persons  to  acquire  the  mode  of  doing  business  with  the  same 
expertness  as  natives  or  long  residents.  In  most  cases  a  sort  of  appren- 
ticeship is  to  be  served ;  and  it  would  be  well  for  persons  newly  arrived 
to  engage  for  some  months  at  low  wages,  with  a  view  to  procure  the 
necessary  experience.  Six  months  or  a  year  spent  in  this  manner, 
and  for  this  purpose,  will  fit  a  man  for  making  better  use  of  his  future 
years;  and  he  will  have  no  occasion  to  repent  his  pains:  we  would 
press  this  on  your  consideration.  .  .  . 

Those  who  have  money,  and  intend  to  settle  here  in  any  line  of 
business,  would  do  well  to  vest  their  funds  in  some  public  stock,  or 
deposit  them  in  a  bank,  until  they  have  acquired  such  a  knowledge 
of  the  country,  the  modes  of  life  and  business,  as  shall  enable  them  to 
launch  into  trade,  commerce,  or  manufactures,  with  safety.  To  loan 
money  securely,  needs  great  care.  It  has  been  often  seen  that  persons 
arriving  in  America  with  some  property,  lose  it  before  they  prosper  in 
the  world.  The  reason  of  which  is  that,  in  the  first  place,  they  begin 
some  kind  of  business  without  knowing  how  to  conduct  it;  and,  in 
the  next,  that,  with  less  skill,  they  are  less  frugal  and  industrious  than 
their  competitors.  It  is  equally  observable,  that  persons  who  arrive 
here  with  little  to  depend  on  besides  their  personal  exertions,  become 
prosperous  at  last;  for  by  the  time  they  have  earned  some  money  in 
the  employ  of  others,  they  will  have  learned  there,  likewise,  how  to 
secure  and  improve  it. 

The  delay  here  recommended  is  all  important  and  necessary. 
Nothing  can  be  more  ruinous  to  strangers  in  this  country  than  head- 


THE  WESTWARD   MOVEMENT  347 

long  haste  in  those  plans  and  arrangements  on  which  their  future  for- 
tune entirely  depends.  Many  a  fatal  shipwreck  has  been  occasioned 
by  precipitation;  and  many  are  they  who  can  from  sad  experience 
bear  witness  to  this  truth.  Knowledge  of  modes  and  methods  must 
be  acquired  before  we  think  of  hazarding,  or  dream  of  acquiring  money. 
A  man  ignorant  of  the  use  of  the  sword  might  as  well  fight  a  fencing 
master  with  that  weapon,  as  an  unexperienced  stranger  enter  the  lists 
in  business  with  those  who  are  adepts  in  their  trade.  But  in  giving 
admonition,  let  us  not  be  thought  to  present  discouragements;  a 
little  pains  and  observation  will  qualify  a  man  of  sense  to  judge,  and 
the  example  of  men  here,  in  this  or  that  occupation,  is  well  worth 
regarding.  The  people  of  this  country  are  cast  in  a  happy  medium, 
at  once  liberal  and  cautious,  cool  in  deciding,  and  ardent  in  performing; 
none  exceed  them  in  acuteness  and  discernment,  and  their  conduct  is 
generally  a  pattern  that  may  be  followed  with  advantage. 

B.    Opportunities  in  the  West,  i8i?1 

Naturally  the  force  that  drew  emigrants  westwards  was  the  opportunity  to  be 
found  there.  No  one  saw  these  opportunities  more  clearly  than  Morris  Birkbeck, 
a  prosperous  English  farmer,  who  settled  in  Illinois  in  1817. 

The  great  want  of  capital  in  this  country  is  evinced  by  this  circum- 
stance: the  growers  of  "corn"  (Indian  corn)  and  other  grain,  sell  at 
this  season  regularly,  under  the  knowledge  that  it  will  as  regularly 
advance  to  double  the  price  before  the  next  harvest.  We  now  have 
an  offer  of  two  hundred  barrels  of  "corn,"  five  bushels  to  the  barrel, 
at  a  dollar  per  barrel,  when  the  seller  is  quite  aware  that  it  will  be 
worth  two  dollars  per  barrel  at  Midsummer.  Thus  store-keepers,  or 
other  capitalists,  receive  as  much  for  the  crop,  clear  of  expenses,  as 
the  grower  himself,  who  clears  the  land,  ploughs,  sows,  and  reaps  it. 
We  may  judge  from  this  consideration  how  much  the  farmer  is  kept 
back  for  want  of  spare  capital ;  and  what  will  be  the  advantages  of  the 
settler  who  commands  it.  The  same  remark  applies  to  bacon,  and 
every  article  of  produce. 

We  must  not  suppose,  that  the  poor  farmer  who  is  obliged  to  sell 
under  such  a  disadvantage,  is  absolutely  poor.  He  is,  on  the  contrary, 
a  thriving  man.  Probably,  the  person  who  now  spares  us  from  his 
heap,  two  hundred  barrels  of  corn,  possessed  three  years  ago,  nothing 
but  his  wife  and  family,  his  hands,  and  his  title  to  a  farm  where  an  axe 

1  Notes  on  a  Journey  in  America  from  the  Coast  of  Virginia  to  the  Territory  of 
Illinois.     By  Morris  Birkbeck  (London,  1818),  141-4. 


348  READINGS   IN  ECONOMIC  HISTORY 

had  never  been  lifted.  He  now,  in  addition,  has  a  cabin,  a  barn,  stable, 
horses,  cows,  and  hogs;  implements,  furniture,  grain,  and  other  pro- 
visions; thirty  or  forty  acres  of  cleared  land,  and  more  in  preparation, 
and  well  fenced;  and  his  quarter  section  in  its  present  state,  worth  four 
tunes  its  cost.  He  is  growing  rich,  but  he  would  proceed  at  a  double 
speed,  if  he  had  the  value  of  one  year's  crop  beforehand:  such  is  the 
general  condition  of  new  settlers. 

A  good  cow  and  calf  is  worth  from  twelve  to  twenty  dollars;  a 
two  year  old  heifer,  six  dollars;  sheep  are  scarce;  ewes  are  worth 
about  three  dollars  a  head;  a  sow  three  dollars;  a  stout  horse  for 
drawing,  sixty  dollars  or  upwards. 

Wheat  sells  at  3  s.  4!  d.  sterling,  per  bushel,  Winchester  measure. 

Oats,  is.  4d. 

Indian  corn,  1 1  d. 

Hay,  about  355.  per  ton. 

Flour,  per  barrel,  365.:  196  Ib.  nett. 

Fowls,  4!  d.  each. 

Eggs,  £d. 

Butter,  6  d.  per  pound. 

Cheese,  rarely  seen,  13^  d.  per  Ib. 

Meat,  2  d.  per  Ib. 

A  buck,  45.  6  d.  without  the  skin. 

Salt,  35.  4  d.  per  bushel. 

Milk,  given  away. 

Tobacco,  3  d.  per  pound. 

Our  design  was  to  commence  housekeeping,  but,  being  near  the 
tavern,  we  continued  to  board  there.  This  is  more  convenient  to  us, 
as  there  is  but  a  poor  market  in  this  little  town,  and  the  tavern  charges 
are  reasonable.  Our  board  is  two  dollars  per  week,  each  person,  for 
which  we  receive  twenty-one  meals.  Excellent  coffee  and  tea,  with 
broiled  chickens,  bacon,  &c.  for  breakfast  and  supper;  and  variety 
of  good  but  simple  fare  at  dinner;  about  five-pence  sterling  a  meal. 
No  liquor  but  water  is  thought  of  at  meals  in  this  country,  besides 
coffee,  tea,  or  milk. 

Travelling  expenses  are  very  regular  and  moderate,  amounting 
to  a  dollar  per  day,  for  man  and  horse,  —  viz.— 

Breakfast  and  feed  for  horse 37!  cents 

Feed  for  horses  at  noon 125     " 

Supper,  and  lodging,  man  and  horse 50       " 


100  that  is 
i  dollar. 


THE  WESTWARD   MOVEMENT 


349 


The  power  of  capital  in  this  newly  settled  or  settling  region,  is  not 
thoroughly  understood  in  the  eastern  states,  or  emigration  would  not 
be  confined  to  the  indigent  or  laborious  classes.  These  seem  to  be  all 
in  motion ;  for  the  tide  sets  far  more  strongly  from  these  states  toward 
the  west,  than  from  all  Europe  together.  Trade  follows  of  course; 
and  it  is  not  surprising  that  old  America  no  longer  affords  a  sure  asylum 
for  the  distressed  of  other  countries. 

C.     Routes  to  the  West,  1837  l 

Once  the  emigrant's  mind  was  made  up  to  move  westward,  the  selection  of  a  route 
to  that  section  became  important.  John  Mason  Peck,  a  well-known  authority 
on  the  history  and  geography  of  the  Mississippi  Valley,  describes  several  routes  as 
follows: 

Having  decided  to  what  State  and  part  of  the  State,  an  emigrant 
will  remove,  let  him  then  conclude  to  take  as  little  furniture  and  other 
luggage  as  he  can  do  with,  especially  if  he  comes  by  public  convey- 
ances. Those  who  reside  within  convenient  distance  of  a  sea  port, 
would  find  it  both  safe  and  economical  to  ship  by  New  Orleans,  hi 
boxes,  such  articles  as  are  not  wanted  on  the  road,  especially  if  they 
steer  for  the  navigable  waters  of  the  Mississippi.  Bed  and  other 
clothing,  books,  &c.,  packed  in  boxes,  like  merchants'  goods,  will  go 
much  safer  and  cheaper  by  New  Orleans,  than  by*- any  of  the  inland 
routes.  I  have  received  more  than  one  hundred  packages  and  boxes 
from  eastern  ports,  by  that  route,  within  twenty  years,  and  never 
lost  one.  Boxes  should  be  marked  to  the  owner  or  his  agent  at  the 
river  port  where  destined,  and  to  the  charge  of  some  forwarding  house 
in  New  Orleans.  The  freight  and  charges  may  be  paid  when  the  boxes 
are  received. 

If  a  person  designs  to  remove  to  the  north  part  of  Ohio  and  Indiana, 
to  Chicago  and  vicinity,  or  to  Michigan,  or  Green  Bay,  his  course 
should  be  by  the  New  York  canal,  and  the  lakes.  .  .  . 

The  same  route  will  carry  emigrants  to  Cleaveland,  and  by  the  Ohio 
canal,  to  Columbus,  or  to  the  Ohio  river,  at  Portsmouth;  from  whence, 
by  steam-boat,  direct  communications  will  offer  to  any  river  port 
in  the  Western  States.  From  Buffalo,  steam-boats  run  constantly 
(when  the  lake  is  open),  to  Detroit,  stopping  at  Erie,  Ashtabula, 
Cleaveland,  Sandusky  and  many  other  ports,  from  whence  stages 
run  to  every  prominent  town.  Transportation-wagons  are  employed 
in  forwarding  goods.  .  .  . 

1  A  New  Guide  for  Emigrants  to  the  West.     By  J.  M.  Peck  (Boston,  1837),  372-5- 


350  READINGS  IN  ECONOMIC  HISTORY 

The  most  expeditious,  pleasant  and  direct  route  for  travelers  to 
the  southern  parts  of  Ohio  and  Indiana;  to  the  Illinois  river,  as  far 
north  as  Peoria;  to  the  Upper  Mississippi,  as  far  as  Quincy,  Rock 
Island,  Galena  and  Prairie  du  Chien;  to  Missouri,  and  to  Kentucky, 
Tennessee,  Arkansas,  Natchez  and  New  Orleans,  is  one  of  the  southern 
routes.  These  are,  —  i.  From  Philadelphia  to  Pittsburgh,  by  rail- 
roads and  the  Pennsylvania  canal;  2.  By  the  Baltimore  and  Ohio 
rail-road  and  stages,  to  Wheeling;  or,  3.  For  people  living  to  the 
south  of  Washington,  by  stage,  by  the  way  of  Charlottesville,  (Vir- 
ginia,) Staunton,  the  Hot,  Warm,  and  White-Sulphur  Springs,  Lewis- 
burg,  Charlestown,  to  Guyandotte,  from  whence  a  regular  line  of 
steam-boats  runs  three  times  a  week  to  Cincinnati.  Intermediate 
routes  from  Washington  city  to  Wheeling,  or  to  Harper's  Ferry,  to 
Fredericksburg,  and  intersect  the  route  through  Virginia,  at  Char- 
lottesville. 

D.    Modes  of  Traveling,  i8i8l 

In  addition  to  pointing  out  routes  to  the  western  country,  Mr.  Fearon  gives 
immigrants  advice  as  to  modes  of  traveling  and  to  the  kinds  of  equipment  to  be 
provided  as  follows: 

Mechanics,  intending  to  continue  as  such,  would  do  well  to  remain 
in  New  York,  Baltimore,  or  Philadelphia,  until  they  become  familiar- 
ised with  the  country.  Persons  designing  to  settle  in  the  western 
States  will  save  some  expences  by  landing  in  Philadelphia.  Those 
to  whom  a  few  pounds  is  not  an  object,  will  shorten  their  voyage  two 
or  three  days  by  arriving  at  New  York.  The  summer  route  from 
thence  to  Philadelphia  is  particularly  pleasant,  with  the  exception  of 
25  miles  land-carriage,  and  sleeping  one  night  on  the  road:  the  whole 
can  be  completed  for  about  ten  dollars.  In  winter,  there  are  excellent 
stages  (by  far  the  best  in  America)  from  New  York  to  Philadelphia: 
the  fare  is  from  eight  to  ten  dollars,  and  the  journey  is  completed  in 
fourteen  hours,  —  distance,  96  miles. 

The  route  to  the  western  country,  by  way  of  New  Orleans,  is  at- 
tended with  many  disadvantages:  it  is  much  longer,  and  more  danger- 
ous, in  consequence  of  a  great  deal  of  coasting,  and  the  difficulties  of 
the  gulph  of  Florida.  The  voyage  from  the  Balaize,  at  the  junction  of 
the  Mississippi  with  the  gulph  of  Mexico,  to  New  Orleans,  though 
but  100  miles,  is  always  tedious,  and  sometimes  vessels  are  three  weeks 
in  getting  up  that  distance.  The  yellow  fever  is  of  annual  occurrence 


Sketches  of  America.     By  Henry  Bradshaw  Fearon  (London,  1819),  452-4. 


THE  WESTWARD   MOVEMENT  351 

at  New  Orleans.  The  steam-boats,  though  numerous,  do  not  proceed 
at  stated  periods,  and  a  residence  at  New  Orleans  may  be  long,  and 
must  be  expensive;  and  to  engage  a  passage  in  a  keel-boat  up  the  stream, 
would  be  an  almost  endless  undertaking. 

The  best  mode,  in  my  judgment,  is  to  proceed  from  Philadelphia 
by  way  of  Pittsburgh.  Horseback  is  very  preferable  to  the  stage, 
particularly  on  the  Allegany  mountains.  A  poor  family  would  have 
their  baggage  conveyed  in  the  cheapest  way  by  the  regular  stage- 
waggons,  —  themselves  walking ;  and  this  they  will  find  in  crossing 
the  mountains  to  be  better  than  riding  (except  on  horseback.)  They 
should  take  with  them  as  good  a  stock  of  eatables  as  they  can  with  con- 
venience, the  charges  on  the  road  being  very  extravagant.  Those 
who  have  their  own  waggons  should  have  them  made  as  strong  as 
possible,  and  their  horses  .should  be  in  good  condition.  Small  articles 
of  cutlery,  and  all  the  machinery  necessary  for  repairs  on  the  road,  are 
of  first  necessity.  When  arrived  at  Pittsburgh,  the  cheapest  and 
easiest  mode  of  travelling  is  to  float  down  the  river ;  for  which  purpose 
there  are  boats  of  almost  every  variety,  (steam-boats  excepted,)  from 
2  s.  3  d.  upwards,  per  hundred  miles.  Upon  this  mode  of  travelling  I 
do  not  enlarge:  half  an  hour's  residence  in  Pittsburgh  will  convey 
more  information  than  I  could  in  twenty  pages.  Warm  clothing 
should  be  taken,  as  there  is  sure  to  be  some  severe  weather  in  every  part 
of  America.  The  articles  required  in  floating  down  the  river  will  be 
nearly  as  follows: — The  "Pittsburgh  Navigator,"  a  small  volume, 
and  which  may  be  had  at  Cramer  and  Spears;  nails,  hammer,  hatchet, 
tinder-box,  box  for  fire,  gridiron,  iron  pot,  coffee-pot,  coffee-mill, 
tea-pot,  plates,  spoons,  knives  and  forks,  mugs,  candles,  coffee,  tea, 
sugar,  spirits,  meat,  potatoes,  bread,  pens  and  ink,  paper,  medicine, 
and  a  gun.  If  there  is  what  is  called  "a  good  stage  of  water,"  that  is, 
if  the  waters  of  the  Ohio  are  high,  which  they  always  are  in  the  spring 
and  autumn,  boats  will  be  taken  by  the  stream,  without  rowing,  from 
three  to  four  miles  per  hour.  Except  in  cases  of  dense  fog,  they  can 
be  allowed  to  float  at  night  in  the  Ohio.  In  the  Mississippi  this  would 
not  be  safe,  the  navigation  of  the  latter  river  being  both  difficult  and 
dangerous.  Unless  the  waters  of  the  Ohio  are  very  high  at  its  falls 
near  Louisville,  a  pilot  should  be  engaged  to  navigate  the  boat  over 
them. 


352  READINGS  IN  ECONOMIC  HISTORY 

III.    MOVING  WESTWARD 
A.    Down  the  Ohio  River;  i82ol 

One  of  the  most  used  routes  to  the  western  country  was  the  Ohio  River,  for  it 
was  an  easy  matter  for  the  emigrant  to  buy  or  build  a  rude  flatboat  on  which  he 
carried  his  possessions  to  his  new  home  in  the  west.  James  Hall,  the  best  -known 
literary  man  of  his  time  in  the  Mississippi  Valley,  describes  one  of  these  flatboats 
as  he  saw  it,  as  follows: 

To-day  we  passed  two  large  rafts  lashed  together,  by  which  simple 
conveyance  several  families  from  New  England  were  transporting 
themselves  and  their  property  to  the  land  of  promise  in  the  western 
woods.  Each  raft  was  eighty  or  ninety  feet  long,  with  a  small  house 
erected  on  it;  and  on  each  was  a  stack  of  hay,  round  which  several 
horses  and  cows  were  feeding,  while  the  paraphernalia  of  a  farm-yard, 
the  ploughs,  waggons,  pigs,  children,  and  poultry,  carelessly  distrib- 
uted, gave  to  the  whole  more  the  appearance  of  a  permanent  resi- 
dence, than  of  a  caravan  of  adventurers  seeking  a  home.  ...  In  this 
manner  these  people  travel  at  a  slight  expense.  They  bring  their 
own  provisions;  their  raft  floats  with  the  current;  and  honest  Jona- 
than, surrounded  with  his  scolding,  grunting,  squalling,  and  neighing 
dependents,  floats  to  the  point  proposed  without  leaving  his  own  fire- 
side; and  on  his  arrival  there,  may  step  on  shore  with  his  house,  and 
commence  business,  like  a  certain  grave  personage,  who,  on  his  mar- 
riage with  a  rich  widow,  said  he  had  "nothing  to  do  but  to  walk  in 
and  hang  up  his  hat." 


B.     Travel  by  Land, 
Mr.  Birkbeck's  impressions  of  the  emigrants  moving  by  wagon  are  as  follows: 

We  have  n'ow  fairly  turned  our  backs  on  the  old  world,  and  find 
ourselves  in  the  very  stream  of  emigration.  Old  America  seems  to  be 
breaking  up,  and  moving  westward.  We  are  seldom  out  of  sight,  as 
we  travel  on  this  grand  track,  towards  the  Ohio,  of  family  groups, 
behind  and  before  us,  some  with  a  view  to  a  particular  spot,  close  to  a 
brother  perhaps,  or  a  friend,  who  has  gone  before,  and  reported  well 
of  the  country.  Many  like  ourselves,  when  they  arrive  in  the  wilder- 
ness, will  find  no  lodge  prepared  for  them. 

A  small  waggon  (so  light  that  you  may  almost  carry  it,  yet  strong 
enough  to  bear  a  good  load  of  bedding,  utensils  and  provisions,  and  a 

1  Letters  from  the  West.     By  The  Hon.  Judge  [James]  Hall  (London,  1828),  87-8. 

2  Notes  on  a  Journey  in  America,  etc.     By  Morris  Birkbeck  (London,  1818),  31-3. 


THE  WESTWARD   MOVEMENT  353 

swarm  of  young  citizens,  —  and  to  sustain  marvellous  shocks  in  its 
passage  over  these  rocky  heights)  with  two  small  horses;  sometimes 
a  cow  or  two,  comprises  their  all;  excepting  a  little  store  of  hard- 
earned  cash  for  the  land  office  of  the  district;  where  they  may  obtain 
a  title  for  as  many  acres  as  they  possess  half-dollars,  being  one  fourth 
of  the  purchase  money.  The  waggon  has  a  tilt,  or  cover,  made  of  a 
sheet,  or  perhaps  a  blanket.  The  family  are  seen  before,  behind,  or 
within  the  vehicle,  according  to  the  road  or  weather,  or  perhaps  the 
spirits  of  the  party. 

The  New  Englanders,  they  say,  may  be  known  by  the  cheerful 
air  of  the  women  advancing  in  front  of  the  vehicle;  the  Jersey  people 
by  their  being  fixed  steadily  within  it;  whilst  the  Pennsylvanians 
creep  lingering  behind,  as  though  regretting  the  homes  they  have  left. 
A  cart  and  single  horse  frequently  afford  the  means  of  transfer,  some- 
times a  horse  and  pack-saddle.  Often  the  back  of  the  poor  pilgrim 
bears  all  his  effects,  and  his  wife  follows,  naked-footed,  bending  under 
the  hopes  of  the  family. 


C.    Spirit  of  the  Emigrant,  1820 1 

Emigrants  from  the  thickly  settled  portions  of  the  Atlantic  seaboard  no  doubt 
left  their  old  homes  for  the  west  with  a  feeling  of  mingled  joy  and  sorrow, —  sorrow  at 
leaving  friends  and  relatives  behind,  joy  at  the  prospects  in  their  new  home. 

No  description  can  convey  any  adequate  idea  of  the  winding  paths, 
the  steep  acclivities,  the  overhanging  cliffs,  and  dark  ravines,  with 
which  these  Alpine  regions  abound  —  the  sublime  grandeur  of  the 
scenery,  or  the  difficulty  and  danger  of  the  roads.  At  the  time  of 
which  I  am  speaking,  the  turnpikes,  which  have  since  rendered  the 
passes  of  the  mountains  so  safe  and  easy,  were  not  completed;  and  if 
I  found  it  toilsome  in  the  extreme  to  accomplish  my  journey  on  horse- 
back, you  may  conceive  the  almost  insurmountable  difficulties  pre- 
sented to  weary-laden  wanderers,  encumbered  with  waggons  and 
baggage;  yet  I  found  these  roads  crowded  with  emigrants  of  every  de- 
scription, but  the  majority  were  of  the  poorest  class.  Here  I  would 
meet  a  few  lusty  fellows,  trudging  it  merrily  along ;  and  there  a  family, 
more  embarrassed,  and  less  cheerful :  now  a  gang  of  forty  or  fifty  souls, 
men,  women,  and  children;  and  now  a  solitary  pedestrian,  with  his 
oaken  staff,  his  bottle,  and  his  knapsack;  and,  once  a  day,  a  stage- 

1  Letters  from  the  West.     By  The  Hon.  Judge  [James]  Hall  (London,  1828), 
310-14. 


354  READINGS  IN  ECONOMIC  HISTORY 

load  of  tired  travellers,  dragged  heavily  towards  the  west.  Some- 
times I  beheld  a  gentleman  toiling  along  with  a  broken-down  vehicle, 
and  sometimes  encountered  the  solitary  horseman:  here  I  espied  the 
wreck  of  a  carriage,  or  the  remains  of  a  meal;  and  there  the  temporary 
shelter  which  had  protected  the  benighted  stranger.  At  one  time, 
beside  a  small  stream  rushing  through  a  narrow  glen,  I  encountered  a 
party  of  about  fourscore  persons,  with  two  or  three  waggons.  They 
had  halted  to  bait;  the  beasts  were  grazing  among  the  rocks,  the 
men  cleaving  wood  for  fires,  and  boughs  to  erect  a  tenement  for  the 
hour;  the  women  cooking  or  nursing  their  children,  and  the  rosy  boys 
and  girls  dabbling  in  a  waterfall.  When,  from  the  summit  of  a  moun- 
tain, or  one  of  its  precipices,  where  the  road  wound  beneath  my  feet, 
appearing  at  intervals  as  far  as  the  eye  could  reach,  I  beheld  one  of 
these  large  caravans,  composed  of  half-clad  beings,  of  every  age  and 
sex,  slowly  winding  up  the  mountain  path,  or  reclining  at  mid-day 
among  the  rocks,  I  could  compare  them  only  to  the  gipsy  bands, 
described  by  foreign  novelists. 

At  one  of  the  most  difficult  passes  of  the  mountain  I  met  a  caval- 
cade, whose  description  will  apply  to  a  numerous  class;  they  were 
from  New  England.  The  senior  of  the  party  was  a  middle-aged  man, 
hale,  well  built,  and  decently  clad.  He  was  guiding  a  pair  of  small, 
lean,  active  horses,  harnessed  to  a  light  waggon,  which  contained  the 
bedding,  and  provisions  of  the  party,  and  a  few  articles  of  household 
furniture;  two  well-grown,  barefoot  boys,  in  home-spun  shirts  and 
trowsers,  held  the  tail  of  the  waggon,  laudably  endeavouring  to  prevent 
an  upset,  by  throwing  their  weight  occasionally  to  that  side  which 
seemed  to  require  ballast,  while  the  father  exerted  his  arms,  voice,  and 
whip,  in  urging  forward  his  ponies.  In  the  rear  toiled  the  partner  of 
his  pilgrimage,  conducting,  like  John  Rodgers'  wife,  "nine  small 
children  and  one  at  the  breast,"  and  exhibiting,  in  her  own  person  and 
those  of  her  offspring,  ample  proof,  that  whatever  might  be  the  char- 
acter of  the  land  to  which  they  were  hastening,  that  which  they  had 
left  was  not  deficient  in  health  or  fruitfulness.  Nor  must  I  omit  to 
mention  a  chubby  boy  of  six  years  old,  who  by  sundry  falls  and  immer- 
sions, had  acquired  the  hue  of  the  soil  from  head  to  foot,  and  though 
now  trudging  knee-deep  in  the  mire,  was  craunching  an  apple  with 
the  most  entire  composure.  They  had  reached  the  summit  of  the 
mountain  just  as  I  overtook  them,  and  as  they  halted  to  rest,  I  checked 
my  horse  to  observe  them.  As  they  stretched  their  eyes  forward  over 
the  interminable  prospect,  they  were  wrapped  in  silent  wonder.  As 
far  as  the  vision  could  extend  there  was  nothing  to  intercept  it;  be- 


THE  WESTWARD   MOVEMENT  355 

•leath  our  feet  lay  mountains,  and  vallies,  and  forests,  and  rivers,  all 
of  which  must  be  passed  before  these 

"Sad  unravellers 
Of  the  mazes  to  the  mountain's  top," 

could  reach  the  land  of  promise,  which  they  imagined  they  could  now 
dimly  discern  in  the  distant  horizon.  They  looked  back  with  a  kind 
of  shuddering  triumph  at  what  they  had  accomplished;  they  looked 
forward  with  a  trembling  hope  at  what  was  to  come.  I  thought  I 
could  see  in  their  faces  regret,  hope,  fear,  resignation  —  but  they 
spoke  cheerfully,  and  expressed  no  dissatisfaction;  and  after  answering 
their  inquiries  as  to  their  route  onward,  I  left  them.  Tired  souls! 
they  have,  probably,  long  ere  this,  surmounted  their  fatigues,  and 
found  a  happy  home  in  a  land  of  plenty,  where,  surrounded  with  fat 
pigs  and  fat  children,  they  enjoy  the  only  true  otium  cum  dignitate; 
while  I,  delving  among  the  labyrinths  of  the  law,  find  mazes  more 
intricate,  and  steeps  more  arduous,  than  the  winding  paths  of  the 
mountain. 

D.     On  the  National  Road,  1840^ 

The  most  important  land  route  from  the  east  to  the  west  was  the  National 
Road.  This  road  was  built  by  the  National  Government  as  far  westward  as  Van- 
dalia,  Illinois.  An  English  traveler,  J.  S.  Buckingham,  describes  a  scene  on  this 
road  as  follows: 

On  the  road  we  overtook  and  passed  a  great  number  of  waggons, 
perhaps  50,  in  the  course  of  the  day,  containing  emigrant  families 
going  still  further  West  —  to  Indiana  and  Illinois,  where  land  may 
still  be  had  at  one  dollar  and  a  quarter  per  acre.  It  is  therefore 
worth  while  for  them  to  make  long  journeys,  and  hoard  up  their 
resources,  to  put  themselves  in  possession  of  an  estate  large  enough 
for  the  whole  family,  if  they  will  only  go  far  west  enough  to  get  it  at 
a  cheap  price.  Of  these  emigrant  families,  there  were  often  12  or  15 
persons  in  each,  many  of  them  very  young  children;  a  covered  wag- 
gon, drawn  sometimes  by  two  horses,  though  frequently  by  one  only, 
contained  all  the  household  furniture,  and  provisions  for  the  way; 
and  the  women  and  young  children  were  piled  upon  these.  The  men 
and  the  elder  boys  walked  beside  the  wagon  —  and  they  made  a  jour- 
ney of  from  12  to  15  miles  a  day.  During  the  way  they  would  halt 
at  any  favourable  spot  that  presented  itself,  unharness  the  horse, 

1  Eastern  and  Western  States  of  America.     By  J.   S.   Buckingham   (London, 
[1842]),  II,  290-3. 


356  READINGS  IN  ECONOMIC  HISTORY 

and  let  it  loose  to  graze  in  the  woods,  while  the  parents  and  children 
would  get  their  utensils  for  preparing  a  meal,  or  be  engaged  in  washing, 
drying,  and  mending  their  clothes  by  the  wayside.  .  .  . 

Among  the  indications  of  this  being  the  high  road  for  emigrants 
to  the  west,  we  saw  several  houses  by  the  road-side,  expressly  for  their 
use,  with  the  signs  "Moovers'  Accommodation,"  —  others  with  more 
correct  orthography,  had  "House  for  Movers,"  —  and  a  third  had  the 
rather  ambiguous  words,  "Movers  taken  in  here."  At  the  same  time, 
while  the  movers  were  going  onward,  settlers  were  clearing  and  plant- 
ing all  along  the  edge  of  the  road.  We  saw  perhaps  100  log-cabins 
in  our  day's  ride,  —  some  not  a  week  old,  and  others  in  the  act  of 
putting  up. 

IV.   FRONTIER  CLASSES  or  POPULATION 
The  Restlessness  of  the  Frontiersman, 


The  westward  movement  was  in  reality  a  series  of  movements.  Those  who 
went  first  performed  their  tasks  and  then  made  way  for  the  next  wave,  which  was 
in  turn  succeeded  by  the  third.  A  careful  observer  has  described  this  movement 
as  follows: 

The  rough,  sturdy  habits  of  the  backwoodsmen,  living  in  that 
plenty  which  depends  on  God  and  nature,  have  laid  the  foundation 
of  independent  thought  and  feeling  deep  in  the  minds  of  western 
people. 

Generally,  in  all  the  western  settlements,  three  classes,  like  the 
waves  of  the  ocean,  have  rolled  one  after  the  other.  First,  conies  the 
pioneer,  who  depends  for  the  subsistence  of  his  family  chiefly  upon 
the  natural  growth  of  vegetation,  called  the  "range,"  and  the  proceeds 
of  hunting.  His  implements  of  agriculture  are  rude,  chiefly  of  his 
own  make,  and  his  efforts  directed  mainly  to  a  crop  of  corn,  and  a 
"truck  patch."  The  last  is  a  rude  garden  for  growing  cabbage, 
beans,  corn  for  roasting  ears,  cucumbers  and  potatoes.  A  log  cabin, 
and,  occasionally,  a  stable  and  corn-crib,  and  a  field  of  a  dozen  acres, 
the  timber  girdled  or  "deadened,"  and  fenced,  are  enough  for  his  occu- 
pancy. It  is  quite  immaterial  whether  he  ever  becomes  the  owner 
of  the  soil.  He  is  the  occupant  for  the  time  being,  pays  no  rent,  and 
feels  as  independent  as  the  "lord  of  the  manor."  With  a  horse, 
cow,  and  one  or  two  breeders  of  swine,  he  strikes  into  the  woods 
with  his  family,  and  becomes  the  founder  of  a  new  county,  or  per- 
haps State.  He  builds  his  cabin,  gathers  around  him  a  few  other 

1  A  New  Guide  for  Emigrants  to  the  West.     By  J.  M.  Peck  (Boston,  1837),  119-21. 


THE  WESTWARD   MOVEMENT  357 

families  of  similar  taste  and  habits,  and  occupies  till  the  range  is 
somewhat  subdued,  and  hunting  a  little  precarious,  or,  which  is  more 
frequently  the  case,  till  neighbors  crowd  around,  roads,  bridges  and 
fields  annoy  him,  and  he  lacks  elbow  room.  The  preemption  law 
enables  him  to  dispose  of  his  cabin  and  corn-field,  to  the  next  class 
of  emigrants,  and,  to  employ  his  own  figures,  he  "breaks  for  the  high 
timber,"  "clears  out  for  the  New  Purchase,"  or  migrates  to  Arkansas, 
or  Texas,  to  work  the  same  process  over. 

The  next  class  of  emigrants  purchase  the  lands,  add  field  to  field, 
clear  out  the  roads,  throw  rough  bridges  over  the  streams,  put  up 
hewn  log  houses,  with  glass  windows,  and  brick  or  stone  chimneys, 
occasionally  plant  orchards,  build  mills,  school-houses,  court-houses, 
&c.,  and  exhibit  the  picture  and  forms  of  plain,  frugal,  civilized  life. 

Another  wave  rolls  on.  The  men  of  capital  and  enterprise  come- 
The  "settler"  is  ready  to  sell  out,  and  take  the  advantage  of  the  rise 
of  property, — push  farther  into  the  interior,  and  become  himself,  a 
man  of  capital  and  enterprise  in  turn.  The  small  village  rises  to  a 
spacious  town  or  city;  substantial  edifices  of  brick,  extensive  fields, 
orchards,  gardens,  colleges  and  churches  are  seen.  Broadcloths, 
silks,  leghorns,  crapes,  and  all  the  refinements,  luxuries,  elegancies, 
frivolities  and  fashions,  are  in  vogue.  Thus  wave  after  wave  is 
rolling  westward: —  the  real  el  dorado  is  still  farther  on. 

A  portion  of  the  two  first  classes  remain  stationary  amidst  the 
general  movement,  improve  their  habits  and  condition,  and  rise  in 
the  scale  of  society. 

V.  ACTIVITIES  or  THE  WESTERN  COUNTRY 

Manufactures  and  Agriculture,  1832  l 

The  differences  in  climate  and  soil  of  the  western  country  gave  the  opportunity 
there  for  a  wide  field  of  activities.  By  far  the  greater  number  of  the  people  was 
engaged  in  agriculture,  but  here  and  there  manufactures  on  a  small  scale  were 
being  put  under  way.  Timothy  Flint  has  described  these  activities  as  follows: 

.  .  .  Western  Pennsylvania  is  a  manufacturing  region,  and  along 
with  Ohio,  is  the  New  England  of  the  West.  The  people  bring  down 
the  Alleghany,  clear  and  fine  pine  plank;  delivering  them  along  the 
whole  course  of  the  Ohio,  and  sending  great  quantities  even  to  New 
Orleans.  These  pines,  of  which  the  houses  in  New  Orleans  are  fin- 
ished, waved  over  the  streams  of  New  York,  and  are  despatched  in 

1  The  History  and  Geography  of  the  Mississippi  Valley.  By  Timothy  Flint 
(Cincinnati,  1832),  1, 147-50. 


358  READINGS  IN  ECONOMIC  HISTORY 

rafts  and  flat  boats,  after  being  sawed  into  plank,  from  Oleanne  point. 
From  the  Monongahela  is  sent  the  rye  whiskey,  which  is  so  famous 
in  the  lower  country.  On  the  Youghiogheny  and  Monongahela,  at 
Connelsville  on  the  former,  and  Brownsville  on  the  latter,  are  impor- 
tant manufactories,  chiefly  of  iron.  Pittsburgh  has  been  called  the 
Birmingham  of  America;  though  that  honor,  is  keenly  disputed  by 
her  rival  Cincinnati.  There  are  numerous  manufacturing  towns  in 
Ohio,  of  which,  after  Cincinnati,  Zanesville  and  Steubenville  are  the 
chief.  All  this  region,  in  numerous  streams,  calculated  for  water 
power,  in  a  salubrious  climate,  in  abundance  of  pit  coal,  in  its  posi- 
tion, and  the  genius  and  habits  of  its  inhabitants,  is  naturally  adapted 
to  become  a  manufacturing  country.  Materials  for  articles  of  prime 
necessity,  as  salt,  iron  and  glass,  exist  in  the  most  ample  abundance. 
Pittsburgh,  blackened  with  the  smoke  of  pit  coal,  and  one  quarter 
of  Cincinnati,  throwing  up  columns  of  smoke  from  the  steam  factories, 
may  be  considered  as  great  manufacturing  establishments.  If  we 
except  the  cordage,  bale  rope,  bagging,  and  other  articles  of  hempen 
fabric,  manufactured  in  Kentucky,  the  chief  part  of  the  western  manu- 
factures originates  in  west  Pennsylvania  and  Ohio.  There  are  some 
indications,  that  Indiana  will  possess  a  manufacturing  spirit;  and 
there  are  separate,  incipient  establishments  of  this  kind,  more  or 
less  considerable,  in  every  state,  but  Louisiana  and  Mississippi. 

These  manufactures  consist  of  a  great  variety  of  articles  of  prime 
necessity,  use  and  ornament.  The  principal  are  of  iron,  as  castings 
of  all  sorts;  and  almost  every  article  of  ironmongery,  that  is  manu- 
factured in  the  world.  This  manufacture  is  carried  on  to  an  immense 
extent. 

Glass  is  manufactured  in  various  places,  at  present,  it  is  supposed, 
nearly  to  an  amount,  to  supply  the  country.  Manufactures  in  woolen 
and  cotton,  in  pottery,  in  laboratories,  as  white  and  red  lead,  Prus- 
sian blue,  and  the  colors  generally,  the  acids  and  other  chemical 
preparations,  in  steam  power  machinery,  saddlery,  wheel  irons,  wire 
drawing,  buttons,  knitting  needles,  silver  plating,  Morocco  leather, 
articles  in  brass  and  copper,  hats,  boots  and  shoes,  breweries,  tin,  and 
other  metals,  cabinet  work;  in  short,  manufactures  subservient  to 
the  arts,  and  to  domestic  subsistence,  are  carried  on  at  various  places 
in  the  western  country  writh  great  spirit.  Ohio  has  imbibed  from  her 
prototype,  New  England,  manufacturing  propensities;  and  we  have 
heard  it  earnestly  contested,  that  her  capabilities  for  being  a  great 
manufacturing  country,  were  even  superior  to  those  of  New  England. 
It  is  affirmed,  that,  taking  the  whole  year  into  consideration,  her 


THE  WESTWARD   MOVEMENT  359 

climate  is  more  favorable  to  health,  and  there  can  be  no  question, 
that  in  her  abundance  of  fuel,  pit  coal,  and  iron  and  the  greater  pro- 
fusion of  the  raw  material  of  manufactures  in  general,  she  has  greatly 
the  advantage. 

In  the  state  of  Kentucky,  hemp  is  raised  to  a  considerable  extent; 
and  in  its  different  manufactures  constitutes  a  material  article  in 
her  exports.  Salt  is  manufactured  through  all  the  western  country 
in  sufficient  abundance  for  home  consumption.  Shoes,  hats  and 
clothing,  to  a  considerable  extent,  are  yet  imported  from  abroad  into 
some  of  the  western  states.  But  as  we  have  remarked,  the  far  greater 
part  of  the  people  are  farmers.  In  west  Pennsylvania  and  Virginia,  in 
Ohio  and  Kentucky,  in  Indiana,  Illinois,  Missouri,  and  a  part  of 
Tennessee,  the  same  articles  are  growrn,  and  sent  abroad,  to  wit, 
flour,  corn  and  the  small  grains;  pulse,  potatoes,  and  the  other 
vegetables;  fruit,  as  apples,  fresh  and  dried,  dried  peaches,  and  other 
preserved  fruits;  beef,  pork,  cheese,  butter,  poultry,  venison  hams, 
live  cattle,  hogs  and  horses.  The  greater  part  of  the  flour  is  sent 
from  Ohio  and  Kentucky;  though  Indiana,  Illinois  and  Missouri  are 
following  the  example  with  great  vigor.  Wheat  is  grown  with  more 
ease  in  Illinois  and  Missouri  than  in  the  other  states.  Ohio  has  gone 
considerably  into  the  culture  of  yellow  tobacco. —  Tobacco  is  one  of 
the  staples  of  Kentucky  export.  Cattle,  hogs  and  horses  are  sent  to 
New  Orleans  extensively  from  Illinois  and  Missouri,  as  are,  also, 
lead  and  peltries.  In  Arkansas,  part  of  Tennessee,  all  Alabama  and 
Mississippi,  cotton  is  the  chief  object  of  cultivation.  Grains,  and 
other  materials  of  nutriment,  are  only  raised  in  subservience  to 
this  culture.  The  cultivation  of  Louisiana,  and  a  part  of  Florida,  is 
divided  between  cotton  and  sugar. 

The  cultivation  in  all  the  states,  except  Ohio,  Indiana  and  Illinois 
is  chiefly  performed  by  slaves,  of  whose  character,  habits  and  condition 
we  have  yet  to  treat.  The  farms  in  Ohio  and  Indiana  are  generally 
of  moderate  size,  and  the  cultivators  do  not  materially  differ  in  their 
habits  from  those  of  the  northern  Atlantic  states.  In  Kentucky, 
Illinois  and  Missouri,  they  are  more  addicted  to  what  is  called  '  crop- 
ping,' that  is,  devoting  the  chief  attention  to  the  cultivation  of  one 
article.  In  all  the  states,  save  those,  that  cultivate  cotton  and  sugar, 
they  make,  on  an  average,  sixty  bushels  of  maize  to  the  acre:  and  the 
cultivation  consists  in  ploughing  two  or  three  times  between  the  rows, 
during  the  growing  of  the  crop.  From  eighty  to  an  hundred  bushels 
are  not  an  uncommon  crop,  and  manuring  is  scarcely  yet  thought  of 
in  cultivation.  The  good  lands  in  Illinois  and  in  Missouri  yield  from 


360  READINGS  IN  ECONOMIC  HISTORY 

twenty  five  to  thirty  bushels  of  wheat  to  the  acre.  The  cultivation 
is  on  prairie,  or  bottom  land;  and  as  the  soil  is  friable,  loose  and  per- 
fectly free  from  stones,  and  on  the  prairies  from  every  other  obstruc- 
tion, farming  is  not  laborious  and  difficult,  as  in  hard  rough,  and 
rocky  grounds.  The  ease  and  abundance,  with  which  all  the  articles 
of  the  country  are  produced,  is  one  of  the  chief  objects  of  complaint. 
The  necessary  result  is,  that  they  are  raised  in  such  abundance,  as 
to  glut  the  market  at  New  Orleans,  and  used  often  not  to  bring  enough 
to  pay  the  expenses  of  transportation.  All  this  has  been  recently  so 
changed  by  the  effects  of  our  canals,  the  rapid  influx  of  immigration, 
and  the  levelling  tendency  of  the  increased  facilities  of  transport, 
that  the  price  of  western  produce  is  fast  approximating  the  Atlantic 
value.  A  natural  result  of  this  order  of  things  will  be,  that  the  west 
will  soon  export  four  times  its  former  amount  of  flour,  and  other 
produce. 

From  the  cheapness  of  corn,  and  the  abundance  of  'mast,'  as  it 
is  called,  in  the  woods,  hogs,  too,  are  easily  multiplied,  far  beyond  the 
wants  of  the  people.  Pork  is  becoming  one  of  the  great  staples  of  all 
the  western  states,  except  those,  that  grow  cotton  and  sugar.  Cin- 
cinnati is  decidedly  the  largest  pork  market  in  the  United  States. 
Prodigious  numbers  of  swine  are  slaughtered  there,  and  the  business 
of  barrelling  it,  and  curing  bacon  for  exportation  is  one  of  the  most 
important  sources  of  its  trade.  Cattle,  and  swine  when  carried  to 
New  Orleans  command  a  fair  price.  Horses  are  an  important  and 
increasing  article  of  export.  Orchards  north  of  36°  prosper,  perhaps, 
better  than  in  any  other  country;  and  apples  and  cider  are  already 
important  articles  of  exportation,  and  will  soon  be  more  so;  for  no 
where  do  apple  trees  grow  with  more  rapidity  and  beauty,  and  sooner 
and  more  amply  load  themselves  with  fruit.  Venison  and  deer  skins, 
honey  and  beeswax  are  commonly  received  in  the  country  stores, 
in  pay  for  goods.  From  Missouri,  peltries,  furs  and  lead,  from  the 
Illinois  mines,  and  from  those  in  the  Missouri  mine  region,  are  the 
chief  articles  of  present  export. 

VI.  IN  THE  NEW  COUNTRY 

A.    Locating  and  Building  a  Home,  1832  l 

Once  in  his  new  home,  the  settler  was  compelled  to  adapt  himself  to  his  new 
surroundings.  He  took  the  first  means  at  hand  to  construct  his  house  and  barn. 
In  this  work  he  was  assisted  by  his  neighbors,  who  rendered  service  to  every 

1  The  History  and  Geography  of  the  Mississippi  Valley.     By  Timothy  Flint 
(Cincinnati,  1832),  I,  184-7,  190-2. 


THE  WESTWARD   MOVEMENT  361 

new  comer  and  expected  similar  service  in  turn.  The  homes  varied  according  to 
the  locality  and  to  the  wealth  of  the  owners,  but  in  general  they  were  of  one  type. 
Timothy  Flint  had  many  opportunities  of  seeing  the  emigrant  in  his  new  home, 
and  describes  his  activities  in  making  a  home  as  follows: 

The  chances  are  still  more  favorable  for  the  immigrants  from  Vir- 
ginia, the  two  Carolinas  and  Georgia,  who,  from  their  habits  and 
relative  position,  still  immigrate,  after  the  ancient  fashion,  in  the 
southern  wagon.  This  is  a  vehicle  almost  unknown  at  the  north, 
strong,  comfortable,  commodious,  containing  not  only  a  movable 
kitchen,  but  provisions  and  beds.  Drawn  by  four  or  six  horses,  it 
subserves  all  the  various  intentions  of  house,  shelter  and  transport; 
and  is,  in  fact,  the  southern  ship  of  the  forests  and  prairies.  The 
horses,  that  convey  the  wagon,  are  large  and  powerful  animals,  followed 
by  servants,  cattle,  sheep,  swine,  dogs,  the  whole  forming  a  primitive 
caravan  not  unworthy  of  ancient  days,  and  the  plains  of  Mamre. 
The  procession  moves  on  with  power  in  its  dust,  putting  to  shame  and 
uncomfortable  feelings  of  comparison  the  northern  family  with  their 
slight  wagons,  jaded  horses  and  subdued,  though  jealous  countenances. 
Their  vehicle  stops;  and  they  scan  the  strong  southern  hulk,  with  its 
chimes  of  bells,  its  fat  black  drivers  and  its  long  train  of  concomitants, 
until  they  have  swept  by. 

Perhaps  more  than  half  the  northern  immigrants  arrive  at  present 
by  way  of  the  New  York  canal  and  lake  Erie.  If  their  destination  be 
the  upper  waters  of  the  Wabash,  they  debark  at  Sandusky,  and  con- 
tinue their  route  without  approaching  the  Ohio.  The  greater  number 
make  their  way  from  the  lake  to  the  Ohio,  either  by  the  Erie  and 
Ohio,  or  the  Dayton  canal.  From  all  points,  except  those  west  of  the 
Guyandot  route  and  the  national  road,  when  they  arrive  at  the 
Ohio,  or  its  navigable  waters,  the  greater  number  of  the  families  'take 
water.'  Emigrants  from  Pennsylvania  will  henceforward  reach  the 
Ohio  on  the  great  Pennsylvania  canal,  and  will  'take  water'  at  Pitts- 
burgh. If  bound  to  Indiana,  Illinois  or  Missouri,  they  build,  or  pur- 
chase a  family  boat.  Many  of  these  boats  are  comfortably  fitted  up, 
and  are  neither  inconvenient,  nor  unpleasant  floating  houses.  Two 
or  three  families  sometimes  fit  up  a  large  boat  in  partnership,  purchase 
an '  Ohio  pilot,'  a  book  that  professes  to  instruct  them  in  the  mysteries 
of  navigating  the  Ohio ;  and  if  the  Ohio  be  moderately  high,  and  the 
weather  pleasant,  this  voyage,  unattended  with  either  difficulty  or 
danger,  is  ordinarily  a  trip  of  pleasure.  We  need  hardly  add,  that  a 
great  number  of  the  wealthier  emigrant  families  take  passage  in  a 
steam  boat. 


362  READINGS  IN  ECONOMIC  HISTORY 

While  the  southerner  finds  the  autumnal  and  vernal  season  on  the 
Ohio  too  cool,  to  the  northerner  it  is  temperate  and  delightful.  When 
the  first  wreaths  of  morning  mist  are  rolled  away  from  the  stream  by 
the  bright  sun,  disclosing  the  ancient  woods,  the  hoary  bluffs,  and  the 
graceful  curves  and  windings  of  the  long  line  of  channel  above  and 
below,  the  rich  alluvial  belt  and  the  fine  orchards  on  its  shores,  the 
descending  voyagers  must  be  destitute  of  the  common  perceptions  of 
the  beautiful,  if  they  do  not  enjoy  the  voyage,  and  find  the  Ohio,  in 
the  French  phrase,  La  belle  riviere. 

After  the  immigrants  have  arrived  at  Cincinnati,  Lexington, 
Nashville,  St.  Louis,  or  St.  Charles,  in  the  vicinity  of  the  points, 
where  they  had  anticipated  to  fix  themselves,  a  preliminary  difficulty, 
and  one  of  difficult  solution  is,  to  determine  to  what  quarter  to  repair. 
All  the  towns  swarm  with  speculating  companies  and  land  agents; 
and  the  chance  is,  that  the  first  inquiries  for  information  in  this  per- 
plexity will  be  addressed  to  them,  or  to  persons  who  have  a  common 
understanding  and  interest  with  them.  The  published  information, 
too,  comes  directly  or  indirectly  from  them,  in  furtherance  of  their 
views.  One  advises  to  the  Wabash,  and  points  on  the  map  to  the 
rich  lands,  fine  mill  seats,  navigable  streams  and  growing  towns  in 
their  vicinity.  Another  presents  a  still  more  alluring  picture  of  the 
lands  in  some  part  of  Illinois,  Missouri,  the  region  west  of  the  lakes, 
and  the  lead  mines.  Another  tempts  him  with  White  River,  Arkan- 
sas, Red  River,  Opelousas,  and  Attakapas,  the  rich  crops  of  cotton 
and  sugar,  and  the  escape  from  winter,  which  they  offer.  Still  another 
company  has  its  nets  set  in  all  the  points,  where  immigrants  congre- 
gate, blazoning  all  the  advantages  of  Texas,  and  the  Mexican  country. 
In  Cincinnati,  more  than  in  any  other  town,  there  are  generally  pre- 
cursors from  all  points  of  the  compass,  to  select  lands  for  companies, 
that  are  to  follow.  There  are  such  here  at  present  both  from  Europe 
and  New  England;  and  we  read  advertisements,  that  a  thousand 
persons  are  shortly  to  meet  at  St.  Louis  to  form  a  company  to  cross 
the  Rocky  Mountains,  with  a  view  to  select  settlements  on  the 
Oregon. 

When  this  slow  and  perplexing  process  of  balancing,  comparing 
and  fluctuating  between  the  choice  of  rivers,  districts,  climates  and 
advantages,  is  fixed,  after  determination  has  vibrated  backwards  and 
forwards  according  to  the  persuasion  and  eloquence  of  the  last  adviser, 
until  the  purpose  of  the  immigrant  is  fixed,  the  northern  settler  is 
generally  borne  to  the  point  of  debarkation,  nearest  his  selected  spot, 
by  water.  He  thence  hires  the  transport  of  his  family  and  movables 


THE   WESTWARD   MOVEMENT  363 

to  the  spot;  though  not  a  few  northern  emigrants  move  all  the  distance 
in  wagons.  The  whole  number  from  the  north  far  exceeds  that  from 
the  south.  But  they  drop,  in  noiseless  quietness,  into  their  position, 
and  the  rapidity  of  their  progress  in  settling  a  country  is  only  pre- 
sented by  the  startling  results  of  the  census. 

The  southern  settlers  who  immigrate  to  Missouri  and  the  country 
south  west  of  the  Mississippi,  by  their  show  of  wagons,  flocks  and 
numbers  create  observation,  and  are  counted  quite  as  numerous,  as 
they  are.  Ten  wagons  are  often  seen  in  company.  It  is  a  fair  allow- 
ance, that  a  hundred  cattle,  beside  swine,  horses  and  sheep,  and  six 
negroes  accompany  each.  The  train,  with  the  tinkling  of  an  hundred 
bells,  and  the  negroes,  wearing  the  delighted  expression  of  a  holiday 
suspension  from  labor  in  their  countenances,  forming  one  group,  and 
the  family  slowly  moving  forward,  forming  anpther,  as  the  whole  is 
seen  advancing  along  the  plains,  it  presents  a  pleasing  and  picturesque 
spectacle. 

They  make  arrangements  at  night  fall  to  halt  at  a  spring,  where 
there  is  wood  and  water,  and  a  green  sward  for  encampment.  The 
dogs  raise  their  accustomed  domestic  baying.  The  teams  are  un- 
harnessed, and  the  cattle  and  horses  turned  loose  into  the  grass.  The 
blacks  are  busy  in  spreading  the  cheerful  table  in  the  wilderness,  and 
preparing  the  supper,  to  which  the  appetite  of  fatigue  gives  zest.  They 
talk  over  the  incidents  of  the  past  day,  and  anticipate  those  of  the 
morrow.  If  wolves  and  owls  are  heard  in  the  distance,  these  desert 
sounds  serve  to  render  the  contrast  of  their  society  and  security  more 
sensible.  In  this  order  they  plunge  deeper  and  deeper  into  the  forest 
or  prairie,  until  they  have  found  the  place  of  their  rest. 

The  position  for  a  cabin  generally  selected  by  the  western  settlers 
is  a  gentle  eminence  near  a  spring,  or  what  is  called  a  branch,  central 
to  a  spacious  tract  of  fertile  land.  Such  spots  are  generally  occupied 
by  tulip  and  black  walnut  trees,  intermixed  with  the  beautiful  cornus 
florida  and  red  bud,  the  most  striking  flowering  shrubs  of  the  western 
forest. 

Springs  burst  forth  in  the  intervals  between  the  high  and  low 
grounds.  The  brilliant  red  bird  seen  flitting  among  the  shrubs,  or 
perched  on  a  tree,  in  its  mellow  whistle  seems  welcoming  the  immigrant 
to  his  new  abode.  Flocks  of  paroquets  are  glittering  among  the  trees, 
and  gray  squirrels  are  skipping  from  branch  to  branch.  The  chanti- 
cleer rings  his  echoing  note  among  the  woods,  and  the  domestic  sounds 
and  the  baying  of  the  dogs  produce  a  strange  cheerfulness,  as  heard 
in  the  midst  of  trees,  where  no  habitation  is  seen.  Pleasing  reflections 


364  READINGS  IN  ECONOMIC  HISTORY 

and  happy  associations  are  naturally  connected  with  the  contempla- 
tion of  these  beginnings  of  social  toil  in  the  wilderness. 

In  the  midst  of  these  solitary  and  primeval  scenes  the  patient  and 
laborious  father  fixes  his  family.  In  a  few  days  a  comfortable  cabin 
and  other  out  buildings  are  erected.  The  first  year  gives  a  plentiful 
crop  of  corn,  and  common  and  sweet  potatoes,  melons,  squashes,  tur- 
nips and  other  garden  vegetables.  The  next  year  a  field  of  wheat  is 
added,  and  lines  of  thrifty  apple  trees  show  among  the  deadened  trees. 
If  the  immigrant  possess  any  touch  of  horticultural  taste,  the  finer 
kinds  of  pear,  plum,  cherry,  peach,  nectarine  and  apricot  trees  are 
found  in  the  garden.  In  ten  years  the  log  buildings  will  all  have  disap- 
peared, the  shrub  and  forest  trees  will  be  gone.  The  arcadian  aspect 
of  humble  and  retired  abundance  and  comfort  will  have  given  place 
to  a  brick  house,  or  a  planted  frame  house,  with  fences  and  out  build- 
ings very  like  those,  that  surround  abodes  in  the  olden  countries.  .  .  . 

The  first  business  is  to  clear  away  the  trees  from  the  spot  where 
the  house  is  to  stand.  The  general  construction  of  a  west  country 
cabin  is  after  the  following  fashion.  Straight  trees  are  felled  of  a 
size,  that  a  common  team  can  draw,  or  as  the  phrase  is  'snake,'  them 
to  the  intended  spot.  The  common  form  of  a  larger  cabin  is  that, 
called  a  'double  cabin;'  that  is,  two  square  pens  with  an  open  space 
between,  connected  by  a  roof  above  and  a  floor  below,  so  as  to  form  a 
parallelogram  of  nearly  triple  the  length  of  its  depth.  In  the  open 
space  the  family  take  their  meals  during  the  pleasant  weather;  and 
it  serves  the  threefold  purpose  of  kitchen,  lumber  room,  and  dining 
room.  The  logs,  of  which  it  is  composed,  are  notched  on  to  one 
another,  in  the  form  of  a  square.  The  roof  is  covered  with  thin  splits 
of  oak,  not  unlike  staves.  Sometimes  they  are  made  of  ash,  and  in 
the  lower  country  of  cypress,  and  they  are  called  clap  boards.  Instead 
of  being  nailed,  they  are  generally  confined  in  their  place  by  heavy 
timbers,  laid  at  right  angles  across  them.  This  gives  the  roof  of  a  log 
house  an  unique  and  shaggy  appearance.  But  if  the  clap  boards  have 
been  carefully  prepared  from  good  timber  they  form  a  roof  sufficiently 
impervious  to  common  rains.  The  floors  are  made  from  short  and 
thick  plank,  split  from  yellow  ^poplar,  cotton  wood,  black  walnut,  and 
sometimes  oak.  They  are  confined  with  wooden  pins,  and  are  tech- 
nically called  'puncheons.' 

The  southern  people,  and  generally  the  more  wealthy  immigrants 
advance  in  the  first  instance  to  the  luxury  of  having  the  logs  hewed 
on  the  inside,  and  the  puncheon  floor  hewed,  and  planed,  in  which  case 
it  becomes  a  very  comfortable  and  neat  floor.  The  next  step  is  to 


THE  WESTWARD   MOVEMENT  365 

build  the  chimney,  which  is  constructed  after  the  French,  or  American 
fashion.  The  French  mode  is  a  smaller  quadrangular  chimney,  laid 
up  with  smaller  splits.  The  American  fashion  is  to  make  a  much  larger 
aperture,  laid  up  with  splits  of  great  size  and  weight.  In  both  forms 
it  tapers  upwards,  like  a  pyramid.  The  interstices  are  filled  with  a 
thick  coating  of  clay,  and  the  outside  plastered  with  clay  mortar, 
prepared  with  chopped  straw,  or  hay,  and  in  the  lower  country  with 
long  moss.  The  hearth  is  made  with  clay  mortar,  or,  where  it  can  be 
found,  sand  stones,  as  the  common  lime  stone  does  not  stand  the  fire. 
The  interstices  of  the  logs  in  the  room  are  first '  chincked ;'  that  is  to 
say,  small  blocks  and  pieces  of  wood  in  regular  forms  are  driven 
between  the  intervals,  made  by  laying  the  logs  over  each  other,  so  as 
to  form  a  kind  of  a  coarse  lathing  to  hold  the  mortar. 

The  doors  are  made  of  plank,  split  in  the  manner  mentioned  before, 
from  fresh  cut  timber;  and  they  are  hung  after  an  ingenious  fashion 
on  large  wooden  hinges,  and  fastened  with  a  substantial  wooden  latch. 
The  windows  are  square  apertures,  cut  through  the  logs,  and  are 
closed  during  the  cooler  nights  and  the  inclement  weather  by  wooden 
shutters.  The  kitchen  and  the  negro  quarters,  if  the  establishmenf 
have  slaves,  are  separate  buildings,  prepared  after  the  same  fashion; 
but  with  less  care,  except  in  the  article  of  the  closeness  of  their  roofs. 
The  grange,  stable  and  corn  houses  are  all  of  similar  materials,  varied 
in  their  construction  to  answer  their  appropriate  purposes.  About 
ten  buildings  of  this  sort  make  up  the  establishment  of  a  farmer  with 
three  or  four  free  hands,  or  half  a  dozen  slaves. 

The  field,  in  which  the  cabin  is  built,  is  generally  a  square  or  oblong 
enclosure,  of  which  the  buildings  are  the  centre,  if  the  owner  be  from 
the  south;  or  in  the  centre  of  one  side  of  the  square,  if  from  the  north. 
If  the  soil  be  not  alluvial,  a  table  area  of  rich  upland,  indicated  to  be 
such  by  its  peculiar  growth  of  timber,  is  selected  for  the  spot.  Nine 
tenths  of  the  habitations  in  the  upper  western  states  are  placed  near 
springs,  which  supply  the  family  with  water.  The  settlers  on  the 
prairies,  for  the  most  part,  fix  their  habitations  in  the  edges  of  the  wood, 
that  skirts  the  prairie,  and  generally  obtain  their  water  from  wells. 
The  inhabitants  of  the  lower  country,  on  the  contrary,  except  in  the 
state  of  Mississippi,  where  springs  are  common,  chiefly  supply  them- 
selves with  water  from  cisterns  filled  by  rain.  If  the  settlers  have 
slaves,  the  trees  are  carefully  cleared  away,  by  cutting  them  down  near 
the  ground.  That  part  of  the  timber,  which  cannot  be  used  either 
for  rails,  or  the  construction  of  the  buildings,  is  burned,  and  a  clearing 
is  thus  made  for  a  considerable  space  round  the  cabin.  In  the  remain- 


366  READINGS  IN  ECONOMIC  HISTORY 

ing  portion  of  the  field,  the  trees  undergo  an  operation,  called  by  the 
northern  people  '  girdling,'  and  by  the  southern  '  deadening.'  That  is, 
a  circle  is  cut,  two  or  three  feet  from  the  ground,  quite  through  the  bark 
of  the  tree,  so  as  completely  to  divide  the  vessels,  which  carry  on  the 
progress  of  circulation.  Some  species  of  trees  are  so  tenacious  of  life, 
as  to  throw  out  leaves,  after  having  suffered  this  operation.  But  they 
seldom  have  foliage,  after  the  first  year.  The  smaller  trees  are  all  cut 
down;  and  the  accumulated  spoils  of  vegetable  decay  are  burned 
together;  and  the  ashes  contribute  to  the  great  fertility  of  the  virgin 
soil.  If  the  field  contain  timber  for  rails,  the  object  is  to  cut  as  much 
as  possible  on  the  clearing;  thus  advancing  the  double  purpose  of 
clearing  away  the  trees,  and  preparing  the  rails,  so  as  to  require  the 
least  possible  distance  of  removal.  An  experienced  hand  will  split 
from  an  hundred  to  an  hundred  and  fifty  rails  in  a  day.  Such  is  the 
convenience  of  finding  them  on  the  ground  to  be  fenced,  that  Ken- 
tucky planters  and  the  southern  people  generally  prefer  timbered  land 
to  prairie;  notwithstanding  the  circumstance,  so  unsightly  and  incon- 
venient to  a  northern  man,  of  dead  trees,  stumps,  and  roots,  which, 
strewed  in  every  direction  over  his  field,  even  the  southern  planter 
finds  a  great  preliminary  impediment  in  the  way  of  cultivation.  The 
northern  people  prefer  to  settle  on  the  prairie  land,  where  it  can  be 
had  in  convenient  positions. 

The  rails  are  laid  zigzag,  one  length  running  nearly  at  right  angles 
to  the  other.  This  in  west  country  phrase,  is  '  worm  fence,'  and  in  the 
northern  dialect  'Virginia  fence.'  The  rails  are  large  and  heavy,  and 
to  turn  the  wild  cattle  and  horses  of  the  country,  require  to  be  laid  ten 
rails  or  six  feet  in  height.  The  smaller  roots  and  the  underbrush  are 
cleared  from  the  ground  by  a  sharp  hoe,  known  by  the  name  'grubbing 
hoe.'  This  implement,  with  a  cross  cut  saw,  a  whip  saw,  a  hand  saw, 
axes,  a  broad  axe,  an  adze,  an  augur,  a  hammer,  nails,  and  an  iron  tool 
to  split  clap  boards,  constitute  the  indispensable  apparatus  for  a  back- 
woodsman. The  smoke  house,  spring  house,  and  other  common 
appendages  of  such  an  establishment,  it  is  unnecessary  to  describe; 
for  they  are  the  same  as  in  the  establishment  of  the  farmers  in  the 
middle  and  southern  Atlantic  states. 

B.    E/ect  of  the  New  Home  on  the  Character  of  the  Emigrant,  1832  l 

While  the  frontier  offered  undreamed  of  advantages  to  the  settler,  it  at  the 
same  time  tested  his  courage  by  imposing  on  him  hardships  unknown  in  his 
old  home.  To  secure  the  one  it  was  necessary  to  undergo  the  other.  Moreover, 

1  The  History  and  Geography  of  the  Mississippi  Valley.  By  Timothy  Flint 
(Cincinnati,  1832),  I,  187-90. 


THE  WESTWARD   MOVEMENT  367 

as  each  settler  recalled  the  excellencies  of  his  old  associations,  and  compared  them 
with  a  feeling  of  regret  to  the  limitations  of  the  frontier  he  experienced  a  home 
sickness  which  too  often  forced  him  back  to  his  old  home  in  the  east,  thus  rob- 
bing him  of  the  opportunities  that  lay  all  around  him. 

It  is  a  wise  arrangement  of  providence,  that  different  minds  are 
endowed  with  different  tastes  and  predilections,  that  lead  some  to 
choose  the  town,  others  manufactures,  and  the  village  callings.  It 
seems  to  us  that  no  condition,  in  itself  considered,  promises  more 
comfort,  and  tends  more  to  virtue  and  independence,  than  that  of 
these  western  yeomen,  with  their  numerous,  healthy  and  happy  chil- 
dren about  them;  with  the  ample  abundance  of  their  granaries;  their 
habitation  surrounded  by  orchards,  the  branches  of  which  must  be 
propped  to  sustain  their  fruit,  beside  their  beautiful  streams  and  cool 
beach  woods,  and  the  prospect  of  settling  each  of  their  children  on 
similar  farms  directly  around  them.  Their  manners  may  have  some- 
thing of  the  roughness  imparted  by  living  in  solitude  among  the  trees; 
but  it  is  kindly,  hospitable,  frank,  and  associated  with  the  traits,  that 
constitute  the  stability  of  our  republic.  We  apprehend,  such  farmers 
would  hardly  be  willing  to  exchange  this  plenty ,  and  this  range  of  their 
simple  domains,  their  well  filled  granaries,  and  their  droves  of  domestic 
animals  for  any  mode  of  life,  that  a  town  can  offer. 

No  order  of  things  presents  so  palpable  a  view  of  the  onward  march 
of  American  institutions  as  this.  The  greater  portion  of  these  immi- 
grants, beside  their  wives,  a  few  benches  and  chairs,  a  bible  and  a  gun, 
commenced  with  little  more  than  their  hands.  Their  education  for 
the  most  part,  extended  no  farther  than  reading  and  writing,  and  their 
aspirations  had  never  strayed  beyond  the  desire  of  making  a  farm. 
But  a  sense  of  relative  consequence  is  fostered  by  their  growing  posses- 
sions, and  by  perceiving  towns,  counties,  offices  and  candidates  spring- 
ing up  around  them.  One  becomes  a  justice  of  peace,  another  a  county 
judge  and  another  a  member  of  the  legislative  assembly.  Each  one 
assumes  some  municipal  function,  pertaining  to  schools,  the  settle- 
ment of  a  minister,  the  making  of  roads,  bridges,  and  public  works. 
A  sense  of  responsibility  to  public  opinion,  self  respect,  and  a  due 
estimation  of  character  and  correct  deportment  are  the  consequences. 

This  pleasant  view  of  the  commencement  and  progress  of  an  immi- 
grant is  the  external  one.  Unhappily  there  is  another  point  of  view, 
from  which  we  may  learn  something  what  has  been  passing  in  his 
mind,  during  this  physical  onward  progress. 

All  the  members  of  the  establishment  have  been  a  hundred  times 
afflicted  with  that  gloomy  train  of  feeling,  for  which  we  have  no  better 


368  READINGS  IN  ECONOMIC  HISTORY 

name,  than  home  sickness.  All  the  vivid  perceptions  of  enjoyment 
of  the  forsaken  place  are  keenly  remembered,  the  sorrows  overlooked, 
or  forgotten.  The  distant  birth  place,  the  remembrance  of  years, 
that  are  gone,  returning  to  memory  amidst  the  actual  struggles  of 
forming  a  new  establishment,  an  effort  full  of  severe  labor,  living  in  a 
new  world,  making  acquaintance  with  a  new  nature,  competing  with 
strangers,  always  seeming  to  uneducated  people,  as  they  did  to  the 
ancients,  as  enemies,  these  contrasts  of  the  present  with  the  mellowed 
visions  of  memory  all  tend  to  bitterness.  We  never  understand,  how 
many  invisible  ties  of  habit  we  sever  in  leaving  our  country,  until  we 
find  ourselves  in  a  strange  land.  The  old  pursuits,  and  ways  of  passing 
time,  of  which  we  took  little  note,  as  they  passed,  where  there  are 
new  forms  of  society,  new  institutions,  new  ways  of  managing  every 
thing,  that  belongs  to  the  social  edifice,  in  a  word,  a  complete  change 
of  the  whole  circle  of  associations  feelings  and  habits,  come  over  the 
mind,  like  a  cloud. 

The  immigrant,  in  the  pride  of  his  remembrances,  begins  to  extol 
the  country,  he  has  left,  its  inhabitants,  laws,  institutions.  The 
listener  has  an  equal  stock  of  opposite  prejudices.  The  pride  of  the 
one  wounds  the  pride  of  the  other.  The  weakness  of  human  nature 
is  never  more  obvious,  than  in  these  meetings  of  neighbors  in  a  new 
country,  each  fierce  and  loud  in  extolling  his  own  country,  and  detract- 
ing from  all  others  in  the  comparison.  These  narrow  and  vile  preju- 
dices spread  from  family  to  family,  and  create  little  clans  political, 
social,  religious,  hating,  and  hated.  No  generous  project  for  a  school, 
church,  library,  or  public  institution,  on  a  broad  and  equal  scale,  can 
prosper,  amidst  such  an  order  of  things.  It  is  a  sufficient  reason, 
that  one  clan  proposes  it,  for  another  to  oppose  it.  All  this  springs 
from  one  of  the  deepest  instincts  of  our  nature,  a  love  of  country,  which, 
like  a  transplanted  tree,  in  removing  has  too  many  fibres  broken  off, 
to  nourish  at  once  in  a  new  soil.  The  immigrant  meets  with  sickness, 
misfortune,  disaster.  There  are  peculiar  strings  in  the  constitution 
of  human  nature,  which  incline  him  to  repine,  and  imagine,  that  the 
same  things  would  not  have  befallen  him  in  his  former  abode.  He 
even  finds  the  vegetables,  fruits,  and  meats,  though  apparently  finer, 
less  savory  and  nutritive,  than  those  of  the  old  country.  Under  the 
pressure  of  such  illusions,  many  an  immigrant  has  forsaken  his  cabin, 
returned  to  his  parent  country,  found  this  mockery  of  his  fancies  play- 
ing at  cross  purposes  with  him,  and  showing  him  an  abandoned  para- 
dise in  the  western  woods,  and  father  land  the  country  of  penury  and 
disaster.  A  second  removal,  perhaps,  instructs  him,  that  most  of  the 


THE  WESTWARD  MOVEMENT  369 

causes  of  our  dissatisfaction  and  disgust,  that  we  imagine  have  their 
origin  in  external  things,  really  exist  in  the  mind. 

To  the  emigrants  from  towns  and  villages  in  the  Atlantic  country, 
though  they  may  have  thought  little  of  religious  institutions  at  home, 
the  absence  of  the  church  with  its  spire,  and  its  sounds  of  the  church- 
going  bell,  of  the  village  bustle,  and  the  prating  of  the  village  tavern 
are  felt,  as  serious  privations.  The  religious  discourses  so  boisterous 
and  vehement,  and  in  a  tone  and  phrase  so  different  from  the  calm 
tenor  of  what  he  used  to  hear,  at  first  produce  a  painful  revulsion  not 
wholly  unmixed  with  disgust.  He  finds  no  longer  those  little  circles 
of  company,  into  which  he  used  to  drop,  to  relax  a  leisure  hour, 
which,  it  maybe,  were  not  much  prized  in  the  enjoyment;  but  are 
now  felt,  as  a  serious  want.  Nothing"  shocks  him  so  much,  as  to  see 
his  neighbor  sicken,  and  die,  unsolaced  b'y  the  voice  of  religious 
instruction  and  prayer,  and  carried  to  his  long  home  without  funeral 
services.  These  are  some  of  the  circumstances,  that,  in  the  new 
settlements,  call  up  the  tender  recollections  of  a  forsaken  home  to 
embitter  the  present. 

VII.    STAGES  OF  SETTLEMENT 

The  Frontier  Line,  1830,  1840,  1850,  1860 l 

The  extent  of  the  westward  movement  may  be  measured  with  approximate 
exactness  by  comparing  the  position  of  the  frontier  line  from  decade  to  decade. 

1830 

In  the  decade  from  1820  to  1830  other  territorial  changes  have 
occurred.  In  the  early  part  of  the  decade  the  final  transfer  of  Florida 
from  Spanish  jurisdiction  was  effected,  and  it  became  a  territory  of  the 
United  States.  Missouri  has  been  carved  from  the  southeastern  part 
of  the  old  Missouri  territory,  and  admitted  as  a  state.  Otherwise  the 
states  and  territories  have  remained  nearly  as  before.  Settlement 
during  the  decade  has  again  spread  greatly.  The  westward  extension 
of  the  frontier  does  not  appear  to  have  been  so  great  as  in  some  former 
periods,  the  energies  of  the  people  being  mainly  given  to  filling  up  the 
included  areas.  In  other  words,  the  decade  from  1810  to  1820  seems 
to  have  been  one  rather  of  blocking  out  work  which  the  succeeding 
decade  has  been  largely  occupied  in  completing. 

During  this  period  the  Indians,  especially  in  the  south,  have  still 

1  Tenth  Census.    Volume  on  Population  (Washington,  1883),  pp.  xvi-xviii. 


370  READINGS  IN  ECONOMIC  HISTORY 

delayed  settlement  to  a  great  extent.  The  Creeks  and  the  Cherokees 
in  Georgia  and  Alabama,  and  the  Choctaws  and  the  Chickasaws  in 
Mississippi,  occupy  large  areas  of  the  best  portions  of  those  states, 
and  successfully  resist  encroachment  upon  their  territory.  Georgia, 
however,  has  witnessed  a  large  increase  in  settlement  during  the 
decade.  The  settlements  which  have  heretofore  been  staid  on  the  line 
of  the  Altamaha  spread  westward  across  the  central  portion  of  the  state 
to  its  western  boundary,  where  they  have  struck  against  the  barrier  of 
the  Creek  territory.  Stopped  at  this  point,  they  have  moved  south- 
ward down  into  the  southwest  corner,  and  over  into  Florida,  extending 
even  to  the  Gulf  coast.  Westward  they  have  stretched  across  the 
southern  part  of  Alabama,  and  joined  that  body  of  settlement  which 
was  previously  formed  in  the  drainage-basin  of  the  Mobile  river.  The 
Louisiana  settlements  have  but  slightly  increased,  and  no  great  change 
appears  to  have  taken  place  in  Mississippi,  owing  largely  to  the  cause 
above  noted,  viz.,  the  occupancy  of  the  soil  by  Indians.  In  Arkansas 
the  spread  of  settlement  has  been  in  a  strange  and  fragmentary  way. 
A  line  reaches  from  Louisiana  up  the  Arkansas  river  to  the  state  line, 
where  it  is  stopped  abruptly  by  the  boundary  of  the  Indian  territory. 
It  extends  up  the  Mississippi,  and  joins  the  great  body  of  population 
in  Tennessee.  A  branch  extends  northeastward  from  near  Little 
Rock  to  the  northern  portion  of  the  state.  All  these  settlements  within 
Arkansas  territory  are  as  yet  very  sparse.  In  Missouri  the  principal 
extension  of  settlement  has  been  in  a  broad  belt  up  the  Missouri  river, 
reaching  to  the  present  site  of  Kansas  City,  at  the  mouth  of  the  Kansas 
river,  where  quite  a  dense  body  of  population  appears.  Settlement 
has  progressed  in  Illinois,  from  the  Mississippi  river  eastward  and 
northward,  covering  more  than  half  the  state.  In  Indiana  it  has  fol- 
lowed up  the  Wabash  river,  and  thence  has  spread  until  it  reaches 
nearly  to  the  north  line  of  the  state.  But  little  of  Ohio  remains  unset- 
tled. The  sparse  settlements  about  Detroit,  in  Michigan  territory, 
have  broadened  out,  extending  into  the  interior  of  the  state,  while 
isolated  patches  have  appeared  in  various  other  localities. 

Turning  to  the  more  densely  settled  parts  of  the  country,  we  find 
that  settlement  is  slowly  making  its  way  northward  in  Maine,  although 
discouraged  by  the  poverty  of  the  soil  and  the  severity  of  the  climate. 
The  unsettled  tract  in  northern  New  York  is  decreasing,  but  very 
slowly,  as  is  also  the  case  writh  the  unsettled  area  in  northern  Penn- 
sylvania. In  western  Virginia  the  unsettled  tracts  are  reduced  to 
almost  nothing,  wrhile  the  vacant  region  in  eastern  Tennessee,  on  the 
Cumberland  plateau,  is  rapidly  diminishing. 


THE  WESTWARD  MOVEMENT  371 

At  this  date,  1830,  the  frontier  line  has  a  length  of  5,300  miles,  and 
the  aggregate  area  now  embraced  between  the  ocean,  the  Gulf,  and  the 
frontier  line  is  725,406  square  miles.  Of  this,  however,  not  less  than 
97,389  square  miles  are  comprised  within  the  included  vacant  tracts, 
leaving  only  628,017  square  miles  as  the  settled  area  within  the  frontier 
line,  all  of  which  lies  .between  latitude  29°  15'  and  46°  15'  north,  and 
between  longitude  67°  and  95°  west. 

Outside  the  body  of  continuous  settlement  are  no  longer  found 
large  groups,  but  several  small  patches  of  population  appear  in  Ohio, 
Indiana,  Illinois,  Michigan,  and  Wisconsin,  aggregating  4,700  square 
miles,  making  a  total  settled  area,  in  1830,  of  632,717  square  miles. 
As  the  aggregate  population  is  12,866,020,  the  average  density  of  settle- 
ment is  20.3  to  the  square  mile. 

1840 

During  the  decade  ending  in  1840  the  state  of  Michigan  has  been 
created  with  its  present  limits,  the  remainder  of  the  old  territory  being 
known  as  Wisconsin  territory.  Iowa  territory  has  been  created  from 
a  portion  of  Missouri  territory,  embracing  the  present  state  of  Iowa 
and  the  western  part  of  Minnesota,  and  Arkansas  has  been  admitted 
to  the  Union. 

In  1840  we  find,  by  examining  the  map  of  population,  that  the 
process  of  filling  up  and  completing  the  work  blocked  out  between  1810 
and  1820  has  been  carried  still  further.  From  Georgia,  Alabama,  and 
Mississippi  the  Cherokee,  Creek,  Choctaw,  and  Chickasaw  Indians, 
who,  at  the  time  of  the  previous  census,  occupied  large  areas  in  these 
states,  and  formed  a  very  serious  obstacle  to  settlement,  have  been 
removed  to  the  Indian  territory,  and  their  country  has  been 
opened  up  to  settlement.  Within  the  two  or  three  years  which 
have  elapsed  since  the  removal  of  these  Indians  the  lands 
relinquished  by  them  have  been  entirely  taken  up,  and  the 
country  has  been  covered  with  a  comparatively  dense  settlement. 
In  northern  Illinois,  the  Sac  and  Fox  and  Pottawatomie  tribes  having 
been  removed  to  the  Indian  territory,  their  country  has  been  promptly 
taken  up,  and  we  find  now  settlements  carried  over  the  whole  extent 
of  Indiana,  Illinois,  and  across  Michigan  and  Wisconsin  as  far  north 
as  the  43d  parallel.  Population  has  crossed  the  Mississippi  river  into 
Iowa  territory,  and  occupies  a  broad  belt  up  and  down  that  stream. 
In  Missouri  the  settlements  have  spread  northward  from  the  Missouri 
river  nearly  to  the  boundary  of  the  state,  and  southward  till  they  cover 
most  of  the  southern  portion,  and  make  connection  in  two  places  with 


372  READINGS  IN  ECONOMIC  HISTORY 

the  settlements  of  Arkansas.  The  unsettled  area  found  in  southern 
Missouri,  together  with  that  in  northwestern  Arkansas,  is  due  to  the 
hilly  and  rugged  nature  of  the  country,  and  to  the  poverty  of  the  soil, 
as  compared  with  the  rich  prairie  lands  all  around.  In  Arkansas  the 
settlements  remain  sparse,  and  have  spread  widely  away  from  the 
streams,  covering  much  of  the  prairie  parts  of  the  state.  There  is, 
beside  the  area  in  northwestern  Arkansas  just  mentioned,  a  large  area 
in  the  northeastern  part  of  the  state,  comprised  almost  entirely  within 
the  alluvial  regions  of  the  St.  Francis  river,  and  also  one  in  the  southern 
portion,  extending  over  into  northern  Louisiana,  which  is  entirely  in 
the  fertile  prairie  section.  The  fourth  unsettled  region  lies  in  the 
southwest  part  of  the  state. 

In  the  older  states  we  note  a  gradual  decrease  in  the  unsettled 
areas,  as  in  Maine  and  in  New  York.  In  northern  Pennsylvania  the 
unsettled  section  has  entirely  disappeared.  A  small  portion  of  the 
unsettled  patch  on  the  Cumberland  plateau  still  remains.  In  southern 
Georgia  the  Okeefenokee  swamp  and  the  pine  barrens  adjacent  have 
thus  far  repelled  settlement,  although  population  has  increased  in 
Florida,  passing  entirely  around  this  area  to  the  south.  The  greater 
part  of  Florida,  however,  including  nearly  all  the  peninsula  and  several 
large  areas  along  the  Gulf  coast,  still  remains  without  settlement. 
This  is  doubtless  due,  in  part  to  the  nature  of  the  country,  being 
alternately  swamp  and  hummock,  and  in  part  to  the  hostility  of  the 
Seminole  Indians,  who  still  occupy  nearly  all  of  the  peninsula. 

The  frontier  line  in  1840  has  a  length  of  3,300  miles.  This  shrink- 
ing in  its  length  is  due  to  its  rectification  on  the  northwest  and  south- 
west, owing  to  the  filling  out  of  the  entire  interior.  It  incloses  an  area 
of  900,658  square  miles,  all  lying  between  latitude  29°  and  46°  30' 
north,  and  longitude  67°  and  95°  30'  west.  The  vacant  tracts  have, 
as  noted  above,  decreased,  although  they  are  still  quite  considerable 
in  Missouri  and  Arkansas.  The  total  area  of  the  vacant  tracts  is 
95,516  square  miles.  The  settled  area  outside  the  frontier  line  is 
notably  small,  and  amounts,  in  the  aggregate,  to  only  2,150  miles, 
making  the  entire  settled  area  807,292  square  miles  in  1840.  The 
aggregate  population  being  17,069,453,  the  average  density  is  21.1  to 
the  square  mile. 

1850 

Between  1840  and  1850  the  limits  of  our  country  have  been  further 
extended  by  the  annexation  of  the  state  of  Texas  and  of  territory 
acquired  from  Mexico  by  the  treaty  of  Guadalupe  Hidalgo.  The  states 
of  Iowa,  Wisconsin,  and  Florida  have  been  admitted  to  the  Union,  and 


THE  WESTWARD  MOVEMENT  373 

the  territories  of  Minnesota,  Oregon,  and  New  Mexico  have  been 
created.  An  examination  of  the  maps  shows  that  the  frontier  line 
has  changed  very  little  during  this  decade.  At  the  western  border  of 
Arkansas  the  extension  of  settlement  is  peremptorily  limited  by  the 
boundary  of  the  Indian  territory ;  but,  curiously  enough  also,  the  west- 
ern boundary  of  Missouri  puts  almost  a  complete  stop  to  all  settlement, 
notwithstanding  that  some  of  the  most  densely  populated  portions 
of  the  state  lie  directly  on  that  boundary. 

In  Iowa  settlements  have  made  some  advance,  moving  up  the 
Missouri,  the  Des  Moines,  and  other  rivers.  The  settlements  in  Min- 
nesota at  and  about  St.  Paul,  which  appeared  in  1840,  are  greatly 
extended  up  and  down  the  Mississippi  river,  while  other  scattering 
bodies  of  population  appear  in  northern  Wisconsin.  In  the  southern 
part  of  the  state  settlement  has  made  considerable  advance,  especially 
in  a  northeastern  direction,  toward  Green  bay.  In  Michigan  the 
change  has  been  very  slight. 

Turning  to  the  southwest  we  find  Texas,  for  the  first  time  on  the 
map  of  the  United  States,  with  a  considerable  extent  of  settlement; 
in  general,  however,  it  is  very  sparse,  most  of  it  lying  in  the  eastern 
part  of  the  state,  and  being  largely  dependent  upon  the  grazing  industry. 

The  included  unsettled  areas  now  are  very  small  and  few  in  num- 
ber. There  still  remains  one  in  southern  Missouri,  in  the  hilly  country ; 
a  small  one  in  northeastern  Arkansas,  in  the  swampy  and  alluvial- 
region;  and  one  in  the  similar  country  in  the  Yazoo  bottom-lands. 
Along  the  coast  of  Florida  are  found  two  patches  of  considerable  size, 
which  are  confined  to  the  swampy  coast  regions.  The  same  is  the 
case  along  the  coast  of  Louisiana.  The  sparse  settlements  of  Texas 
are  also  interspersed  with  several  patches  devoid  of  settlement.  In 
southern  Georgia  the  large  vacant  space  heretofore  noted,  extending 
also  into  northern  Florida,  has  entirely  disappeared,  and  the  Florida 
settlements  have  already  reached  southward  to  a  considerable  dis- 
tance in  the  peninsula,  being  now  free  to  extend  without  fear  of  hostile 
Seminoles,  the  greater  part  of  whom  have  been  removed  to  the  Indian 
territory. 

The  frontier  line,  which  now  extends  around  a  considerable  part  of 
Texas  and  issues  on  the  Gulf  coast  at  the  mouth  of  the  Nueces  river, 
is  4,500  miles  in  length.  The  aggregate  area  included  by  it  is  1,005,213 
square  miles,  from  which  deduction  is  to  be  made  for  vacant  spaces, 
in  all,  64,339  square  miles.  The  isolated  settlements  lying  outside 
this  body  in  the  western  part  of  the  country  amount  to  4,775  square 
miles. 


374  READINGS  IN  ECONOMIC  HISTORY 

But  it  is  no  longer  by  a  line  drawn  around  from  the  St.  Croix  river 
to  the  Gulf  of  Mexico  that  we  embrace  all  the  population  of  the  United 
States,  excepting  only  a  few  outlying  posts  and  small  settlements. 
We  may  now,  from  the  Pacific,  run  a  line  around  80,000  miners  and 
adventurers,  the  pioneers  of  more  than  one  state  of  the  Union  soon  to 
arise  on  that  coast.  This  body  of  settlement  has  been  formed,  in  the 
main,  since  the  acquisition  of  the  territory  by  the  United  States,  and, 
it  might  even  be  said,  within  the  last  year  (i849-'5o),  dating  from  the 
discovery  of  gold  in  California.  These  settlements  may  be  computed 
rudely  at  33,600  square  miles,  making  a  total  area  of  settlement  at 
that  date  of  979,249  square  miles,  the  aggregate  population  being 
23,191,876,  and  the  average  density  of  settlement  23.7  to  the  square 
mile. 

1860 

Between  1850  and  1860  the  territorial  changes  noted  are  as  follows: 
The  strip  of  Arizona  and  New  Mexico  south  of  the  Gila  river  has  been 
acquired  from  Mexico  by  the  Gadsden  purchase  (1853);  Minnesota 
territory  has  been  admitted  as  a  state;  Kansas  and  Nebraska  terri- 
tories have  been  formed  from  parts  of  Missouri  territory;  California 
and  Oregon  have  been  admitted  as  states,  while,  in  the  unsettled  parts 
of  the  Cordilleran  region,  two  new  territories  (Utah  and  Washington) 
have  been  formed  out  of  parts  of  that  terra  incognita  which  we  bought 
from  France  as  a  part  of  Louisiana,  and  of  that  which  we  acquired  by 
conquest  from  Mexico.  At  this  date  we  note  the  first  extension  of 
settlements  beyond  the  line  of  the  Missouri  river.  The  march  of 
settlement  up  the  slope  of  the  great  plains  has  begun.  In  Kansas 
and  Nebraska  population  is  now  found  beyond  the  97th  meridian. 
Texas  has  filled  up  even  more  rapidly,  its  extreme  settlements  reach- 
ing to  the  looth  meridian,  while  the  gaps  noted  at  the  date  of  the  last 
census  have  all  been  filled  by  population.  The  incipient  settlements 
about  St.  Paul,  in  Minnesota,  have  grown  like  Jonah's  gourd,  spread- 
ing in  all  directions,  and  forming  a  broad  band  of  union  with  the  main 
body  of  settlement  down  the  line  of  the  Mississippi  river.  In  Iowa 
settlements  have  crept  steadily  northwestward  along  the  course  of  the 
drainage,  until  the  state  is  nearly  covered.  Following  up  the  Missouri, 
population  has  reached  out  into  the  southeastern  corner  of  the  present 
area  of  Dakota.  In  Wisconsin  the  settlements  have  moved  at  least 
one  degree  farther  north,  while  in  the  lower  peninsula  of  Michigan 
they  have  spread  up  the  lake  shores,  nearly  encircling  it  on  the  side 
next  lake  Michigan.  On  the  upper  peninsula  the  little  settlements 
which  appeared  in  1850  in  the  copper  region  on  Keeweenaw  point 


THE  WESTWARD  MOVEMENT  375 

have  extended  and  increased  greatly  in  density  as  that  mining  interest 
has  developed  in  value.  In  northern  New  York  there  is,  apparently, 
no  change  in  the  unsettled  area.  In  northern  Maine  we  note,  for  the 
first  time,  a  decided  movement  toward  the  settlement  of  its  unoccupied 
territory,  in  the  extension  of  the  settlements  on  its  eastern  and  north- 
ern border  up  the  St.  John  river.  The  unsettled  regions  in  southern 
Missouri,  northeastern  Arkansas,  and  northwestern  Mississippi  have 
become  sparsely  covered  by  population.  Along  the  Gulf  coast  there 
is  little  or  no  change.  There  is  to  be  noted  a  slight  extension  of  settle- 
ment southward  in  the  peninsula  of  Florida. 

The  frontier  line  now  measures  5,300  miles,  and  embraces  1,126,518 
square  miles,  lying  between  latitude  28°  30'  and  47°  30'  north,  and 
between  longitude  67°  and  99°  30'  west.  From  this  deduction  should 
be  made  on  account  of  vacant  spaces,  amounting  to  39,139  square 
miles,  found  mainly  in  New  York  and  along  the  Gulf  coast.  The  out- 
lying settlements  beyond  the  looth  meridian  are  now  numerous. 
They  include,  among  others,  a  strip  extending  far  up  the  Rio  Grande 
in  Texas,  embracing  7,475  square  miles  (a  region  given  over  to  the 
raising  of  sheep),  while  the  Pacific  settlements,  now  comprising  one 
sovereign  state,  are  nearly  three  times  as  extensive  as  at  1850,  embrac- 
ing 99,900  square  miles.  The  total  area  of  settlement  in  1860  is  thus 
1,194,754  square  miles;  the  aggregate  population  is  now  31,443,321, 
and  the  average  density  of  settlement  26.3  to  the  square  mile. 


CHAPTER  XII 

INLAND  COMMERCE  AND  INTERNAL  IMPROVEMENTS, 

1816-1860 

I.    STAGECOACH  TRAVEL 

A.     Traveling  by  Stagecoach  in  Virginia,  1835 1 

Because  of  the  generally  bad  state  of  the  roads  and  of  the  incompetence  of 
drivers,  traveling  by  stagecoach  was  slow  and  tedious.  During  the  rainy  seasons 
of  the  year,  the  passengers  were  subjected  to  endless  inconveniences,  and  often 
times  their  lives  were  endangered.  A  journey  of  a  hundred  miles  consumed  more 
time  and  was  as  expensive  as  a  journey  by  railroad  ten  times  that  distance  at  the 
present  time.  No  one  part  of  the  country  had  any  distinct  advantages  in  road 
improvement.  The  roads  were  likely  to  be  cut  in  deep  ruts,  washed  out,  and  even 
impassable.  Travelers,  especially  those  from  England,  complained  about  the  con- 
ditions of  stagecoach  travel.  In  their  many  books  of  travel  they  compared  con- 
ditions in  the  United  States  with  those  in  England,  to  the  decided  disadvantage  of 
the  former. 

One  of  the  best  known  of  these  travelers,  Charles  Augustus  Murray,  has  given 
interesting  accounts  of  his  experiences  with  stagecoach  drivers;  no  doubt  such 
experiences  were  common  everyday  occurrences  in  the  lives  of  the  American  travel- 
ing public. 

On  leaving  Fredericsburgh  for  Richmond,  by  the  stage,  I  was 
warned  of  the  bad  state  of  the  roads;  but,  encouraged  by  what  I 
had  already  gone  through  in  safety,  I  smiled  at  such  perils;  and  con- 
fiding in  the  stout  setting  of  my  bones,  resigned  myself  without  fear 
to  a  vehicle,  in  which  I  formed  the  ninth  passenger,  and  which  promised 
to  reach  Richmond  in  twelve  hours,  the  distance  being  about  sixty  or 
seventy  miles.  As  we  began  the  journey  at  two  P.  M.,  we  hoped  to 
conclude  it  about  the  same  hour  in  the  morning. 

After  jolting  some  eight  miles  in  two  hours,  I  began  to  doubt  the 
calculation  of  speed;  that  of  safety  was  placed  agreeably  beyond  all 
doubt,  by  meeting  the  stage  from  Richmond,  containing  several  pas- 
sengers with  their  heads  bandaged  with  blood-stained  napkins.  We 


1  Travels  in  North  America.    By  The  Hon.  Charles  Augustus  Murray  (London, 
1839),  I, 


INLAND   COMMERCE  AND   IMPROVEMENTS  377 

found  on  inquiry,  that  they  had  been  upset  only  once,  and  had  received 
these  cuts  and  contusions.  I  congratulated  myself  on  being  in  this 
"safety"  line,  as  the  opposition,  or  mail-stage,  had  upset  twice  that 
same  night,  thereby  proving  that  our  chance  of  escape  with  life  and 
unbroken  limbs  was  two  to  one  greater  than  that  of  our  mail-competi- 
tors. 

It  is  needless  to  dwell  on  the  horrors  of  that  night :  it  was  found  im- 
possible to  drag  the  load  of  passengers  and  luggage  through  the  mud; 
we  were  consequently  divided  into  two  stages;  and  I  heard  the  negro 
who  drove  the  last,  which  contained  my  valuable  person,  say,  as  he 
mounted  the  box  at  nightfall,  "I  hope  we  shan't  upsit,  as  I  ha'nt  driv' 
this  road  this  two  month."  Under  his  experimental  guidance  we 
certainly  did  receive  such  a  jolting  as  I  had  never  supposed  a  carriage 
capable  of  enduring;  and  the  courage  with  which  he  led  it  on  to  charge 
stumps  and  trees,  and  to  plunge  into  mud-holes,  in  the  dark,  excited 
my  admiration.  It  called  forth,  however,  other  feelings  from  one  of 
my  companions,  who  vented  his  alarm  and  anger  in  a  variety  of  expres- 
sions, which  would  have  formed  a  valuable  supplement  to  any  dic- 
tionary of  malediction  or  blasphemy.  We  arrived  only  four  or  five 
hours  after  the  time  appointed,  and  I  felt  nearly  as  much  relieved  as 
when  my  foot  first  touched  the  shore  of  Fayal.  The  description  here 
given  of  this  road  is  not  overdrawn.  I  will  defy  pen,  pencil,  or  malice 
to  do  it;  and  it  must  be  remembered,  that  it  is  the  great  high  road 
(1835)  from  the  Capital  of  Virginia  to  the  seat  of  the  Federal  Govern- 
ment. 

B.     Plight  of  a  Traveler  in  the  South,  1835 x 

Another  English  traveler,  Harriet  Martineau,  the  "  deaf  lady,"  describes  the 
hardships  of  stage  travel  as  follows: 

I  found,  in  travelling  through  the  Carolinas  and  Georgia,  that  the 
drivers  consider  themselves  entitled  to  get  on  by  any  means  they  can 
devise:  that  nobody  helps  and  nobody  hinders  them.  It  was  con- 
stantly happening  that  the  stage  came  to  a  stop  on  the  brink  of  a  wide 
and  a  deep  puddle,  extending  all  across  the  road.  The  driver  helped 
himself,  without  scruple,  to  as  many  rails  of  the  nearest  fence  as  might 
serve  to  fill  up  the  bottom  of  the  hole,  or  break  our  descent  into  it. 
On  inquiry,  I  found  it  was  not  probable  that  either  road  or  fence  would 
be  mended  till  both  had  gone  to  absolute  destruction. 

The  traffic  on  these  roads  is  so  small,  that  the  stranger  feels  himself 
almost  lost  in  the  wilderness.  In  the  course  of  several  days'  journey, 

1  Society  in  America.     By  Harriet  Martineau  (London,  1837),  II,  172-6. 


378  READINGS  IN  ECONOMIC  HISTORY 

we  saw,  (with  the  exception  of  the  wagons  of  a  few  encampments,) 
only  one  vehicle  besides  our  own.  It  was  a  stage  returning  from 
Charleston.  Our  meeting  in  the  forest  was  like  the  meeting  of  ships  at 
sea.  We  asked  the  passengers  from  the  south  for  news  from  Charles- 
ton and  Europe;  and  they  questioned  us  about  the  state  of  politics 
at  Washington.  The  eager  vociferation  of  drivers  and  passengers  was 
such  as  is  very  unusual,  out  of  exile.  We  were  desired  to  give  up  all 
thoughts  of  going  by  the  eastern  road  to  Charleston.  The  road  might 
be  called  impassable;  and  there  was  nothing  to  eat  by  the  way.  So 
we  described  a  circuit,  by  Camden  and  Columbia. 

An  account  of  an  actual  day's  journey  will  give  the  best  idea  of 
what  travelling  is  in  such  places.  We  had  travelled  from  Richmond, 
Virginia,  the  day  before,  (March  2nd,  1835,)  and  had  not  had  any 
rest,  when,  at  midnight,  we  came  to  a  river  which  had  no  bridge. 
The  "scow"  had  gone  over  with  another  stage,  and  we  stood  under 
the  stars  for  a  long  time;  hardly  less  than  an  hour.  The  scow  was 
only  just  large  enough  to  hold  the  coach  and  ourselves;  so  that  it  was 
thought  safest  for  the  passengers  to  alight,  and  go  on  board  on  foot. 
In  this  process,  I  found  myself  over  the  ankles  in  mud.  A  few  minutes 
after  we  had  driven  on  again,  on  the  opposite  side  of  the  river,  we  had 
to  get  out  to  change  coaches;  after  which  we  proceeded,  without  acci- 
dent, though  very  slowly,  till  daylight.  Then  the  stage  sank  down 
into  a  deep 'rut,  and  the  horses  struggled  in  vain.  We  were  informed 
that  we  were  "mired,"  and  must  all  get  out.  I  stood  for  sometime 
to  witness  what  is  very  pretty  for  once;  but  wearisome  when  it  occurs 
ten  times  a  day.  The  driver  carries  an  axe,  as  a  part  of  the  stage 
apparatus.  He  cuts  down  a  young  tree,  for  a  lever,  which  is  intro- 
duced under  the  nave  of  the  sunken  wheel;  a  log  serving  for  a  block. 
The  gentleman  passengers  all  help;  shouting  to  the  horses,  which  tug 
and  scramble  as  vigorously  as  the  gentlemen.  We  ladies  sometimes 
gave  our  humble  assistance  by  blowing  the  driver's  horn.  Some- 
times a  cluster  of  negroes  would  assemble  from  a  neighbouring  planta- 
tion; and  in  extreme  cases,  they  would  bring  a  horse,  to  add  to  our 
team.  The  rescue  from  the  rut  was  effected  in  any  time  from  a  quarter 
of  an  hour  to  two  hours.  .  .  . 

.  .  .  Half  a  mile  before  reaching  the  place  where  we  were  to  have 
tea,  the  thorough-brace  broke,  and  we  had  to  walk  through  a  snow 
shower  to  the  inn.  We  had  not  proceeded  above  a  quarter  of  a  mile 
from  this  place  when  the  traces  broke.  After  this,  we  were  allowed 
to  sit  still  in  the  carriage  till  near  seven  in  the  morning,  when  we  were 
approaching  Raleigh,  North  Carolina.  We  then  saw  a  carriage 


INLAND   COMMERCE   AND   IMPROVEMENTS  379 

"mired"  and  deserted  by  driver  and  horses,  but  tenanted  by  some 
travellers  who  had  been  waiting  there  since  eight  the  evening  before. 
While  we  were  pitying  their  fate,  our  vehicle  once  more  sank  into  a 
rut.  It  was,  however,  extricated  in  a  short  time,  and  we  reached 
Raleigh  in  safety. 

II.    EARLY  NAVIGATION  OF  THE  WESTERN  RIVERS 

Primitive  Methods,  1832  l 

The  Mississippi  River  and  its  tributaries  were  important  factors  in  the  economic 
development  of  the  United  States.  Down  these  streams  the  surplus  products  of 
the  western  farms  were  sent  to  New  Orleans,  and  from  that  point  they  were  shipped 
to  the  northern  states  or  to  Europe.  Before  the  introduction  of  the  steamboat  on 
the  Ohio  River  in  the  year  1811,  some  form  of  raft  or  flatboat  was  extensively 
used  by  the  settlers  and  traders  for  transporting  goods  on  the  river,  and  even 
after  the  steamboat  had  come  into  general  use  as  a  carrier  of  freight  upstream 
these  rude  crafts  were  employed  extensively  in  the  down-river  trade.  Mr.  Flint, 
whose  long  residence  in  the  Mississippi  Valley  made  him  an  authority  on  early 
river  traffic,  describes  it  as  follows : 

The  barge  is  of  the  size  of  an  Atlantic  schooner,  with  a  raised  and 
outlandish  looking  deck.  It  had  sails,  masts  and  rigging  not  unlike 
a  sea  vessel,  and  carried  from  fifty  to  an  hundred  tons.  It  required 
twenty -five  or  thirty  hands  to  work  it  up  stream.  On  the  lower  courses 
of  the  Mississippi,  when  the  wind  did  not  serve,  and  the  waters  were 
high,  it  was  worked  up  stream  by  the  operation  that  is  called  '  warp- 
ing,' —  a  most  laborious,  slow  and  difficult  mode  of  ascent,  and  in 
which  six  or  eight  miles  a  day  was  good  progress.  It  consisted  in 
having  two  yawls,  the  one  in  advance  of  the  other,  carrying  out  a 
warp  of  some  hundred  yards  in  length,  making  it  fast  to  a  tree,  and  then 
drawing  the  barge  up  to  that  tree  by  the  warp.  When  that  warp  was 
coiled,  the  yawl  in  advance  had  another  laid,  and  so  on  alternately. 
From  ninety  to  an  hundred  days  was  a  tolerable  passage  from  New 
Orleans  to  Cincinnati.  In  this  way  the  intercourse  between  Pitts- 
burgh, Cincinnati,  Louisville,  Nashville,  and  St.  Louis,  for  the  more 
important  purposes  of  commerce,  was  kept  up  with  New  Orleans. 
One  need  only  read  the  journal  of  a  barge  on  such  an  ascent,  to  com- 
prehend the  full  value  of  the  invention  of  steam  boats.  They  are  now 
gone  into  disuse,  and  we  do  not  remember  to  have  seen  a  barge  for 
some  years,  except  on  the  waters  above  the  mouth  of  the  Ohio. 

1  The  History  and  Geography  of  the  Mississippi  Valley.     By  Timothy  Flint 
(Cincinnati,  1832),  I,  151-3. 


380  READINGS. IN  ECONOMIC  HISTORY 

The  keel  boat  is  of  a  long,  slender  and  elegant  form,  and  generally 
carries  from  fifteen  to  thirty  tons.  Its  advantage  is  in  its  small  draft 
of  water,  and  the  lightness  of  its  construction.  It  is  still  used  on  the 
Ohio  and  upper  Mississippi  in  low  stages  of  water,  and  on  all  the 
beatable  streams  where  steam  boats  do  not  yet  run.  Its  propelling 
power  is  by  oars,  sails,  setting  poles,  the  cordelle,  and  when  the  waters 
are  high,  and  the  boats  run  on  the  margin  of  the  bushes,  '  bush- whack- 
ing,' or  pulling  up  by  the  bushes.  Before  the  invention  of  steam 
boats,  these  boats  were  used  in  the  proportion  of  six  to  one  at  the 
present  time. 

The  ferry  flat  is  a  scow-boat,  and  when  used  as  a  boat  of  descent 
for  families,  has  a  roof,  or  covering.  These  are  sometimes,  in  the 
vernacular  phrase,  called  'sleds.'  The  AUeghany  or  Mackinaw  skiff, 
is  a  covered  skiff,  carrying  from  six  to  ten  tons;  and  is  much  used  on 
the  AUeghany,  the  Illinois,  and  the  rivers  of  the  upper  Mississippi 
and  Missouri.  Periogues  are  sometimes  hollowed  from  one  very  large 
tree,  or  from  the  trunks  of  two  trees  united,  and  fitted  with  a  plank 
rim.  They  carry  from  one  to  three  tons.  There  are  common  skiffs, 
canoes  and  'dug-outs,'  for  the  convenience  of  crossing  the  rivers;  and 
a  select  company  of  a  few  travellers  often  descend  in  them  to  New 
Orleans.  Hunters  and  Indians,  and  sometimes  passengers,  make  long 
journeys  of  ascent  of  the  rivers  in  them.  Besides  these,  there  are 
anomalous  water  crafts,  that  can  hardly  be  reduced  to  any  class,  used 
as  boats  of  passage  or  descent.  We  have  seen  flat  boats,  worked  by 
a  wheel,  which  was  driven  by  the  cattle,  that  were  conveying  to  the 
New  Orleans  market.  There  are  horse  boats  of  various  constructions, 
used  for  the  most  part  as  ferry  boats;  but  sometimes  as  boats  of 
ascent.  Two  keel  boats  are  connected  by  a  platform.  A  pen  holds 
the  horses,  which  by  circular  movement  propel  wheels.  We  saw 
United  States'  troops  ascending  the  Missouri  by  boats,  propelled  by 
tread  wheels;  and  we  have,  more  than  once,  seen  a  boat  moved  rapidly 
up  stream  by  wheels,  after  the  steam  boat  construction,  propelled  by 
a  man  turning  a  crank. 

But  the  boats  of  passage  and  conveyance,  that  remain  after  the 
invention  of  steam  boats,  and  are  still  important  to  those  objects,  are 
keel  boats  and  flats.  The  flat  boats  are  called,  in  the  vernacular 
phrase, '  Kentucky  flats,'  or  '  broad  horns. '  They  are  simply  an  oblong 
ark,  with  a  roof  slightly  curved  from  the  center  to  shed  rain.  They 
are  generally  about  fifteen  feet  wide,  and  from  fifty  to  eighty,  and 
sometimes  an  hundred  feet  in  length.  The  timbers  of  the  bottom  are 
massive  beams;  and  they  are  intended  to  be  of  great  strength;  and 


INLAND   COMMERCE  AND   IMPROVEMENTS  381 

to  carry  a  burden  of  from  two  to  four  hundred  barrels.  Great  num- 
bers of  cattle,  hogs  and  horses  are  conveyed  to  market  in  them.  We 
have  seen  family  boats  of  this  description,  fitted  up  for  the  descent  of 
families  to  the  lower  country,  with  a  stove,  comfortable  apartments, 
beds,  and  arrangements  for  commodious  habitancy.  We  see  in  them 
ladies,  servants,  cattle,  horses,  sheep,  dogs  and  poultry,  all  floating 
on  the  same  bottom;  and  on  the  roof  the  looms,  ploughs,  spinning 
wheels  and  domestic  implements  of  the  family. 

Much  of  the  produce  of  the  upper  country,  even  after  the  inven- 
tion of  steam  boats,  continues  to  descend  to  New  Orleans  in  Kentucky 
flats.  They  generally  carry  three  hands;  and  perhaps  a  supernum- 
erary fourth  hand,  a  kind  of  supercargo.  This  boat,  in  the  form  of  a 
parallelogram,  lying  flat  and  dead  in  the  water,  and  with  square  tim- 
bers below  its  bottom  planks,  and  carrying  such  a  great  weight,  runs 
on  a  sandbar  with  a  strong  headway,  and  plough^  its  timbers  into 
the  sand;  and  it  is,  of  course,  a  work  of  extreme  labor  to  get  the  boat 
afloat  again.  Its  form  and  its  wreight  render  it  difficult  to  give  it  a 
direction  with  any  power  of  oars.  Hence,  in  the  shallow  waters,  it 
often  gets  aground.  When  it  has  at  length  cleared  the  shallow  waters, 
and  gained  the  heavy  current  of  the  Mississippi,  the  landing  such  an 
unwieldy  water  craft,  in  such  a  current,  is  a  matter  of  no  little  diffi- 
culty and  danger. 

III.    EFFECTS  OF  THE  STEAMBOAT  ON  INLAND  COMMERCE 

Changes  in  Rates  and  Speed,  1816-1856  l 

The  introduction  of  the  steamboat  on  the  western  rivers  stimulated  freight  and 
passenger  traffic  by  reducing  fares  and  charges  of  transportation  and  by  furnishing 
additional  safety  and  comfort.  An  authority  on  this  subject  described  the  effects 
as  follows: 

The  extent  to  which  steam  navigation  has  improved  our 
country,  is  scarcely  realized  even  by  those  who  have  travelled  over  it 
the  most.  The  Hudson  river,  from  the  first  voyage  of  the  North 
River,  Fulton's  steamboat,  up  to  the  present  time,  has  remained  at 
the  head  of  all  competitors  in  river  navigation.  We  had  then  two 
trips  per  week,  each  consuming  from  thirty  to  thirty-six  hours;  we 
have  now  four  passenger  boats  per  day  over  the  entire  route,  and  many 
making  short  trips,  besides  those  used  for  towing  barges  and  canal 
boats;  the  passenger  boats  making  the  entire  trip  of  one  hundred  and 

1  Eighty  Years'  Progress.     By  Thomas  P.  Kettell  (Hartford,  1869),  234-40. 


382  READINGS  IN  ECONOMIC  HISTORY 

fifty  miles  in  from  ten  to  twelve  hours.  The  increased  prosperity  of 
New  York,  growing  out  of  this  immense  traffic  by  steamboats  alone, 
is  very  great,  but  even  this  is  small  when  compared  with  the  naviga- 
tion of  the  Mississippi  and  the  other  western  rivers.  In  1856  there 
were  over  one  thousand  steamboats  and  propellers  on  the  western 
waters,  costing  not  less  than  nineteen  millions  of  dollars,  and  of  a 
carrying  capacity  of  four  hundred  and  forty-three  thousand  tons.  Of 
these  boats,  the  smallest  was  the  Major  Darien,  of  ten  tons,  built  at 
Freedom  in  1852;  and  the  largest  was  the  Eclipse,  of  one  thousand 
one  hundred  and  seventeen  tons,  built  at  New  Albany  the  same  year. 
Thus,  on  the  western  waters,  in  the  short  space  of  forty-five  years, 
steam  created  a  business  that  absorbed  nineteen  millions  of  dollars  in 
steamboats  alone. 

Up  to  the  year  1811,  the  only  regular  method  of  transportation 
had  been  by  means  of  flat  boats,  wrhich  consumed  three  or  four  months 
in  the  passage  from  New  Orleans  to  Pittsburg.  The  price  of  passage 
was  then  one  hundred  and  sixty  dollars;  freight,  six  dollars  and 
seventy -five  cents  per  hundred  pounds.  The  introduction  of  steam  has 
reduced  the  price  of  passage  between  these  two  cities  to  thirty  dollars, 
and  merchandise  is  carried  the  wrhole  distance  for  a  price  which  may 
be  regarded  as  merely  nominal.  Besides  this  great  saving  of  time  and 
money  effected  by  steam  navigation  on  these  waters,  the  comparative 
safety  of  steam  conveyance  is  an  item  which  especially  deserves  our 
notice.  Before  the  steam  dispensation  began,  travellers  and  mer- 
chants were  obliged  to  trust  their  lives  and  property  to  the  bargemen, 
many  of  whom  were  suspected,  with  very  good  reason,  to  be  in  con- 
federacy with  the  land  robbers  who  infested  the  shores  of  the  Ohio, 
and  the  pirates  who  resorted  to  the  islands  of  the  Mississippi.  These 
particulars  being  understood,  we  are  prepared  to  estimate  the  value 
and  importance  of  the  services  which  the  steam  engine  has  rendered 
to  the  commerce  and  prosperity  of  the  western  states. 

In  1811,  Messrs.  Fulton  and  Livingston,  having  established  a 
ship-yard  at  Pittsburg  for  the  purpose  of  introducing  steam  navigation 
on  the  western  waters,  built  an  experimental  boat  for  this  service  — 
and  this  was  the  first  steamboat  that  ever  floated  on  the  western  rivers. 
It  was  furnished  with  a  stern  wheel  and  two  masts  —  for  Mr.  Fulton 
believed,  at  that  time,  that  the  occasional  use  of  sails  would  be  in- 
dispensable. This  first  western  steamboat  was  called  the  Orleans; 
her  capacity  was  one  hundred  tons.  In  the  winter  of  1812,  she 
made  her  first  trip  from  Pittsburg  to  New  Orleans  in  fourteen 
days. 


INLAND   COMMERCE  AND  IMPROVEMENTS  383 

The  first  appearance  of  this  vessel  on  the  Ohio  river  produced,  as 
the  reader  may  suppose,  not  a  little  excitement  and  admiration.  A 
steamboat  at  that  day  was,  to  common  observers,  as  great  a  wonder 
as  a  navigable  balloon  would  be  at  the  present.  The  banks  of  the 
river,  in  some  places,  were  thronged  with  spectators,  gazing  in  speech- 
less astonishment  at  the  puffing  and  smoking  phenomenon.  The 
average  speed  of  this  boat  was  only  about  three  miles  per  hour.  Before 
her  ability  to  move  through  the  water  without  the  assistance  of  sails 
or  oars  had  been  fully  exemplified,  comparatively  few  persons  believed 
that  she  could  possibly  be  made  to  answer  any  purpose  of  real  utility. 
In  fact,  she  had  made  several  voyages  before  the  general  prejudice 
began  to  subside,  and  for  some  months,  many  of  the  river  merchants 
preferred  the  old  mode  of  transportation,  with  all  its  risks,  delays, 
and  extra  expense,  rather  than  make  use  of  such  a  contrivance  as  a 
steamboat,  which,  to  their  apprehensions,  appeared  too  marvellous 
and  miraculous  for  the  business  of  every-day  life.  How  slow  are  the 
masses  of  mankind  to  adopt  improvements,  even  when  they  appear 
to  be  most  obvious  and  unquestionable! 

The  second  steamboat  of  the  west,  was  a  diminutive  vessel  called 
the  Comet.  She  was  rated  at  twenty-five  tons.  Daniel  D.  Smith 
was  the  owner,  and  D.  French  the  builder  of  this  boat.  Her  machin- 
ery was  on  a  plan  for  which  French  had  obtained  a  patent  in  1809. 
She  went  to  Louisville  in  the  summer  of  1813,  and  descended  to  New 
Orleans  in  the  spring  of  1814.  She  afterward  made  two  voyages  to 
Natchez,  and  was  then  sold,  taken  to  pieces,  and  the  engine  was  put 
up  in  a  cotton  factory.  The  Vesuvius  was  the  next;  she  was  built 
by  Mr.  Fulton,  at  Pittsburg,  for  a  company,  the  several  members  of 
which  resided  at  New  York,  Philadelphia,  and  New  Orleans.  She 
sailed  under  the  command  of  Captain  Frank  Ogden,  for  New  Orleans, 
in  the  spring  of  1814.  From  New  Orleans,  she  started  for  Louisville, 
in  July  of  the  same  year,  but  was  grounded  on  a  sand-bar,  seven  hun- 
dred miles  up  the  Mississippi,  where  she  remained  until  the  3d  of 
December  following,  when,  being  floated  off  by  the  tide,  she  returned 
to  New  Orleans.  In  1815-16,  she  made  regular  trips  for  several 
months,  from  New  Orleans  to  Natchez,  under  the  command  of  Captain 
Clement.  This  gentleman  was  soon  after  succeeded  by  Captain 
John  D.  Hart,  and  while  approaching  New  Orleans,  with  a  valuable 
cargo  on  board,  she  took  fire  and  burned  to  the  water's  edge.  After 
being  submerged  for  several  months,  her  hulk  was  raised  and  re- 
fitted. She  was  afterward  in  the  Louisville  trade,  and  was  condemned 
in  1819. 


384  READINGS  IN  ECONOMIC  HISTORY 

In  1818,  the  first  steamboat  was  built  for  Lake  Erie  and  the  upper 
lakes,  at  Black  Rock,  on  the  Niagara  river,  for  the  late  Dr.  I.  B. 
Stuart,  of  Albany,  N.  Y.,  by  Noah  Brown,  of  New  York  city.  She 
was  a  very  handsome  vessel,  360  tons  burden,  brig  rigged,  and  her 
engine,  on  the  plan  of  a  Boulton  and  Watt  square  engine,  was  made 
by  Robert  McQueen,  at  the  corner  of  Centre  and  Duane  streets, 
New  York  city;  her  cylinder  was  40  inches  diameter,  4  feet  stroke. 
The  materials  for  making  the  boiler  were  sent  from  New  York,  and 
the  boiler  was  made  at  Black  Rock  —  9  feet  diameter,  24  feet  long  — 
a  circular  boiler,  with  one  return  flue,  called  a  kidney  flue,  seldom, 
if  ever,  carrying  more  than  nine  inches  of  steam.  This  steamer  was 
called  the  Walk-in-the- Water,  after  a  celebrated  Indian  chief  in  Michi- 
gan. Her  engines  were  transported  from  New  York  to  Albany  by 
sloops,  and  from  Albany  to  Buffalo  by  large  six  and  eight  horse  Penn- 
sylvania teams.  Some  of  the  engine  was  delivered  in  fifteen  days 
time,  and  some  was  on  the  road  about  twenty-five  days. 

The  trip  from  Black  Rock,  or  Buffalo,  to  Detroit,  consumed  about 
forty  hours  in  good  weather,  using  thirty-six  to  forty  cords  of  wood  the 
trip.  The  price  of  passage  in  the  main  cabin  was  eighteen  dollars; 
from  Buffalo  to  Erie  (Penn.),  six  dollars;  to  Cleveland,  twelve  dollars; 
to  Sandusky  (Ohio),  fifteen  dollars;  to  Detroit,  eighteen  dollars. 
The  strength  of  the  rapids  at  the  head  of  the  Niagara  river,  between 
Buffalo  and  Black  Rock,  was  so  great,  that  besides  the  power  of  the 
engine,  the  steamer  had  to  have  the  aid  of  eight  yoke  of  oxen  to  get 
her  up  on  to  the  lake,  a  distance  of  about  two  and  one-half  miles. 
In  those  days,  the  passenger  and  freighting  business  was  so  small, 
that  one  dividend  only  was  made  to  the  owners  for  the  first  three 
years  from  the  earnings  of  the  steamer.  In  1821,  in  the  fall,  the 
steamer  was  totally  lost  in  a  terrible  gale.  On  the  coming  winter, 
a  new  steamer  was  built  at  Buffalo,  by  Mr.  Noah  Brown  of  New 
York  —  a  very  strong,  brig-rigged  vessel.  She  was  called  the 
Superior,  flush  decks  fore  and  aft;  the  first  steamer,  the  Walk-in-the- 
Water,  having  had  a  high  quarter  or  poop  deck. 

Compare  the  time  and  expense  of  travelling  in  those  days  with 
the  present  tune!  Mr.  Calhoun  (now  living),  the  engineer  of  the 
Walk-in- the- Water,  says,  "Every  two  years  I  used  to  return  to  New 
York  from  Buffalo  in  the  fall,  and  in  the  spring  from  New  York  to 
Buffalo.  I  have  been  three  and  four  days,  by  stage,  to  Albany; 
never  less  than  three  days,  and  sometimes  near  five  days;  the  stage 
fare  was  ten  dollars  to  Albany.  From  Albany  to  Buffalo,  I  have 
been  ten  days  in  getting  through;  the  shortest  time  was  eight  days; 


INLAND   COMMERCE  AND   IMPROVEMENTS  385 

the  stage  fare  through,  was  twenty-one  dollars.  How  is  it  now  ?  My 
usual  expense  in  going  to  Buffalo  from  Albany  was  thirty  dollars, 
including  meals  and  sleeping."  Such  facts  show  the  advantages  we 
have  obtained  from  the  use  of  steam  in  our  river  navigation. 

The  boats  that  then  plied  upon  the  Hudson  river,  would  not  be 
sufficient  to  carry  the  passengers'  baggage  of  the  present  day.  The 
first  boat  was  only  160  tons,  while  the  New  World,  built  in  r84y, 
was  of  1400.  The  latter  has  made  the  trip  from  New  York  to  Albany 
in  seven  hours  and  fifteen  minutes,  including  nine  landings  of  say  five 
minutes  each;  the  actual  running  time  being  six  hours  and  twrenty 
minutes;  distance,  one  hundred  and  fifty  miles  — performed  by  the 
North  River  in  thirty-six  hours. 

IV.  FEDERAL  AID  FOR  INTERNAL  IMPROVEMENTS 

A.   Internal  Improvements  and  the  National  Defense,  i8iQ  l 

In  the  early  part  of  the  century,  internal  improvements  were  considered  to  be 
closely  related  to  the  national  defense.  Hence  there  was  a  feeling  that  the  United 
States  government  ought  to  aid  in  the  building  of  such  improvements.  On  this 
subject,  John  C.  Calhoun,  Secretary  of  War  in  President  Monroe's  Cabinet,  ad- 
vised as  follows: 

It  remains,  in  relation  to  the  defence  of  the  Atlantic  frontier,  to 
consider  the  means  of  communication  between  it  and  the  western 
States,  which  require  the  aid  of  the  Government.  Most  of  the 
observations  made  relative  to  the  increased  strength  and  capacity 
of  the  country  to  bear  up  under  the  pressure  of  war,  from  the  coast- 
wise communication,  are  applicable  in  a  high  degree  at  present,  and 
are  daily  becoming  more  so,  to  those  with  the  western  States;  and 
should  a  war  for  conquest  ever  be  waged  against  us,  (an  event  not 
probable,  but  not  to  be  laid  entirely  out  of  view,)  the  roads  and  canals 
necessary  to  complete  the  communication  with  that  portion  of  our 
country  would  be  of  the  utmost  importance. 

The  interest  of  commerce  and  the  spirit  of  rivalry  between  the 
great  Atlantic  cities  will  do  much  to  perfect  the  means  of  intercourse 
with  the  west.  The  most  important  lines  of  communication  appear 
to  be  from  Albany  to  the  lakes;  from  Philadelphia,  Baltimore,  Wash- 
ington, and  Richmond,  to  the  Ohio  river;  and  from  Charleston  and 
Augusta  to  the  Tennessee  —  all  of  which  are  now  commanding  the 


1  Report  of  John  C.  Calhoun,  Secretary  of  War,  on  Internal  Improvements.     Ameri- 
can State  Papers  (Washington,  1834).    Series  Miscellaneous,  II,  535-6. 


386  READINGS  IN  ECONOMIC  HISTORY 

attention,  in  a  greater  or  less  degree,  of  the  sections  of  the  country 
immediately  interested.  But  in  such  great  undertakings,  so  interesting 
in  every  point  of  view  to  the  whole  Union,  and  which  may  ultimately 
become  necessary  to  its  defence,  the  expense  ought  not  to  fall  wholly 
on  the  portions  of  the  country  more  immediately  interested.  As 
the  Government  has  a  deep  stake  in  them,  and  as  the  system  of  de- 
fence will  not  be  perfect  without  their  completion,  it  ought  at  least 
to  bear  a  proportional  share  of  the  expense  of  their  construction. 

I  proceed  next  to  consider  the  roads  and  canals  connected  with  the 
defence  of  our  northern  frontier.  That  portion  of  it  which  extends 
to  the  east  of  Lake  Champlain  has  not  heretofore  been  the  scene  of 
extensive  military  operations,  and  I  am  not  sufficiently  acquainted 
with  the  nature  of  the  country  to  venture  an  opinion  whether  we  may 
hereafter  be  called  on  to  make  considerable  military  efforts  in  that 
quarter.  Without,  then,  designating  any  military  improvements  as 
connected  with  this  portion  of  our  northern  frontier,  I  would  suggest 
the  propriety,  should  Congress  approve  of  the  plan  for  a  military 
survey  of  the  country,  to  be  hereafter  proposed,  to  make  a  survey 
of  it  the  duty  of  the  engineers  who  may  be  designated  for  that 
purpose. 

For  the  defence  of  the  other  part  of  this  line  of  frontier,  the  most 
important  objects  are,  a  canal  or  water  communication  between 
Albany  and  Lake  George  and  Lake  Ontario,  and  between  Pitts- 
burg  and  Lake  Erie.  The  two  former  have  been  commenced  by  the 
State  of  New  York,  and  will,  when  completed,  connected  with  the 
great  inland  navigation  along  the  coast,  enable  the  Government,  at 
a  moderate  expense  and  in  a  short  time,  to  transport  munitions  of 
war,  and  to  concentrate  its  troops  from  any  portion  of  the  Atlantic 
States,  fresh  and  unexhausted  by  the  fatigue  of  marching,  on  the 
inland  frontier  of  the  State  of  New  York.  The  road,  commenced 
by  order  of  the  Executive,  from  Plattsburg  to  Sackett's  Harbor,  is 
essentially  connected  with  military  operations  on  this  portion  of  the 
northern  frontier.  A  water  communication  from  Pittsburg  to  Lake 
Erie  would  greatly  increase  our  power  on  the  upper  lakes.  The 
Allegany  river,  by  its  main  branch,  is  said  to  be  navigable  within  seven 
miles  of  Lake  Erie,  and  by  French  creek  within  sixteen  miles.  Pitts- 
burg  is  the  great  military  depot  of  the  country  to  the  west  of  the 
Alleganies,  and,  if  it  were  connected  by  a  canal  with  Lake  Erie,  would 
furnish  military  supplies  with  facility  to  the  upper  lakes,  as  well  as  to 
the  country  watered  by  the  Mississippi.  If  to  these  communications 
we  add  a  road  from  Detroit  to  Ohio,  which  has  already  been  com- 


INLAND   COMMERCE  AND   IMPROVEMENTS  387 

menced,  and  a  canal  from  the  Illinois  river  to  Lake  Michigan,  which 
the  growing  population  of  the  State  of  Illinois  renders  very  important, 
all  the  facilities  which  would  be  essential  "to  carry  on  military  opera- 
tions in  time  of  war,  and  the  transportation  of  the  munitions  of  war" 
for  the  defence  of  the  western  portion  of  our  northern  frontier,  would 
be  afforded. 

It  only  remains  to  consider  the  system  of  roads  and  canals  con- 
nected with  the  defence  of  our  southern  frontier,  or  that  on  the 
Gulf,  of  Mexico.  For  the  defence  of  this  portion  of  our  country, 
though  at  present  weak  of  itself,  nature  has  done  much.  The  bay  of 
Mobile,  and  the  entrance  into  the  Mississippi  through  all  its  channels, 
are  highly  capable  of  defence.  A  military  survey  has  been  made, 
and  the  necessary  fortifications  have  been  commenced,  and  will  be 
in  a  few  years  completed.  But  the  real  strength  of  this  frontier  is 
the  Mississippi,  which  is  no  less  the  cause  of  its  security  than  that 
of  its  commerce  and  wealth.  Its  rapid  stream,  aided  by  the  force 
of  steam,  can,  in  the  hour  of  danger,  concentrate  at  once  an  irresistible 
force.  Made  strong  by  this  noble  river,  little  remains  to  be  done 
by  roads  and  canals  for  the  defence  of  our  southern  frontier.  The 
continuation  of  the  road  along  the  Atlantic  coast  from  Milledgeville 
to  New  Orleans,  and  the  completion  of  the  road  which  has  already 
been  commenced  from  Tennessee  river  to  the  same  place,  with  the 
inland  navigation  through  the  canal  of  Carondelet,  Lake  Pontchar- 
train,  and  the  islands  along  the  coast,  to  Mobile,  covered  against  the 
operations  of  a  naval  force,  every  facility  required  for  the  transporta- 
tion of  munitions  of  war,  and  movements  and  concentration  of  troops, 
to  protect  this  distant  and  important  frontier,  would  be  afforded. 

Such  are  the  roads  and  canals  which  military  operations  in  time  of 
war,  the  transportation  of  the  munitions  of  war,  and  the  more  com- 
plete defence  of  the  United  States,  require. 

Many  of  the  roads  and  canals  which  have  been  suggested  are  no 
doubt  of  the  first  importance  to  the  commerce,  the  manufacture, 
the  agriculture,  and  political  prosperity  of  the  country,  but  are  not, 
for  that  reason,  less  useful  or  necessary  for  military  purposes.  It  is, 
in  fact,  one  of  the  great  advantages  of  our  country,  enjoying  so  many 
others,  that,  whether  we  regard  its  internal  improvements  in  relation 
to  military,  civil,  or  political  purposes,  very  nearly  the  same  system, 
in  all  its  parts,  is  required.  The  road  or  canal  can  scarcely  be  desig- 
nated, which  is  highly  useful  for  military  operations,  which  is  not 
equally  required  for  the  industry  or  political  prosperity  of  the  com- 
munity. If  those  roads  or  canals  had  been  pointed  out  which  are 


388  READINGS  IN  ECONOMIC  HISTORY 

necessary  for  military  purposes  only,  the  list  would  have  been  small 
indeed.  I  have,  therefore,  presented  all,  without  regarding  the  fact 
that  they  might  be  employed  for  other  uses  which,  in  the  event  of 
war,  would  be  necessary  to  give  economy,  certainty,  and  success  to 
our  military  operations,  and  which,  if  they  had  been  completed  before 
the  late  war,  would,  by  their  saving  in  that  single  contest  in  men, 
money,  and  reputation,  have  more  than  indemnified  the  country 
for  the  expense  of  their  construction.  I  have  not  prepared  an  es- 
timate of  expenses,  nor  pointed  out  the  particular  routes  for  the 
roads  of  canals  recommended,  as  I  conceive  that  this  can  be  ascer- 
tained with  satisfaction  only  by  able  and  skilful  engineers,  after  a 
careful  survey  and  examination.  .  .  . 

B.    Veto  of  the  Maysville  Road  Bill,  1830  l 

By  1830  a  majority  of  the  people  opposed  granting  federal  aid  for  internal 
improvements.  President  Jackson's  veto  of  the  Maysville  Road  Bill,  which  reflected 
the  feeling  of  that  majority,  caused  the  states  to  take  up  the  work.  Jackson's 
objections  were  largely  on  constitutional  grounds,  but  he  also  argued  that  it 
was  economically  unsound  for  the  government  to  undertake  such  enterprises: 

GENTLEMEN:  I  have  maturely  considered  the  bill  proposing  to 
authorize  "a  subscription  of  stock  in  the  Maysville,  Washington, 
Paris,  and  Lexington  Turnpike  Road  Company,"  and  now  return 
the  same  to  the  House  of  Representatives,  in  which  it  originated, 
with  my  objections  to  its  passage.  .  .  . 

In  the  Administration  of  Mr.  Jefferson  we  have  two  examples  of 
the  exercise  of  the  right  of  appropriation,  which  in  the  considera- 
tions that  led  to  their  adoption  and  in  their  effects  upon  the  public 
mind  have  had  a  greater  agency  in  marking  the  character  of  the  power 
than  any  subsequent  events.  I  allude  to  the  payment  of  $15,0x20,000 
for  the  purchase  of  Louisiana  and  to  the  original  appropriation  for 
the  construction  of  the  Cumberland  road,  the  latter  act  deriving 
much  weight  from  the  acquiescence  and  approbation  of  three  of  the 
most  powerful  of  the  original  members  of  the  Confederacy,  expressed 
through  their  respective  legislatures.  Although  the  circumstances  of 
the  latter  case  may  be  such  as  to  deprive  so  much  of  it  as  relates  to 
the  actual  construction  of  the  road  of  the  force  of  an  obligatory 
exposition  of  the  Constitution,  it  must,  nevertheless,  be  admitted 
that  so  far  as  the  mere  appropriation  of  money  is  concerned  they 
present  the  principle  in  its  most  imposing  aspect.  No  less  than  twenty- 

1  Messages  and  Papers  of  the  Presidents.    Edited  by  James  D.  Richardson 
([Washington],  1895-1903),  II,  483,  485-6,  4Q2. 


INLAND   COMMERCE  AND   IMPROVEMENTS  389 

three  different  laws  have  been  passed,  through  all  the  forms  of  the 
Constitution,  appropriating  upward  of  $2,500,000  out  of  the  National 
Treasury  in  support  of  that  improvement,  with  the  approbation  of 
every  President  of  the  United  States,  including  my  predecessor,  since 
its  commencement. 

Independently  of  the  sanction  given  to  appropriations  for  the 
Cumberland  and  other  roads  and  objects  under  this  power,  the  Ad- 
ministration of  Mr.  Madison  was  characterized  by  an  act  which 
furnishes  the  strongest  evidence  of  his  opinion  of  its  extent.  A  bill 
was  passed  through  both  Houses  of  Congress  and  presented  for  his 
approval,  "setting  apart  and  pledging  certain  funds  for  constructing 
roads  and  canals  and  improving  the  navigation  of  water  courses,  in 
order  to  facilitate,  promote,  and  give  security  to  internal  commerce 
among  the  several  States  arid  to  render  more  easy  and  less  expensive 
the  means  and  provisions  for  the  common  defense."  Regarding  the 
bill  as  asserting  a  power  in  the  Federal  Government  to  construct 
roads  and  canals  within  the  limits  of  the  States  in  which  they  were 
made,  he  objected  to  its  passage  on  the  ground  of  its  unconstitu- 
tionally, declaring  that  the  assent  of  the  respective  States  in  the  mode 
provided  by  the  bill  could  not  confer  the  power  in  question;  that  the 
only  cases  in  which  the  consent  and  cession  of  particular  States  can 
extend  the  power  of  Congress  are  those  specified  and  provided  for 
in  the  Constitution,  and  superadding  to  these  avowals  his  opinion 
that  "a  restriction  of  the  power  'to  provide  for  the  common  defense 
and  general  welfare'  to  cases  which  are  to  be  provided  for  by  the 
expenditure  of  money  would  still  leave  within  the  legislative  power 
of  Congress  all  the  great  and  most  important  measures  of  Govern- 
ment, money  being  the  ordinary  and  necessary  means  of  carrying 
them  into  execution."  I  have  not  been  able  to  consider  these  declara- 
tions in  any  other  point  of  view  than  as  a  concession  that  the  right 
of  appropriation  is  not  limited  by  the  power  to  carry  into  effect  the 
measure  for  which  the  money  is  asked,  as  was  formerly  contended. 

The  views  of  Mr.  Monroe  upon  this  subject  were  not  left  to  infer- 
ence. During  his  Administration  a  bill  was  passed  through  both 
Houses  of  Congress  conferring  the  jurisdiction  and  prescribing  the 
mode  by  which  the  Federal  Government  should  exercise  it  in  the 
case  of  the  Cumberland  road.  He  returned  it  with  objections  to 
its  passage,  and  in  assigning  them  took  occasion  to  say  that  in  the 
early  stages  of  the  Government  he  had  inclined  to  the  construction 
that  it  had  no  right  to  expend  money  except  in  the  performance  of 
acts  authorized  by  the  other  specific  grants  of  power,  according  to  a 


390  READINGS  IN  ECONOMIC  HISTORY 

strict  construction  of  them,  but  that  on  further  reflection  and  observa- 
tion his  mind  had  undergone  a  change;  that  his  opinion  then  was 
"that  Congress  have  an  unlimited  power  to  raise  money,  and  that  in 
its  appropriation  they  have  a  discretionary  power,  restricted  only  by 
the  duty  to  appropriate  it  to  purposes  of  common  defense,  and  of 
general,  not  local,  national,  not  State,  benefit; "  and  this  was  avowed  to 
be  the  governing  principle  through  the  residue  of  his  Administration. 
The  views  of  the  last  Administration  are  of  such  recent  date  as  to 
render  a  particular  reference  to  them  unnecessary.  It  is  well  known 
that  the  appropriating  power,  to  the  utmost  extent  which  had  been 
claimed  for  it,  in  relation  to  internal  improvements  was  fully  recog- 
nized and  exercised  by  it.  ... 

If  it  be  the  desire  of  the  people  that  the  agency  of  the  Federal 
Government  should  be  confined  to  the '  appropriation  of  money  in 
aid  of  such  undertakings,  in  virtue  of  State  authorities,  then  the 
occasion,  the  manner,  and  the  extent  of  the  appropriations  should  be 
made  the  subject  of  constitutional  regulation.  This  is  the  more 
necessary  in  order  that  they  may  be  equitable  among  the  several 
States,  promote  harmony  between  different  sections  of  the  Union 
and  their  representatives,  preserve  other  parts  of  the  Constitution 
from  being  undermined  by  the  exercise  of  doubtful  powers  or  the 
too  great  extension  of  those  which  are  not  so,  and  protect  the  whole 
subject  against  the  deleterious  influence  of  combinations  to  carry  by 
concert  measures  which,  considered  by  themselves,  might  meet  but 
little  countenance. 

V.  EFFECTS  OF  THE  ERIE  CANAL 

Development  of  Internal  Improvements  in  the  West,  1825-1850  l 

The  opening  of  the  Erie  Canal  in  1825,  and  its  immediate  success  as  a  means  of 
connecting  New  York  City  with  the  Great  Lake  trade,  caused  similar  attempts 
to  be  made  in  other  states.  The  cities  of  Philadelphia  and  Baltimore  began  at 
once  to  project  railroads  and  canals  in  an  effort  to  get  western  trade,  while  Ohio, 
Indiana,  Illinois  and  other  western  states  undertook  elaborate  systems  of  internal 
improvements.  Mr.  H.  V.  Poor,  whose  writings  on  railroads  and  canals  have  come 
to  be  accepted  as  authoritative,  discusses  these  undertakings  as  follows: 

Previous  to  the  construction  of  the  Erie  Canal,  the  cost  of  trans- 
porting a  ton  of  merchandise  or  produce  from  the  City  of  New  York 
to  the  City  of  Buffalo  was  $100.  The  time  required  was  20  days! 

1  Manual  of  the  Railroads  of  the  United  States  for  1868-69.     By  H.  V.  Poor 
(New  York,  1868),  12-15. 


INLAND  COMMERCE  AND  IMPROVEMENTS  391 

The  cost  and  the  time  involved  in  this  case  was  a  striking  illustration 
of  the  condition  of  the  whole  country;  of  the  necessity  of  improved 
highways,  and  of  the  influence  they  have  exerted  in  the  creation 
of  wealth,  as  well  as  their  social  and  political  importance.  Upon 
the  opening  of  the  canal,  the  cost  of  transportation  from  Buffalo  to 
New  York  was  reduced  from  Sioo  to  85  per  ton,  and  the  time  from 
20  to  6  days.  Previous  to  its  construction,  wheat  grown  in  Central 
and  Western  New  York  was  floated,  in  arks,  down  the  Delaware  and 
Susquehanna  Rivers  to  market  —  to  Philadelphia  and  Baltimore. 
The  City  of  New  York  —  which  now  draws  from  districts  2,000 
miles  distant,  by  the  routes  used,  its  vast  supplies  of  grain  for  dis- 
tribution throughout  all  the  Eastern  States,  and  for  its  foreign  trade 
—  was,  a  little  over  forty  years  ago,  almost  completely  cut  off  from 
the  trade  of  its  own  State.  The  cost  of  transporting  wheat  for  300 
miles  over  ordinary  highways  will  equal  its  average  value  at  the  point 
of  consumption.  Indian  corn  will  bear  transportation  over  earth 
roads  only  about  100  miles.  With  the  improvements  that  have  been 
made  in  the  construction  of  highways,  the  great  bulk  of  supplies 
of  wheat  and  corn  for  the  Eastern  markets  are  now  grown  in  Central 
Illinois  and  in  the  vast  region  lying  to  the  west  and  northwest  of  Lake 
Michigan.  As  fast  as  our  people  have  moved  westward  in  their 
triumphal  march  across  the  continent,  the  railway  which  they  have 
taken  with  them  has  given  a  high  commercial  value  to  whatever  they 
produce,  no  matter  how  far  distant  from  the  points  of  consumption. 
Their  progress,  wealth,  and  we  may  say,  civilization,  have  been  the 
creation,  within  50  years,  of  the  inventive  genius  of  the  race. 

The  success  of  the  Erie  Canal  had  an  electric  effect  upon  the 
whole  country,  and  similar  works  were  everywhere  projected.  The 
States  of  Pennsylvania,  Maryland,  Ohio,  Indiana  and  Illinois  at  once 
embarked  upon  elaborate  systems  designed  to  give  to  every  portion 
of  their  States  the  advantage  of  such  works.  Virginia,  also,  undertook 
the  construction  of  a  canal  from  the  Chesapeake  up  the  valley  of  the 
James  River  to  the  Ohio.  We  have  not  the  space  to  give  even  a 
sketch  of  the  progress  and  results  of  these  undertakings.  While 
very  great  advantages  in  many  cases  were  secured,  all  the  canals 
constructed  in  the  United  States,  except  the  Erie,  the  Delaware  and 
Raritan,  and  the  Chesapeake  and  Delaware,  may  be  regarded  as 
commercial  failures.  They  became  so  from  the  discovery  of  a  better 
mode  of  transportation  —  the  Railway.  The  State  of  Pennsyl- 
vania, alone,  completed  about  1,000  miles  of  canal  within  its  territory, 
the  whole  of  which  have,  within  a  few  years,  been  disposed  of  at 


3)2  READINGS  IN  ECONOMIC  HISTORY 

nominal  prices  to  private  companies.  Their  value  had  been  almost 
entirely  superseded  by  railways,  which  private  enterprise  soon  con- 
structed upon  all  their  routes.  Already  the  use  of  portions  of  these 
canals  has  been  abandoned,  while  the  earnings  of  others,  that  are  still 
kept  up  hardly  meet  the  cost  of  their  maintenance. 

The  great  work  which  the  State  of  Maryland  undertook  —  the 
Chesapeake  and  Ohio  Canal  —  was  carried  only  to  Cumberland,  a 
distance  of  about  180  miles.  It  has  proved  to  be  nearly  valueless, 
even  as  a  local  work.  The  James  River  and  Kanawha  Canal  reached 
many  years  ago,  its  final  terminus  at  the  base  of  the  Alleghany  Moun- 
tains. The  State  of  Ohio  constructed  two  lines  of  limited  capacity 
from  Lake  Erie  to  the  Ohio  —  one  from  Cleveland  to  Portsmouth, 
and  the  other  from  Toledo  to  Cincinnati.  Until  railroads  were  con- 
structed, which  now  cover  that  State  like  a  network,  the  canals 
performed  a  highly  useful  service.  They  have  now  practically 
ceased  to  be  carriers  either  of  produce  or  merchandize.  The  State  of 
Indiana  was  not  so  fortunate  as  Ohio.  Of  an  immense  extent  of 
projected  lines  she  was  able  to  complete  only  one  work,  the  Wabash 
and  Erie  Canal,  which  was  opened  from  Toledo  to  Evansville,  on  the 
Ohio  River.  The  portion  of  this  work  below  Terre  Haute  was 
speedily  abandoned,  while  that  north  of  it  is  now  let  to  private  parties 
upon  the  sole  condition  of  keeping  it  in  repair.  The  State  of  Illinois 
was  enabled  to  complete  only  one  of  the  numerous  works  undertaken 
—  a  canal  from  Lake  Michigan,  at  Chicago,  to  the  navigable  waters 
of  the  Illinois  River.  This  canal  for  many  years  was  a  highly  useful 
and  important  work.  Its  route,  like  that  of  the  Erie  Canal,  is  strik- 
ingly favorable.  Its  summit  is  only  8  feet  above  Lake  Michigan. 
So  nicely  poised  in  the  interior  of  the  Continent  are  the  Great  Lakes, 
that  a  depression  of  their  eastern  bank  only  8  feet  below  its  present 
level  would  send  their  flood  of  waters  —  which,  forming  the  cataract 
of  Niagara,  now  find  their  outlet  under  the  Arctic  climate  of  the  North 
Atlantic  —  down  the  Mississippi  to  the  torrid  regions  of  the  Gulf 
of  Mexico.  Such  topographical  conditions  on  so  vast  a  scale,  have 
been  contrived,  it  would  seem,  for  the  express  purpose  of  supplying 
the  most  perfect  means  of  intercommunication,  and  are  fitted  to 
excite,  in  the  highest  degree,  admiration  and  wonder.  When  united 
to  a  genial  climate  and  a  wealth  in  mineral  and  soil  such  as  are  nowhere 
else  found,  they  must  render  the  country  possessing  such  elements 
of  power  the  theatre  upon  which  is  to  be  enacted  the  greatest  drama 
of  human  life  yet  seen.  .  .  . 


INLAND   COMMERCE  AND   IMPROVEMENTS  393 

VI.   EARLY  DEVELOPMENT  OF  RAILROADS 

Location  and  Construction,  1826-1850  l 

The  success  of  the  English  railroads  stimulated  their  building  in  America.  Here 
and  there  short  lines  were  laid  down,  primarily  for  the  purpose  of  acting  as  feeders 
for  canals  or  rivers.  At  first,  they  were  handicapped  by  lack  of  effective  motive 
power.  Attempts  were  made  to  move  the  cars  by  the  use  of  sails.  The  most 
satisfactory  power  was  found  for  several  years  to  be  horses.  These  gave  way  to 
steam,  the  use  of  which  gave  the  railroad  a  decided  advantage  over  all  other  means 
of  inland  transportation. 

The  excitement  in  relation  to  canals  and  steamboats  was  yet  at 
its  zenith,  when  the  air  began  to  be  filled  with  rumors  of  the  new 
application  of  steam  to  land  carriages  and  to  railroads.  There  were 
many  inventions  and  patents  at  home  and  abroad  in  relation  to  car- 
riages propelled  upon  common  roads  by  steam,  but  these  seem  never 
to  have  attained  much  success,  although  attempts  to  perfect  them 
are  still  made  with  great  perseverance.  On  the  other  hand,  the  use 
of  railroads  from  small  beginnings  has  reached  a  magnitude  which 
overshadows  the  wildest  imaginings  of  the  most  sanguine.  In  1825 
descriptions  came  across  the  water  of  the  great  success  of  the  Darling- 
ton railroad,  which  was  opened  to  supply  London  with  coal,  and  which 
had  passenger  cars  moved  by  steam  at  the  rate  of  seven  miles  per  hour. 
The  most  animated  controversy  sprang  up  in  relation  to  the  possi- 
bility of  such  roads  in  England,  and  was  shared  in  to  some  extent  on 
this  side  of  the  Atlantic.  With  the  national  energy  of  character, 
the  idea  had  no  sooner  become  disseminated  than  it  was  acted  upon. 
The  construction  of  railroads  in  America  is  usually  ascribed  to  the 
emulation  excited  by  the  success  of  the  Liverpool  and  Manchester 
railway.  This  appears  not  to  have  been  the  case,  however,  since 
some  of  the  most  important  works  in  this  country  were  projected  and 
commenced  before  the  Liverpool  and  Manchester  road  was  built. 
The  act  of  Parliament  for  the  construction  of  that  road  was  passed 
in  1826,  and  the  road  itself  was  finished  and  opened  in  September, 
1830,  31  miles  long;  but  the  Massachusetts  Quincy  road,  three  miles 
from  Quincy  to  Neponset,  was  opened  in  1827,  and  a  great  celebration 
was  held  in  consequence.  The  celebrated  Mauch  Chunk  railroad  of 
Pennsylvania  was  begun  in  1826,  and  finished  in  the  following  year. 
On  that  road  the  horses  which  draw  up  the  empty  coal  wagons  are 
sent  down  on  the  cars  which  descend  by  their  own  gravity.  This 
contrivance  was  borrowed  by  the  Mauch  Chunk  road  from  the 

1  Eighty  Years'  Progress.     By  Thomas  P.  Kettell  (Hartford,  1869),  191-3. 


394  READINGS  IN  ECONOMIC  HISTORY 

Darlington  road,  similarly  situated,  in  England.  It  is  to  be  remarked 
that  both  the  Quincy  and  the  Mauch  Chunk  roads  were  horse  roads; 
the  locomotive  was  not  at  first  introduced.  In  1828,  twelve  miles 
of  the  Baltimore  and  Ohio  railroad  were  completed,  two  years  before 
the  Manchester  road  was  opened.  In  the  same  year,  1828,  the  South 
Carolina  road,  from  Charleston  to  Hamburg,  was  surveyed,  and  in 
Massachusetts  the  city  of  Boston  voted  the  construction  of  a  road 
from  that  city  to  the  Hudson  at  Albany.  The  first  portion  of  that 
road,  however,  Boston  to  Worcester,  44  miles,  was  not  opened  until 
1835.  The  second  road  finished  in  the  United  States  was  the  Rich- 
mond, Va.,  road,  thirteen  miles  to  Chesterfield,  in  1831,  and  in  the 
same  year  that  running  from  New  Orleans,  five  miles  to  Lake  Pont- 
chartrain,  was  opened.  Thus  roads  were  well  adopted  in  public 
opinion  here  before  the  great  success  of  the  Manchester  road  was. 
known,  but  which  gave  an  undoubted  impulse  to  the  fever.  During 
the  excitement  in  relation  to  "rail"  roads,  a  writer  in  a  Providence 
paper  thus  satirized  the  condition  of  the  Connecticut  roads.  He 
claimed  the  invention  of  the  cheapest  "rail"  roads,  and  proved  it 
thus:  "Only  one  English  engine  alone  costs  $2,000,  which  sum  the 
whole  of  our  apparatus  does  not  much  exceed,  as  figures  will  prove; 
for  700  good  chestnut  rails  at  $3,  amounts  to  only  $21,  and  it  ought 
to  be  remembered  that  this  is  all  the  expense  we  are  at,  and  the 
inference  is  conclusive  in  our  favor.  We  place  our  rails  fifty  to  the 
mile  by  the  side  of  the  road,  to  pry  out  the  wheels  when  they  get 
stuck,  and  hoist  behind  when  wanted."  The  public  were,  however, 
no  longer  to  be  satisfied  with  this  kind  of  "rail"  road.  They  em- 
barked in  the  new  enterprise  with  such  vigor,  that  in  1836  two  hundred 
companies  had  been  organized,  and  1,003!  miles  were  opened  in  eleven 
states.  These  were  highly  speculative  years,  however,  and  the  revul- 
sion brought  matters  to  a  stand. 

It  was  at  once  apparent  to  the  commercial  mind  that  if  railroads 
would  perform  what  was  promised  for  them,  geographical  position 
was  no  longer  important  to  a  city.  In  other  words,  that  railroads 
would  bring  Boston  into  as  intimate  connection  with  every  part  of 
the  interior  as  New  York  could  be.  The  large  water  communica- 
tion that  enabled  New  York  by  means  of  steamboats  to  concentrate 
trade  from  all  quarters,  could  not  now  compete  with  the  rails  that 
would  confer  as  great  advantages  upon  Boston.  Indeed,  Boston  had 
now  availed  herself  of  steam  power.  Up  to  1828  she  owned  no 
steamers.  The  Benjamin  Franklin,  built  in  that  year,  was  the  first, 
and  her  steam  tonnage  is  now  but  9,998  tons.  When  she  bought  her 


INLAND   COMMERCE  AND   IMPROVEMENTS  395 

first  steamboat,  however,  she  was  laying  out  those  railroad  connections 
that  she  has  since  pushed  so  vigorously,  and  they  have  paid  an  enor- 
mous interest,  if  nor  directly  to  the  builders,  at  least  to  the  general 
interests  of  the  city. 

It  is  to  be  remarked  that  the  national  government  expended,  as 
we  have  seen,  largely  in  the  construction  of  highways,  the  clearing  out 
of  rivers,  and  the  improvement  of  harbors.  The  people  have  by 
individual  taxes  mostly  constructed  the  earth  roads  of  this  country. 
The  canals  have,  however,  with  a  fewT  exceptions,  been  state  works, 
built  by  the  proceeds  of  state  loans,  with  the  aid  of  lands  donated  by 
the  federal  government.  These  lands  were  made  marketable  and 
valuable  by  the  action  of  the  canals  in  aid  of  which  they  were  granted. 
The  railroads  of  the  country  have  been,  as  a  whole,  built  on  a  differ- 
ent plan,  viz.,  by  corporations,  or  chartered  companies  of  individuals. 
These  associations  have  not,  however,  themselves  subscribed  the 
whole  of  the  money,  probably  not  more  than  half,  but  they  have 
found  it  to  their  interest  to  borrow  the  money  on  mortgage  of  the 
works.  The  great  object  of  the  companies  has  not  been  so  much  to 
derive  a  direct  profit  from  the  investment,  as  to  cause  the  construc- 
tion of  a  highway,  which  should  by  its  operation  increase  business, 
enhance  the  value  of  property,  and  swell  the  floating  capital  of  the 
country  by  making  available  considerable  productions  of  industry, 
which  before  were  not  marketable,  since  the  influences  of  a  railroad 
in  a  new  district  is  perhaps,  if  not  to  create,  at  least  to  bring  into  the 
general  stock  more  capital  than  is  absorbed  in  its  construction. 

Thus  in  the  last  twenty-five  years,  a  thousand  millions  of  dollars 
have  been  spent  in  the  construction  of  roads,  and  yet  capital  is  pro- 
portionally more  abundant  now  than  before  this  vast  expenditure, 
and  land  has,  in  railroad  localities,  increased  by  a  money  value  greater 
than  the  cost  of  the  roads!  We  have  seen  that  before  the  operation 
of  canals,  land  transportation  was,  and  is  now  remote  from  these 
works,  one  cent  per  mile  per  hundred.  If  a  barrel  of  flour  is  then 
worth  in  market  five  dollars,  a  transportation  of  300  miles  would 
cost  more  than  its  whole  value;  but  by  rail  it  may  be  carried  from 
Cincinnati  to  New  York  for  one  dollar.  Thus  railroads  give  circula- 
tion to  all  the  surplus  capital  that  is  created  by  labor  within  their 
circle.  It  is  on  this  principle  that  may  be  explained  the  immense 
prosperity  that  has  been  seen  to  attend  the  enormous  expenditure 
for  railroads,  particularly  during  the  last  ten  years. 


396  READINGS  IN  ECONOMIC  HISTORY 

VII.   RAILROADS  versus  CANALS 
A.  Arguments  for  Railroads  in  1832  l 

Even  before  the  completion  of  the  Erie  Canal,  experiments  in  railroad  building 
were  being  made.  As  soon  as  the  latter  appeared  to  be  practicable  and  likely 
to  compete  with  the  canals  for  freight  and  passenger  traffic,  the  friends  of  the 
canals  began  an  agitation  against  the  building  of  railroads.  Work  on  the  Balti- 
more &  Ohio  Railroad  was  retarded  for  years  by  the  opposition  on  the  part  of  the 
promoters  of  the  Chesapeake  and  Ohio  Canal.  Likewise  in  New  York  the  state 
discriminated  against  the  New  York  Central  Railroad  in  favor  of  the  Erie  Canal. 
Naturally  the  friends  of  each  enterprise  endeavored  to  convince  the  people  of  the 
desirability  of  building  canals  or  railroads  as  the  case  might  be.  The  controversy 
at  last  reached  the  stage  where  Congress  investigated  the  merits  of  the  claims 
of  each,  the  main  points  of  issue  of  which  were  as  follows: 

The  various  means  which  human  ingenuity  has  devised  for  effect- 
ing an  extensive  intercourse  in  the  present  state  of  knowledge,  consist 
of  roads,  railways,  and  canals. 

The  enterprise  of  our  citizens  was,  at  an  early  period,  turned  to 
the  first,  and,  if  we  may  credit  accounts  on  this  subject,  scarcely 
less  anxiety  was  felt  at  that  time  to  obtain  grants  from  the  Legis- 
lature for  the  construction  of  turnpike  roads,  than  is  now  evinced  to 
obtain  railroad  privileges.  These  early  enterprises  did  not  yield 
much  pecuniary  profit  to  the  stockholders;  nevertheless  they  were  of 
incalculable  good  to  this  young  but  growing  country.  The  facilities 
of  intercourse  were  promoted,  and  the  general  interests  of  the  com- 
munity were  advanced.  Next  in  succession  came  the  desire  for 
canals.  The  State  having  yielded  her  assent,  the  construction  of  the 
Erie  canal  presented  at  once  a  new  and  interesting  view  of  the  bene- 
fits of  this  mode  of  internal  communication  —  the  public  mind  again 
became  engaged  in  works  of  internal  improvement,  and,  to  what 
extent  this  feeling  prevailed,  may  be  learned  from  the  following 
extract  taken  from  the  message  of  the  Governor  in  the  year  1827. 
"The  canals,  which  now  principally  occupy  the  public  attention, 
embrace  a  navigable  union  of  the  principal  bays  on  Long  Island  — 
of  the  Delaware  and  Hudson  rivers  —  of  the  Erie  canal,  with  the 
east  and  west  branches  of  the  Susquehannah  —  with  the  Alleghany 
river  —  with  Lake  Ontario,  by  Great  Sodus  bay  —  with  Black  and 
St.  Lawrence  rivers,  and  between  the  latter  river  and  Lake  Cham- 
plain;  and  even  a  canal  from  Lake  Erie  to  the  Hudson  river,  by  an 

1  Documents  in  Relation  to  the  Comparative  Merits  of  Canals  and  Railroads 
Submitted  by  Mr.  Howard  of  Maryland.  (Doc.  101,  Committee  Report  on  Steam 
Carriages,  etc.,  22d  Congress,  ist  session,  221-5.) 


INLAND   COMMERCE   AND   IMPROVEMENTS  397 

entire  new  route,  has  been  suggested  as  practicable  and  expedient, 
and  urged  with  great  earnestness  and  energy."  At  the  time  this  mes- 
sage was  communicated  to  the  Legislature,  only  one  charter  for  a 
railroad  had  been  granted,  and  of  so  little  importance  was  this  new 
mode  of  conveyance  considered,  that  the  Governor  did  not  even  allude 
to  the  subject,  and  individuals  could  not  be  found  possessed  of 
means  and  faith  sufficient  to  fill  the  stock  and  undertake  the  enter- 
prise. The  public  have  thus  been  led  on  from  one  useful  and  patriotic 
improvement  to  another,  constantly  developing  new  resources,  and 
holding  out  for  example  and  emulation  some  of  the  most  bold,  useful, 
and  successful  enterprises,  that  any  country  in  any  age  has  ever  wit- 
nessed. From  the  knowledge  we  possess  of  the  rapid  advance  of 
our  fellow  citizens  in  this  knowledge  of  their  wants  and  resources, 
and  the  most  efficient  manner  of  developing  them,  it  will  not  be 
necessary  for  us  to  more  than  hint  at  the  difference  between  the  two 
last  mentioned  improvements.  .  .  . 

Canals  are  confined  to  comparatively  low  districts,  on  account 
of  the  necessity  of  an  adequate  supply  of  water,  and  of  the  expense 
and  delay  of  locks  and  lockage.  Railways  may  be  made  to  traverse 
regions  however  elevated,  and  the  ascents  and  descents  are  not  only 
not  limited,  but  they  are  overcome  in  a  comparatively  short  space 
of  tune,  owing  to  the  great  superiority  which  inclined  planes  possess 
over  locks. 

Canals  experience  the  change  of  the  seasons  most  sensibly;  the 
drought,  the  floods,  and  the  frost,  are  serious  and  insurmountable 
impediments  to  their  construction,  and  whether  they  be  constructed 
in  the  frigid,  temperate,  or  torrid  zone,  the  effect  of  such  changes 
cannot  be  avoided. 

Railways  are  said  not  to  be  affected  by  either;  and  certainly  the 
two  first  cannot  operate  upon  them.  The  last  has  been  a  subject 
of  speculation  among  the  inexperienced,  and,  as  the  construction  of 
railways  in  this  country  is  of  so  recent  date,  perhaps  we  may  not  be 
enabled  to  rely  with  implicit  confidence  on  such  experiments  as  have 
been  made. 

The  Baltimore  and  Ohio  Railroad  Company,  however,  furnishes 
some  evidence  on  this  point,  and  would  seem  to  put  this  question 
at  rest.  Under  date  of  the  3ist  of  December  last,  the  Baltimore 
American  says:  "while  all  the  communications  by  river  and  canal 
throughout  the  country  are  suspended  on  account  of  the  ice,  our  great 
railroad  continues  in  active  and  steady  operation,  without  the  least 
interruption  or  hindrance  from  frost,  snow,  or  any  other  obstacle.  The 


398  READINGS  IN  ECONOMIC  HISTORY 

passenger  carriages,  generally  full  both  ways,  have  traversed  the  line 
of  sixty  miles  between  Baltimore  and  Frederick,  daily,  since  the 
opening  of  the  road"  This  fact  tends  to  prove  that  railroads  may 
be  used  at  all  seasons  of  the  year.  The  difference,  however,  between 
the  climate  of  Maryland  and  New  York,  may  be  assigned  as  a  reason 
for  still  urging  this  latter  objection,  and  is  certainly  worthy  of 
consideration. 

In  consequence  of  the  almost  exclusive  use  of  steam  power  on  rail- 
ways, this  question,  on  some  routes,  may  be  one  of  serious  import,  and 
would  require  close  and  satisfactory  investigation,  before  entering  upon 
the  construction  of  any  road,  the  utility  and  profit  of  which  depend 
solely  on  the  business  of  the  winter:  on  any  other  route  it  cannot 
be  a  matter  of  so  much  moment,  for  if  it  would  be  a  good  reason  to 
deter  from  the  construction  of  railroads,  it  might  be  urged  with  much 
more  force  against  canals.  Many  propositions  have  been  made  to 
obviate  this  difficulty,  but  as  the  question  does  not  seem  to  be  en- 
tirely settled  by  experience,  the  committee  are  not  prepared  to  point 
out  any  remedy  or  express  any  opinion.  They  may,  however,  safely 
anticipate,  that  all  obstacles  which  are  not  insurmountable,  will  be 
overcome  by  the  ingenuity  and  enterprise  of  our  citizens.  Many 
difficulties  have  already  been  overcome,  and,  as  the  spirit  of  im- 
provement has,  by  recent  discovery,  received  a  new  impetus, 
we  are  warranted  in  the  most  sanguine  anticipations  of  entire 
success.  .  .  . 

"Twenty  years  ago,  we  believe,  the  mails  did  not  travel  faster 
than  about  seven  miles  an  hour.  From  seven  miles  it  was  raised 
to  eight,  and  every  one  cried  what  an  improvement!  From  eight  it 
was  raised  to  nine,  and  this  was  hailed  as  nothing  less  than  'pro- 
digious ! '  '  Attempts  are  making  to  force  it  up  to  ten  miles  an  hour, 
but  to  any  thing  beyond  this,  to  a  certainty,  horse  power  fails  us. 
How  then  shall  we  find  terms  adequate  to  express  the  value  of  a  dis- 
covery that  carries  us  at  once  from  ten  to  twenty  or  thirty  miles 
an  hour? 

The  experiments  which  have  been  made  in  England  go  far  to  prove 
that  we  have  not  yet  arrived  at  the  point  where  improvement  in  speed 
must  cease.  The  present  average  of  speed  upon  the  Liverpool  and 
Manchester  railway  is  sixteen  miles  per  hour.  The  maximum 
velocity,  unloaded,  is  thirty-two  miles  per  hour.  With  a  load  of 
thirteen  tons,  including  many  passengers,  Mr.  Stevenson's  engine, 
the  Rocket,  travelled  at  the  rate  of  fifteen  miles  an  hour;  and  the 
engine  of  Braithwaite  and  Erickson,  of  London,  moved  at  the  aston- 


INLAND   COMMERCE  AND   IMPROVEMENTS  399 

ishing  speed  of  twenty-eight  miles  an  hour.  "It  seemed  indeed," 
said  a  spectator,  "to  fly,  presenting  one  of  the  most  sublime  spec- 
tacles of  human  ingenuity  and  human  daring  the  world  ever  beheld. 
It  actually  made  one  giddy  to  look  at  it,  and  filled  thousands  with 
lively  fear  for  the  safety  of  individuals  who  were  on  it,  and  who  seemed 
not  to  run  along  the  earth,  but  to  fly,  as  it  were,  on  the  wings  of  the 
wind.  When  the  vehicle,"  he  continues,  "nicely  poised  on  springs, 
and  covered  in  to  exclude  the  external  current  of  air  created  by  its 
motion,  you  might  imagine  you  were  in  a  state  of  perfect  rest,  while 
you  are  flying  along  the  surface  with  the  speed  of  a  racer.  Then  the 
steam  horse  is  not  apt,  like  his  brother  of  flesh  and  blood,  to  be  fright- 
ened from  his  propriety  by  sudden  fancies  which  defy  the  prudence 
and  skill  of  the  driver.  Explosion,  if  it  takes  place,  will  not  injure 
the  passengers,  for  they  are  in  a  separate  vehicle,  and  the  enginemen 
may  be  trusted  with  the  care  of  their  own  lives.  In  daylight,  and  with 
good  arrangements,  travelling  in  the  steam  coach,  at  twenty  miles 
an  hour,  may  be  much  more  safe,  as  well  as  pleasant,  than  in  any 
ordinary  stage  coach  at  eight  or  nine." 

The  practicability  of  railways  for  the  transportation  of  passengers, 
has  been  proved  beyond  question,  and,  from  recent  experiments,  no 
doubt  can  be  entertained  that  every  description  of  article  will  be  even- 
tually conveyed  on  rails.  Even  now,  many  companies  in  England, 
owning  the  most  profitable  canals  in  the  Kingdom,  contemplate 
draining  them,  and  laying  railways  on  their  site.  Should  they  do  so, 
it  will  be  a  very  strong  evidence  of  the  superiority  of  railways  over 
canals  in  the  transportation  of  bulky  articles.  .  .  . 

The  difference  in  the  expense  of  constructing  railways  and  canals 
have  been  variously  estimated;  some  put  it  down  at  one  half,  others 
at  one-third,  and  again  we  have  seen  it  estimated  as  nearly  equal; 
but,  from  the  knowledge  possessed  by  your  committee,  either  derived 
from  actual  observation  or  indisputable  authority,  they  are  induced 
to  believe  that  the  cost  of  a  railway  is  about  two-thirds  that  of  a 
canal  through  the  same  route.  A  single  railway,  or  one  set  of  tracks, 
with  suitable  turn-outs,  will  cost  from  nine  to  twelve  thousand 
dollars.  A  double  railway,  with  two  complete  sets  of  tracks,  will 
cost  from  15  to  18  thousand  dollars  per  mile.  These  estimates  are 
for  well  constructed  lines  of  railways,  through  a  favorable  country, 
and  do  not  include  any  extraordinary  difficulty.  Every  road  which  is 
intended  to  pass  over  a  large  extent  of  country,  will  be  more  or  less 
obstructed  by  mountains,  streams,  vallies,  &c.,  and  in  all  these  cases, 
the  divisions  of  the  road  will  be  subject  to  change  accordingly.  The 


400  READINGS  IN  ECONOMIC  HISTORY 

cost  of  that  part  of  the  Baltimore  and  Ohio  railroad  which  has  been 
completed  with  double  tracks,  consisting  of  61  miles,  is  not  pre- 
cisely known;  but  the  company  are  of  the  opinion  that  the  average 
cost,  to  the  Ohio,  from  the  present  termination,  will  fall  but  little 
short  of  $20,000  per  mile. 

B.   Arguments  for  Canals  in  1830 l 

Despite  what  appears  to  have  been  convincing  arguments  to  the  contrary,  the 
friends  of  canals  insisted  that  railroads  were  then,  and  would  continue  to  be,  in- 
ferior to  canals  as  routes  of  travel  and  transportation.  Illustrations  of  their 
arguments  are  as  follows: 

Railroads  are  a  great  improvement  on  turnpikes;  but,  in  my 
opinion,  are  vastly  inferior  (particularly  as  a  public  work,  and  in  a 
republican  country)  to  canals,  both  as  to  convenience  as  well  as 
economy.  A  canal  is  accessible  everywhere,  a  railroad  nowhere, 
(without  interrupting  the  current  of  wagons,)  except  by  an  arrange- 
ment for  turning  out;  and  the  more  turn  outs  are  made,  the  greater 
the  casualties.  By  canal,  every  boatman  may  choose  his  own  mo- 
tion, within  the  maximum  motion;  by  railroad,  every  traveller  must 
have  the  same  motion,  or  be  subject  to  turn  outs;  which,  as  I  have 
said,  have  their  casualties.  The  motion  of  twenty  and  thirty  miles 
an  hour  on  railroads  will  be  fatal  to  wagons,  road,  and  loading,  as 
well  as  human  life. 

We  have  a  distance  of  eight  miles  from  the  mines,  with  a  descent 
of  seventy  to  one  hundred  and  twelve  feet  in  a  mile.  The  velocity 
of  the  wagons  would  exceed  thirty  miles  an  hour,  if  not  checked. 
Our  first  two  months'  use  of  the  road  was  fifteen  and  twenty  miles 
an  hour,  which  would  have  soon  ruined  both  road  and  wagons, 
and,  I  am  persuaded,  was  then  dearer  than  the  turnpike  we  put  our 
rails  on. 

Our  present  motion,  say  of  six  miles  an  hour,  is  very  satisfactory; 
and  makes  the  railroad  an  immensely  valuable  appendage  to  our 
coal  business.  Wet  or  dry,  we  go  on  it;  moist  and  wet  weather, 
which  ruins  turnpikes,  makes  the  wagons  run  freer  on  the  railroad; 
snow,  however,  is  an  impediment.  Our  wagons  will  not  run  down  from 
the  mines,  by  gravity,  in  a  snow  storm;  the  snow  packs  on  the  road. 
In  such  weather,  as  well  as  in  sleety  weather,  we  cannot  use  the  brake, 


1  Documents  in  Relation  to  the  Comparative  Merits  of  Canals  and  Railroads, 
Submitted  by  Mr.  Howard  of  Maryland.  (Doc.  101,  Committee  Report  on  Steam 
Carriages,  etc.,  22d  Congress,  ist  session,  237-8.) 


INLAND   COMMERCE  AND   IMPROVEMENTS  401 

as  it  slips  too  freely  to  produce  the  necessary  friction  to  check  the 
wagons. 

I  think  it  rather  fortunate  for  society,  that  railroads  are  not  of 
equal  value  to  canals,  for  a  railroad  can  be  taken  anywhere;  and, 
consequently,  no  improvements  would  be  safe  on  their  line:  for  the 
moment  the  improvement  succeeded,  it  would  be  rivalled,  so  as  to 
destroy  both,  &c.,  whereas  we  know  the  line  and  limits  of  our  canals, 
by  the  supply  of  water,  and  graduation  of  the  ground;  so  that  all 
improvements  thereon  are  safe  against  the  undermining  of  rivals.  I 
should  consider,  that,  if  the  railroads  superseded  canals,  they  would, 
for  the  above  reasons,  render  the  tenure  or  value  of  property  as  in- 
secure as  it  would  be  if  without  the  protection  of  law. 


C.   Canals  and  Railroads  —  Rates  and  Expense  of  Maintenance,  1835 l 

The  controversy  regarding  cost  of  construction  and  the  efficiency  of  operation 
was  naturally  closely  connected  to  the  question  of  rates  and  expense  of  mainte- 
nance. A  committee  of  the  New  York  legislature  reported  on  these  phases  of  the 
controversy  in  1835  as  follows: 

In  regard  to  their  relative  merits  as  affording  the  means  of  trans- 
portation, there  is  less  difficulty  in  reaching  an  approximate  ratio. 
In  reducing  them  both  to  a  level,  we  attain  for  general  purposes,  a 
fair  standard  of  comparison.  Taking  the  facts  we  have  obtained  as 
a  basis,  we  find  the  relative  cost  of  conveyance  is,  as  4.375  to  i,  a 
little  over  four  and  one-third  to  one,  in  favor  of  canals:  this  is  exclusive 
of  tolls  or  profits.  If  the  cost  of  construction,  the  annual  cost  for 
repairs,  and  the  amount  of  tonnage  were  the  same  on  a  canal  as  on  a 
rail-road,  then  the  same  rate  of  toll  would  produce  the  same  rate  of 
profit  on  each.  Our  examinations  have  shown,  as  before  stated,  that 
rail-roads  in  the  average,  cost  more  than  canals,  both  in  their  con- 
struction and  repairs.  But  for  comparison,  we  assume  a  case  in  which 
they  are  equal,  and  charge  the  same  toll.  The  average  tolls  on  the 
Erie  canal  are  less  than  one  cent  per  ton  per  mile :  assuming  an  average 
toll  of  one  cent  per  ton  per  mile,  the  ratio  of  the  entire  cost  of  trans- 
portation and  toll  is,  as  (2.5  to  i,)  two  and  a  half  to  one,  in  favor  of 
canals.  In  the  preceding  computations,  the  cost  of  transportations 
on  railroads  is  the  nett  cost,  as  reported  by  rail-road  companies,  allow- 
ing no  profits  on  this  business,  while  the  charges  on  the  canals  is  at 
contract  prices,  which  are  supposed  to  yield  a  profit  to  the  carrier. 


1  Assembly  Documents.     (Albany,  N.  Y.,  1835),  Doc.  296,  pp.  42-4. 


402  READINGS  IN  ECONOMIC  HISTORY 

The  cost  of  transportation  on  canals,  as  previously  stated,  is  the  aver- 
age on  the  Erie  canal,  the  Delaware  and  Hudson  canal,  and  the 
Schuylkill  canal ;  on  the  two  latter,  the  cost  of  transporting  coal  only 
is  known ;  and  the  total  average  of  the  three  canals  is  almost  exactly 
the  same  as  the  average  price  for  the  several  different  articles  trans- 
ported on  the  Erie  canal.  The  preceding  calculations  are  confined 
to  a  velocity  not  much  exceeding  50  or  60  miles  in  24  hours.  We  have 
not  instituted  any  investigation  to  show  the  relative  economy  in  high 
and  low  velocities.  For  the  conveyance  of  freight,  we  are  of  the 
opinion,  canals  are  not  well  adapted  to  any  material  increase  of  speed 
beyond  3  miles  per  hour;  and  as  the  speed  on  half  of  the  rail-roads 
embraced  in  this  computation,  is  from  10  to  15  miles  per  hour,  we  may 
consider  this  comparison  as  nearly  similar  to  one  of  high  velocity 
on  rail-roads,  and  low  velocity  on  canals.  And  goods  that  can  afford 
to  pay  the  difference  above  indicated,  for  the  saving  of  time,  would 
hold  the  two  kinds  of  conveyance  in  equilibrium.  The  amount  that 
would  find  so  great  an  object  in  the  saving  of  time,  in  comparison 
to  the  total  quantity  requiring  transportation,  it  is  believed  would  be 
small.  In  relation  to.  the  conveyance  of  passengers,  the  saving  of 
time  is  highly  important,  and  the  rail-road  becomes  eminently  the 
superior  method  of  communication.  We  are  therefore  led  to  the 
conclusion,  that  in  regard  to  the  cost  of  construction  and  mainte- 
nance, and  also  in  reference  to  the  expense  of  conveyance  at  moderate 
velocities,  canals  are  clearly  the  most  advantageous  means  of  com- 
munication. On  the  other  hand,  where  high  velocities  are  required, 
as  for  the  conveyance  of  passengers,  and  under  some  circumstances  of 
competition,  for  light  goods  of  great  value,  in  proportion  to  their 
weight,  the  preference  would  be  given  to  a  rail-road. 

It  may  be  observed  in  favor  of  rail-roads,  that  they  admit  of  ad- 
vantageous use  in  districts  where  canals,  for  the  want  of  water,  would 
be  impracticable.  This  advantage  often  occurs  in  mining  districts, 
and  sometimes  for  general  trade,  where  it  is  necessary  to  cross  divid- 
ing ridges  at  a  level  too  high  to  obtain  water  for  their  summits. 

The  facts  and  reasonings  presented,  we  believe  clearly  show,  that 
both  canals  and  rail-roads,  are  highly  important  means  of  internal 
communication;  that  each  has  its  peculiar  advantages,  and  will 
predominate  according  to  the  character  of  the  route,  and  the  trade 
for  which  it  is  intended  to  provide.  .  .  . 


INLAND   COMMERCE  AND   IMPROVEMENTS 


403 


COMPARISON  OF   RATES   OF  TRANSPORTATION 


Ton  of  2,000  pounds 

Price 
per  ton 
per  mile 

Cost  if 
carried 
200  miles 

Prices  of  transportation  during  the  years  1817,  1818,  1819, 
by  teams,  from  Albany  to  Buffalo,  (usual  rates,  84.25 
pr  cwt.,)  

Cts.  Mills 

29-3 

3-95 
1.83 
0.97 
0-93 

4.0 
6.0 

7-  5 
1.38 

2.  76 
0.96 

2.74 

2  .42 
3.00 

Dolls.  Cts. 
858     60 

7     90 
3     66 
i     94 
i     86 

8     oo 

12       OO 

15     oo 

2       76 

5     52 
i     92 

5     48 

4     84 
6     oo 

Rates  of  1835,  (including  tolls,): 
By  Erie  Canal  — 
For  merchandize    .                

Flour      .                    

Staves    .    .            

Salt     .                   

Baltimore  and  Ohio  Rail-Road  — 
Down  freight                              

UD            " 

Liverpool  and  Manchester  Rail-Road  — 
For  merchandize                            

Hudson  river,  145  miles  — 
Heavy  goods,  (from  N.  Y.  to  Albany, 
10  cts  per  100  Ibs.)  

Light         "      20                              

Provisions  &c  7                                

Lake  Ontario  — 
Merchandize,  (from  Oswego  to  Lewiston,  146  miles, 
20  cts  pr  100  Ibs  all  kinds,)  

Lake  Erie  — 

Merchandize,  (from  Buffalo  to  Cleaveland,  1.90  miles, 
23  cts  pr  100  Ibs  )  for  heavy  goods,  ....        .    . 

29  cts  pr  100  Ibs.  for  light  goods,  

404  READINGS  IN  ECONOMIC  HISTORY 

VIII.  PROGRESS  AND  DEVELOPMENT  OF  RAILROADS 

During  the  Decade,  1850-1860  l 

The  decade  1850-1860  saw  rapid  railroad  development  in  the  United  States. 
Lines  already  in  operation  were  extended  and  new  ones  were  laid  down.  In 
addition  the  hauling  capacity  of  the  roads  for  both  freight  and  passengers  was 
materially  increased. 

The  decade  which  terminated  in  1860  was  particularly  dis- 
tinguished by  the  progress  of  railroads  in  the  United  States.  At  its 
commencement  the  total  extent  in  operation  was  8,588.79  miles, 
costing  $206.260,128;  at  its  close,  30,598.77  miles,  costing  $1,134,- 
452,909;  the  increase  in  mileage  having  been  22,004.08  miles,  and 
in  cost  of  construction  $838,192,781. 

While  the  increase  in  mileage  was  nearly  300  per  cent.,  and  the 
amount  invested  still  greater,  the  consequences  that  have  resulted 
from  these  works  have  been  augmented  in  vastly  greater  ratio.  Up 
to  the  commencement  of  the  decade  our  railroads  sustained  only  an 
unimportant  relation  to  the  internal  commerce  of  the  country.  Nearly 
all  the  lines  then  in  operation  were  local  or  isolated  works,  and  neither 
in  extent  nor  design  had  begun  to  be  formed  into  that  vast  and  con- 
nected system  which,  like  a  web,  now  covers  every  portion  of  our 
wide  domain,  enabling  each  work  to  contribute  to  the  traffic  and  value 
of  all,  and  supplying  means  of  locomotion  and  a  market,  almost  at 
his  own  door,  for  nearly  every  citizen  of  the  United  States. 

Previous  to  the  commencement  of  the  last  decade  only  one  line  of 
railroad  had  been  completed  between  tide- water  and  the  great  interior 
basins  of  the  country,  the  products  of  which  now  perform  so  important 
a  part  in  our  internal  and  foreign  commerce.  Even  this  line,  formed 
by  the  several  links  that  now  compose  the  New  York  Central  road, 
was  restricted  in  the  carriage  of  freight  except  on  the  payment  of 
canal  tolls,  in  addition  to  other  charges  for  transportation,  which 
restriction  amounted  to  a  virtual  prohibition.  The  commerce  result- 
ing from  our  railroads  consequently  has  been,  writh  comparatively 
slight  exceptions,  a  creation  of  the  last  decade. 

The  line  next  opened,  and  connecting  the  western  system  of  lakes 
and  rivers  with  tide-water,  was  that  extending  from  Boston  to  Og- 
densburg,  composed  of  distinct  links,  the  last  of  which  was  completed 
during  1850.  The  third  was  the  New  York  and  Erie,  which  was 
opened  on  the  22d  of  April,  1851.  The  fourth,  in  geographical  order, 
was  the  Pennsylvania,  which  was  completed  in  1852,  although  its 

1  Preliminary  Report  on  the  Eighth  Census,  1860.     (Washington,  1862),  103-5. 


INLAND  COMMERCE  AND  IMPROVEMENTS  405 

mountain  division  was  not  opened  till  1854.  Previous  to  this  time 
its  summit  was  overcome  by  a  series  of  inclined  planes,  with  stationary 
engines,  constructed  by  the  State.  The  fifth  great  line,  the  Baltimore 
and  Ohio,  was  opened,  in  1853,  still  further  south.  The  Tennessee 
river,  a  tributary  of  the  Mississippi,  was  reached,  in  1850,  by  the 
Western  and  Atlantic  railroad  of  Georgia,  and  the  Mississippi  itself, 
by  the  Memphis  and  Charleston  railroad,  in  1859.  In  the  extreme 
north  the  Atlantic  and  St.  Lawrence,  now  known  as  the  Grand  Trunk, 
was  completed  early  in  1853.  In  1858,  the  Virginia  system  was  ex- 
tended to  a  connexion  with  the  Memphis  and  Charleston  and  with 
the  Nashville  and  Chattanooga  railroads. 

The  eight  great  works  named,  connecting  the  interior  with  the 
seaboard,  are  the  trunks  or  base  lines  upon  which  is  erected  the  vast 
system  that  now  overspreads  the  whole  country.  They  serve  as 
outlets  to  the  interior  for  its  products,  which  would  have  little  or  no 
commercial  value  without  improved  highways,  the  cost  of  transporta- 
tion over  which  does  not  equal  one-tenth  that  over  ordinary  roads. 
The  works  named,  assisted  by  the  Erie  Canal,  now  afford  ample  means 
for  the  expeditious  and  cheap  transportation  of  produce  seeking  eastern 
markets,  and  could,  without  being  overtaxed,  transport  the  entire 
surplus  products  of  the  interior. 

Previous  to  1850  by  far  the  greater  portion  of  railroads  constructed 
were  in  the  States  bordering  the  Atlantic,  and,  as  before  remarked, 
were  for  the  most  part  isolated  lines,  whose  limited  traffics  were  alto- 
gether local.  Up  to  the  date  named,  the  internal  commerce  of  the 
country  was  conducted  almost  entirely  through  water  lines,  natural 
and  artificial,  and  over  ordinary  highways.  The  period  of  the  settle- 
ment of  California  marks  really  the  commencement  of  the  new  era 
in  the  physical  progress  of  the  United  States.  The  vast  quantities 
of  gold  it  produced  imparted  new  life  and  activity  to  every  portion 
of  the  Union,  particularly  the  western  States,  the  people  of  which,  at 
the  commencement  of  1850,  were  thoroughly  aroused  as  to  the  value 
and  importance  of  railroads.  Each  presented  great  facilities  for  the 
construction  of  such  works,  which  promised  to  be  almost  equally 
productive.  Enterprises  were  undertaken  and  speedily  executed  which 
have  literally  converted  them  into  a  net-work  of  lines,  and  secured 
their  advantages  to  almost  every  farmer  and  producer. 

.  .  .  The  only  important  line  opened  in  the  west,  previous  to 
1850,  was  the  one  from  Sandusky  to  Cincinnati,  formed  by  the  Mad 
River  and  Little  Miami  roads.  But  these  pioneer  works  were  rude, 
unsubstantial  structures  compared  with  the  finished  works  of  the  pres- 


406  READINGS  IN  ECONOMIC  HISTORY 

ent  day,  and  were  employed  almost  wholly  in  the  transportation  of 
passengers.  Within  the  decade,  in  place  of  this  one  line,  railroads 
have  been  constructed  radiating  from  lakes  Erie  and  Michigan,  strik- 
ing the  Mississippi  at  ten  and  the  Ohio  at  eight  different  points,  and 
serve  as  trunk  lines  between  the  two  great  hydrographic  systems  of 
the  west.  These  trunk  lines  are  cut  every  few  miles  by  cross  lines, 
which,  in  the  States  east  of  the  Mississippi,  are  sufficiently  numerous 
to  meet  every  public  and  private  want,  and  to  afford  every  needful 
encouragement  to  the  development  of  the  resources  of  this  country. 

The  southern  States  have  been  behind  the  northern  in  their  public 
enterprises,  though,  at  the  date  of  the  census,  they  were  prosecuting 
them  with  great  energy  and  vigor.  The  progress  inland  of  the  great 
trunk  lines  of  the  south  has  been  already  noted.  The  opening  of  the 
Mobile  &  Ohio,  and  of  the  Mississippi  Central,  which  will  soon  take 
place,  will  give  completeness  to  the  system  of  the  southwestern  States, 
and  leave  little  to  be  done  to  make  it  all  that  is  wanted  for  that  section 
of  the  country. 

West  of  the  Mississippi  less  has  been  done,  for  the  reason  that  the 
settlements  there  are  of  a  more  recent  date,  and  the  people  less  able  to 
provide  the  means  for  their  construction  than  those  of  the  older  States. 
But  even  upon  our  western  frontier  extensive  systems  have  been 
undertaken  and  very  considerable  progress  made  in  their  execution. 

A  more  interesting  subject  than  the  progress  of  our  public  works 
would  be  their  results,  as  shown  in  the  increased  commerce  and  wealth 
of  the  country.  But  such  inquiries  do  not  come  within  the  scope 
of  this  report.  It  is  well  ascertained,  however,  that  our  railroads 
transport  in  the  aggregate  at  least  850  tons  of  merchandise  per  annum 
to  the  mile  of  road  in  operation.  Such  a  rate  would  give  26,000,000 
tons  as  the  total  annual  tonnage  of  railroads  for  the  whole  country. 
If  we  estimate  the  value  of  this  tonnage  at  $150  per  ton,  the  aggregate 
value  of  the  whole  would  be  $3,000,000,000.  Vast  as  this  commerce 
is,  more  than  three-quarters  of  it  has  been  created  since  1850. 

IX.  INLAND  WATER  COMMERCE 

Development,    1816-1852  1 

By  the  middle  of  the  century,  the  lake  trade  had  developed  to  large  proportions. 
River  traffic,  although  important,  was  being  gradually  displaced  by  that  of  the 
railroads.  This  movement  has  been  described  as  follows: 


1  Report  on  the  Trade  and  Commerce  of  the  British  North  American  Colonies  and 
upon  the  Trade  of  the  Great  Lakes  and  Rivers.  By  Israel  D.  Andrews  (Washington. 
1853),  55-6,  743-6,  904-6. 


INLAND   COMMERCE  AND   IMPROVEMENTS  407 

In  1816  the  first  steamer  was  built  on  the  waters  of  Lake  Ontario, 
and  the  first  on  Lake  Erie  in  1818.  For  some  considerable  time  the 
first  vessels  put  in  commission  on  Lake  Erie  were  used  merely  for 
facilitating  the  movements  and  operations  of  the  Indian  traders, 
carrying  westward  supplies  and  trinkets  for  the  trade,  and  returning 
with  cargoes  of  furs  and  peltries.  In  1825  the  Erie  canal  was  com- 
pleted, and  its  influence  began  at  once  to  be  felt  through  the  western 
country.  The  western  portion  of  the  State  of  New  York  immedi- 
ately began  to  assume  an  air  of  civilization  and  to  advance  in  com- 
mercial growth.  This  influence  continued  still  to  increase  until  the 
Welland  canal  and  the  Ohio  canals  were  completed.  The  tonnage, 
which  had  then  increased  to  about  20,000  tons,  found  at  this  time  full 
employment  in  carrying  emigrants  and  their  supplies  westward,  which 
continued  to  be  their  principal  trade  till  1835,  when  Ohio  began  to 
export  breadstuff s  and  provisions  to  a  small  extent.  In  1800  Ohio 
had  45,000  inhabitants;  in  1810,  230,760;  in  1820,  581,434;  in  1830, 

937.903- 

During  this  year  a  portion  of  the  canals  was  opened,  and  during 
the  ten  years  next  ensuing  after  1830  some  five  hundred  miles  of  canals 
had  been  completed,  connecting  the  lakes  by  two  lines  with  the  Ohio. 
Under  the  influence  of  these  improvements  the  population  of  the 
State  augmented  to  1,519,467  individuals.  In  1835  she  exported  by 
the  lakes  the  equivalent  of  543,815  bushels  of  wheat.  In  1840  her 
exports  of  the  same  article  over  the  same  waters  were  equivalent  to 
3,800,000  bushels  of  wheat,  being  an  increase,  in  the  space  of  five 
years,  in  the  articles  of  wheat  and  flour,  of  what  is  equal  to  3,300,000 
bushels  of  wheat,  or  nearly  six  hundred  per  centum.  These  articles 
are  selected,  as  being  the  most  bulky,  in  order  to  illustrate  the  effect 
of  canals  upon  lake  commerce.  At  this  period,  1840,  there  were  not 
completed  over  two  hundred  miles  of  railway  in  the  State,  and  this 
distance  was  composed  of  broken  portions  of  roads,  no  entire  route 
existing  as  yet  across  the  length  or  breadth  of  the  State.  In  1850, 
there  were  in  operation  something  over  four  hundred  miles  of  railroad, 
and  rather  a  greater  length  of  canals,  while  the  population  had  in- 
creased to  1,908,408,  and  her  exports,  by  lake,  of  wheat  and  flour, 
were  equivalent  to  5,754,075  bushels  of  wheat,  and  that,  too,  in  spite 
of  the  fact  that  the  crop  of  1849  was  almost  an  absolute  failure  through- 
out the  West. 

In  1851  the  exports  of  wheat  and  flour,  by  lake,  were  equivalent 
to  no  less  than  12,193,202  bushels  of  wheat;  and  the  cost  of  freight 
and  shipping  charges  on  this  amount  of  produce  falls  little,  if  any, 


408 


READINGS  IN  ECONOMIC  HISTORY 


short  of  $510,000;  nearly  the  whole  amount  having  reached  the  lakes 
via  the  canals  and  railways  of  Ohio.  .  .  . 

The  history  of  the  rise  and  progress  of  the  steam-marine  of  the 
United  States  is  one  of  the  most  interesting  and  wonderful  things  in 
our  national  advancement.  Although  one  steamboat  was  built  at 
Pittsburg  as  early  as  the  year  1811,  and  although  eleven  other  boats 
were  built  on  the  Ohio  river  and  its  headwaters  within  the  next  five 
years,  it  was  not  until  the  year  1817  that  steam  navigation  could  be 
said  to  have  been  fairly  introduced  upon  the  Mississippi  and  its  tribu- 
taries. Previous  to  this  year,  there  were  twelve  steamboats  .upon 
these  waters,  having  an  aggregate  carrying  capacity  of  2,235  tons. 
From  1817  to  1834,  the  number  of  boats  increased  to  230,  and  the 
aggregate  of  tonnage  to  39,000  tons.  In  1842  there  were  475  boats 
on  the  same  waters:  in  1851  this  number  had  been  increased  to  601. 

Official  reports  made  to  the  Treasury  Department  in  1842,  stated 
in  detail  the  steamboat  tonnage  on  the  Mississippi  and  its  tributaries 
in  that  year.  The  following*  table  shows  the  increase  from  1842  to 
1851. 

COMPARATIVE   STATEMENT 


Districts 

Tonnage 

1842 

1851 

Increase 

Decrease 

New  Orleans. 

28,153 
14,725 
12,025 
10,107 
4,618 
3,810 
2,595 

34,736 
31,834 
24,709 

16,943 
15,181 
3,578 
7,i9i 
938 
45° 

6,583 

17,109 
12,684 
6,836 
10,563 

232 

Saint  Louis.  ...                  .      . 

Cincinnati.  .  .                

Pittsburg.  .    .          

Louisville     

Nashville  

Wheeling  

4,596 
938 

450 

Vicksburg.  .  .                           

Memphis.  ...        

Total  

76,033 

i35,56o 

59,759 

232 

The  year  following  the  real  commencement  of  regular  steamboat 
navigation  on  the  waters  of  the  Mississippi  and  its  tributaries,  (1817,) 
the  first  steamer  employed  on  the  upper  lakes  was  built  and  launched 
on  Lake  Erie.  In  1819  the  waters  of  Lake  Huron  were  first  ploughed 
by  the  keel  of  a  steamer,  and  in  1826  those  of  Lake  Michigan.  In 
1832  a  steamboat  first  appeared  at  Chicago,  and  in  1833  there  were 


INLAND   COMMERCE  AND  IMPROVEMENTS 


409 


but  eleven  small  steamers  on  the  three  lakes  named.  This  date  may 
therefore  be  fairly  taken  as  that  of  the  real  commencement  of  steam- 
boat navigation  on  the  upper  lakes. 

Ten  years  later  (February,  1843)  a  report  was  made  to  Congress 
of  the  number  and  tonnage  of  steamboats  employed  on  those  waters, 
"from  January  i,  1841,  to  January  i,  1843."  Though  this  is  a  very 
loose  way  of  stating  a  matter  of  this  kind,  and  does  not  give  the  true 
amount  of  the  steam  tonnage  enrolled  and  employed  in  either  one  of 
the  two  years  included  —  necessarily  overstating  it  —  yet  the  facts 
thus  presented  are  used  for  the  purpose  of  comparing  them  with 
those  now  ascertained,  as  showing  correctly  the  steam  tonnage  of  the 
year  which  ended  on  the  3oth  June,  1851. 

COMPARATIVE   STATEMENT 


Tonnage 

i84i-'43 

1851 

Increase 

Buffalo  creek  

6,773 

2^,000 

IQ.2I7 

Presque  Isle   .  . 

2  813 

=;  60  1 

2  8?8 

Cuyahoga.  .                    .        .    .        

i,8« 

6,418 

A    ^63 

Miami.  .              

887 

I.74C 

858 

Detroit  

2,0=;'? 

16,469 

14,416 

Mackinaw  

1,746 

1,746 

Chicago  

652 

652 

Total.  . 

14,381 

58,711 

44..-2-2Q 

These  comparative  statements  show  that  in  a  period  of  nine  years 
the  steamboat  tonnage  of  the  Mississippi  valley  has  nearly  doubled 
itself,  and  that  in  a  period  of  eight  years  that  of  the  upper  lakes  has 
more  than  quadrupled  itself:  very  significant  facts  touching  increase 
of  population,  production,  and  trade. 

The  average  size  of  steamboats  now  running  on  the  lakes  is  found 
to  be  437  tons;  that  of  the  steamboats  of  the  Ohio  basin  2o6f  f  tons; 
and  that  of  those  of  the  lower  and  upper  Mississippi,  the  Arkansas, 
the  Missouri,  and  the  Illinois  rivers,  273-^.  On  the  Mississippi  and 
Ohio  rivers  there  are  many  steamers  of  from  300  to  500  tons  each, 
and  a  number  from  600  to  800  each;  but  the  large  number  of  light- 
draught  boats,  built  to  run  in  periods  of  low  water  on  those  rivers, 
and  in  all  seasons  on  the  smaller  streams  emptying  into  them,  carry 


4io 


READINGS  IN  ECONOMIC  HISTORY 


the  general  averages  down  to  the  figures  given  above.  Several  of 
the  passenger  steamers  of  the  lakes  are  of  eleven  hundred  tons  and 
upwards  each. 

COMPARATIVE  STATEMENT 


Number 

Tonnage 

Northern  lakes  of  the  United  States  

164 

Tons  and  g^ths. 
60  16?     8? 

Mississippi  valley     do  

2M 

67  Q<C7        84. 

Ohio  basin.              do  

348 

67,601     31 

Total  for  interior  of  the  United  States  

76  S 

204,72^     12 

The  cost  of  steamboats  on  the  lakes  and  rivers  of  the  interior, 
varies  from  eighty  to  ninety,  and  from  ninety  to  one  hundred  dollars 
per  ton.  Taking  the  lowest  price,  which  is  that  attainable  in  the 
Ohio  basin,  as  the  standard,  we  have  as  the  original  value  of  the 
204,725^  tons  of  steam  tonnage  engaged  in  the  transportation  of 
passengers  and  the  carrying  trade  on  the  lakes  and  rivers  of  the  United 
States,  for  the  year  ending  June  30,  1851,  an  aggregate  of  sixteen 
million  three  hundred  and  seventy -eight  thousand  dollars;  an  amount 
of  capital  that  goes  entirely  out  of  existence,  and  has  to  be  re-invested 
every  three  and  a  half  to  four  years  —  the  period  of  the  "natural  life" 
of  a  steamboat  on  the  waters  of  the  interior. 

This  fact  indicates  very  clearly  the  immense  extent  of  the  em- 
ployment provided  and  of  the  material  consumed,  in  keeping  up  the 
steam  tonnage  of  the  United  States  to  the  standard  required  by  the 
travel  and  trade  of  the  country.  .  .  . 

The  canal  commerce  of  the  United  States  is  prosecuted  upon  about 
3,000  miles  of  canal,  which,  excluding  the  coal  trade,  cleared  and 
landed  an  average  of  about  6,000  tons  per  mile.  The  New  York  State 
canals  averaged,  in  clearances  and  landings,  about  9,000  tons  per  mile, 
but  this  is  above  the  average  for  all  the  canals.  At  6,000  tons  per  mile, 
3,000  miles  give  18,000,000  tons,  valued  at  $66  the  ton,  and  forming 
a  gross  sum  of  $1,188,000,000. 

There  are  also  completed  in  this  country,  13,315  miles  of  railway; 
but  as  2,500  miles  have  been  opened  since  January  i,  1852,  only 
10,815  miles  can  be  considered  as  having  participated  in  the  trade  of 
1852.  Several  of  the  longest  freight  lines  have  received  and  delivered 
an  aggregate  amounting  to  an  average  of  2,000  tons  per  mile;  but 


INLAND   COMMERCE  AND   IMPROVEMENTS 


411 


as  many  other  lines  do  a  comparatively  light  freighting  business, 
the  average  assumed  will  be  1,000  tons  per  mile,  or  a  gross  business 
of  10,815,000  tons,  which,  from  the  general  character  of  railway 
freight,  as  being  of  a  lighter  and  more  costly  character  than  water 
freight,  may  be  valued  at  $100  the  ton:  this  would  give  an  aggregate 
of  gross  railway  commerce  amounting  to  $1,081,500,000. 

This  is  undoubtedly  a  very  unsatisfactory  way  of  computing  the 
value  of  our  domestic  trade,  but,  until  better  data  can  be  arrived  at, 
the  fairness  of  this  statement  cannot  be  denied;  and  it  is  only  put 
forth  as  the  nearest  approximation  that  can  be  made  to  accuracy, 
under  our  present  system  of  internal  trade  returns,  in  the  hope  that 
the  startling  results  here  obtained  may  arouse  those  interested  in 
this  important  trade  to  a  full  investigation  of  the  subject  by  the  col- 
lection of  authentic  data. 

It  has  been  customary  heretofore,  in  making  up  these  or  similar 
estimates,  to  call  the  net  money-value  of  property  one-half  the  gross 
amount.  Though  this  process  may  correctly  denote  the  number  of 
tons  transported,  it  will  by  no  means  decide  that  the  same  property 
has  not  entered  and  re-entered,  several  times,  into  the  general 
account,  as  it  moved  from  point  to  point  in  search  of  a  consumer. 
For  convenience,  however,  the  following  tabular  statements,  showing 
the  gross  and  net  tons  and  value,  are  presented: 


NET 

G 

ROSS 

Tons 

Value 

Tons 

Value 

Lake  commerce.  . 

1,985,563 

$157,236,729 

3,971,126 

$314,473,458 

River  commerce  

2,033,400 

169,751,372 

4,066,800 

Aggregate  

4,018,963 

326,988,101 

8,037,926 

653,976,202 

This  commerce  and  its  necessities  have  occasioned  the  construction 
in  the  United  States  of  nearly  twenty  thousand  miles  of  magnetic 
telegraph,  at  a  cost  of  little  less  than  $6,000,000. 

Comment  upon  such  facts  as  are  here  presented,  will  readily  sug- 
gest themselves  to  the  minds  of  all  intelligent  men.  It  will  be  seen 
that  our  domestic  commerce  is  of  incalculable  value  to  us,  even  as 
represented  by  the  "coasting"  trade;  but  when  to  this  is  added  the 
value  of  our  whale,  cod,  and  mackerel  fisheries,  and  our  California 
trade,  that  is  carried  on  in  registered  bottoms,  its  magnitude  will 


4i2  READINGS  IN  ECONOMIC  HISTORY 

be  still  more  astonishing.  The  fact  that  our  domestic  exchanges 
amount,  by  sale  and  resale  and  by  the  additional  value  gained  by  the 
labor  bestowed  in  transportation,  sale,  &c.,  annually  to  over  five 
thousand  million  dollars,  as  the  sum  upon  which  one  commission  or 
profit  is  paid,  and  that  in  this  trade  is  employed  actively  and  profit- 
ably over  two  million  tons  of  shipping,  which  cost  not  less  than  one 
hundred  and  twenty  million  dollars,  three  thousand  miles  of  canal, 
thirteen  thousand  miles  of  railway,  and  twenty  thousand  miles  of 
telegraph,  costing  about  four  hundred  and  fifty  million  dollars,  is  one 
calculated  not  only  to  astonish,  but  to  excite  admiration  of  the  energy, 
industry,  and  enterprise  which,  in  so  short  a  period,  have  achieved 
this  high  position. 


CHAPTER   XIII 
FOREIGN  COMMERCE,   1800-1860 

I.   FOREIGN  COMMERCE  PRIOR  TO  1860 
A.  Character  and  Extent  of  Foreign  Commerce,  i8oo-i86ol 

During  the  sixty  years  from  1800  to  1860  the  value  of  the  export  trade  of  the 
United  States  increased  more  than  sixfold,  from  less  than  $50,000,000  to  almost 
$300,000,000  annually.  During  the  same  period  the  value  of  the  imports  increased 
from  less  than  $60,000,000  to  more  than  $300,000,000  annually.  The  most  im- 
portant articles  of  export  were  cotton,  tobacco,  rice,  flour  and  provisions.  Of 
these  exports,  Great  Britain  took  more  than  any  other  country.  A  view  of  the 
commerce  of  this  period  is  given  by  Mr.  Kettell  as  follows: 

The  imports  rose  steadily  to  over  $300,000,000  in  1854,  under  the 
first  Australian  and  Californian  excitement,  and  took  larger  dimen- 
sions as  the  railroad  operations  progressed.  Railroad  iron  figures 
largely  in  the  amount  in  exchange  for  bonds.  The  imports  of  silks 
rose  from  $13,731,000,  in  1850,  to  $30,636,000.  The  most  remarkable 
rise  in  the  importation  was,  however,  in  sugar,  which,  from  $i  1,000,000, 
rose  to  nearly  $55,000,000,  in  1857,  in  consequence  of  the  failure  of 
the  Louisiana  crop,  at  a  moment  of  very  active  demand.  So  high  a 
figure  to  be  paid  for  sugar  at  a  critical  moment  wrent  far  to  disturb 
the  exchanges,  and  aid  the  panic  of  1857.  We  find  that  the  whole 
amount  of  importations  for  the  ten  years  reached  $3,004,591,285, 
exceeding,  by  $1,736,807,503,  the  importations  of  the  previous  ten 
years.  This  excess  of  expenditure  corresponds  with  the  estimated 
amount  of  capital  expended  for  extraordinary  purposes,  since  a  con- 
siderable portion  of  the  expenditures  was  applied  to  domestic  manu- 
factures. The  operation  of  the  treaty  with  Canada  produced  a 
somewhat  larger  receipt  of  foreign  goods.  These  also  swelled  propor- 
tionately the  aggregate  imports.  The  excitement  manifest  in  the 
United  States  in  regard  to  gold  and  railroads,  was  also  present  in  Eng- 
land and  Europe.  The  production  of  manufactured  wares  to  send 
to  the  gold  countries,  and  to  avail  of  the  local  demand  for  goods, 
required  more,  raw  material,  at  a  moment  when  the  short  harvests 
and  war  enterprise  enhanced  general  wants.  The  effect  of  these  was 

1  Eighty  Years'  Progress.     By  Thomas  P.  Kettell  (Hartford,  1869),  156-9- 


414 


READINGS  IN  ECONOMIC  HISTORY 


equivalent  to  a  large  transfer  of  capital  to  the  west,  not  only  from 
Europe,  but  also  from  those  eastern  states  that  are  usually  buyers 
of  food.  Thus  the  wheat  crop  of  the  United  States  in  1850,  by  census, 
was  equal  to  22,000,000  bbls.  of  flour.  The  average  export  price  in 
that  year  was  $5,  giving  to  the  crop  a  value  of  $110,000,000.  In 
1855,  the  average  price  was  $10,  giving  a  value  of  $110,000,000  greater. 
This  sum  was  taken  out  of  the  pockets  of  the  food  buyers,  to  the  profit 
of  the  food  sellers,  at  the  moment  when  the  latter  were  enjoying  so 
large  an  expenditure  for  other  purposes.  The  export  value  of  agri- 
culture rose  from  $24,309,210,  in  1850,  to  $77,686,455,  in  1856.  The 
great  activity  of  the  years  ending  with  1857  was,  then,  due  to  heavy 
expenditure  of  capital  at  the  west  simultaneously  with  profitable 
sales  of  its  crops.  .  .  . 

If  we  bring  together  by  recapitulation  the  aggregate  of  the  seven 
decades  since  the  formation  of  the  government,  we  shall  have  a  very 
interesting  synopsis  of  the  national  progress  in  respect  of  commerce, 
...  as  follows: 

EXPORTS   FOR  PERIODS  OF  TEN  YEARS 


Year 

Domestic 

Foreign 

Total 

1800.  ... 

$20'?  634  64.=; 

$IOI    34.4.  2O3 

$484  968,938 

1810.  ...          .                  .... 

383,401  O77 

1,12   N36  204. 

7cc,O37,37l 

1820.  ...              

462,701,288 

127,100,714. 

589,892,002 

1830.  ...          

536,104,018 

220,64.3,8^4. 

76^,748,7^2 

184.0.  . 

802,880,000 

100,4^1,004 

I,O02,  3?I,OO3 

1850.  . 

1,131,458,801 

129,105,782 

1,260,564,583 

1860  

2,766,799,881 

226,0^0,036 

2,003,740,017 

$6,466,990,519 

$1,476,222,947 

$7,943,203,466 

Year 

Imports 

Manufactures, 
Annual  Value 

Agriculture, 
Annual  Value 

1800  

$^01  84=;  4^4 

1810  

Q27,663,sOO 

14.;  i8z  006 

1820  

688,120,347 

62,766,385 

1830.  . 

798,633,427 

111,645,466 

1840.  .  .  . 

I.3O2  4?6  084 

483  278  21  =; 

$621  163  977 

18^0.  . 

1,267,783  782 

i  ON^  ^QS  800 

OO4  OO3  842 

1860  

3,OO4,!;QI,28t; 

2  OOO  OOO  OOO 

i  910  000,000 

$8,581,113,879 

FOREIGN   COMMERCE  415 

This  table,  mostly  official,  gives  the  extraordinary  results  of  a 
nation's  industry  and  commerce  in  a  period  of  seventy  years.  The 
growth  has  such  an  accumulative  force,  as  to  be  very  surprising.  In 
the  item  of  re-exports  of  foreign  goods,  the  trade  never  recovered 
the  figures  they  touched  at  the  period  when  American  vessels  did  the 
carrying  trade  for  fighting  Europe.  Latterly,  however,  under  the 
warehouse  system  of  the  United  States,  and  the  reciprocity  treaty  with 
the  British  provinces,  some  increase  in  that  respect  has  taken  place, 
the  more  so  that  steam  and  extended  relations  are  opening  to  the 
United  States  a  larger  share  of  the  South  American  trade,  tending 
ultimately  to  give  the  United  States  the  preponderating  influence. 
The  exports  of  domestic  goods  grow  rapidly  under  the  more  extended 
demand  for  cotton  throughout  the  world,  and  of  which  the  United 
States  is  the  only  source  of  supply.  All  other  cotton  countries,  India 
particularly,  require  more  cotton  in  the  shape  of  goods  than  they 
supply  in  the  raw  state.  The  demand  for  cotton  clothing  increases 
in  the  double  ratio  of  greater  numbers  and  greater  wealth  throughout 
the  world.  Cotton  is,  however,  not  the  only  article  which  increases 
in  export  value.  The  tables  show  us  that  gold  has  figured  in  ten  years 
for  $507,000,000  as  an  article  of  export,  and  will  probably  never  be 
less.  The  agricultural  resources  of  this  country  have  just  begun  to 
be  developed.  Up  to  1842  there  was,  under  the  restrictive  systems 
of  Europe,  comparatively  no  market  for  American  farm  produce.  In 
that  year  the  statesmen  of  England  recognized  the  fact  that  the 
demands  of  English  work  people  for  food  had  outgrown  the  ability 
of  the  British  islands  to  supply  it  on  terms  as  low  as  it  could  be  bought 
elsewhere.  They  therefore  removed  the  prohibition  upon  the  import 
of  cattle  and  provisions,  and  reduced  the  duty  on  grain.  This  opened 
a  market  for  American  produce,  which  grew  rapidly.  The  circum- 
stances of  the  famine  of  1846  justified  the  wisdom  of  the  English  gov- 
ernment, and  led  to  the  entire  removal  of  the  corn  duties  in  1849. 
That  example  was  followed  by  France  and  her  neighbors.  France, 
however,  restored  the  duties  in  1859.  The  liberal  legislation  of  Eng- 
land, the  famine,  the  wars,  and  speculations  of  Europe,  have 
gradually  extended  the  demand  for  American  produce,  at  the  time 
when  a  very  broad  field  had  been  opened  to  supply  that  demand.  This 
we  may  illustrate.  The  area  of  Great  Britain's  industry  —  hills,  lakes, 
vales,  and  valleys  —  is  53,760,000  acres;  and  the  population  in  1812, 
when  she  made  war  on  us,  was  1 1 ,991 ,107.  Now  we  find  from  the  table 
of  land  sales,  elsewhere  given,  that. the  federal  government  has  sold  in 
the  last  twenty  years  selected  farm  lands  to  the  extent  of  68,655,203 


416 


READINGS  IN  ECONOMIC  HISTORY 


acres,  and  has  given  to  railroads  42,000,000  acres  more  of  selected 
lands,  making  1 10,000,000  acres  that  have  mostly  passed  into  the  hands 
of  settlers.  This  is  a  surface  double  the  whole  area  of  Great  Britain; 
and  the  population  on  that  area  has  increased,  in  the  same  time,  n,- 
374,595,  or  a  number  nearly  as  large  as  that  of  Great  Britain  in  1812. 
There  have  been  built  on  that  area  in  the  last  ten  years,  and  are  now 
in  operation,  20,000  miles  of  railroads,  crossing  every  part  of  it,  and 
bringing  every  farm  within  reach  of  a  market.  The  speculators  and 
road  builders,  who  ate  up  the  produce  of  that  area,  during  the  process 
of  road  construction,  have  vanished,  and  the  whole  is  now  offered  by 
a  hundred  channels  to  the  best  bidders  of  Europe.  We  have  said  that 
corn  is  the  settler's  capital,  and  that  corn,  in  the  shape  of  grain,  pork, 
and  whiskey,  is  the  staple  export  of  a  new  country.  The  corn  prod- 
uct of  1855,  per  state  reports,  was  600,000,000  bushels.  The  number 
of  hogs  packed  that  year  was  2,489,050,  averaging  200  Ibs.  each,  and 
giving  a  total  weight  of  497,900,000  Ibs.  of  pork.  In  that  year  the 
weight  of  pork  exported  was  164,374,681  Ibs.  Of  this  amount,  58,- 
526,683  Ibs.  went  to  England,  or  12  per  cent,  of  the  whole  production, 
as  the  result  of  her  more  liberal  policy  of  1842. 

QUANTITIES  OF  CORN  AND  PORK  EXPORTED  TO  GREAT  BRITAIN 


Pork, 
barrels 

Hams  and 
Bacon,  Ibs. 

Lard, 
Ibs. 

Corn, 
bushels 

Wheat, 
bushels 

Flour, 
barrels 

1840    .  .  . 

i  06  1 

104,341 

6l  :;,Q72 

620,010 

1841.  . 

4,760 

26,394 

444,305 

12,548 

119,854 

208,984 

1842.  .  . 

6,000 

160,274 

3,430,732 

123,665 

143,300 

208,024 

1847  

73,940 

14,367,105 

17,798,770 

15,526,525 

4,399,951 

2,457,076 

1848  

87,760 

29,218,462 

27,283,741 

5,062,220 

2,034,704 

958,744 

1840.  .  . 

1  1  1,  38"; 

?3,i  ^0,46=; 

21,388,2615 

12,392,242 

608,661 

953,815 

18^... 

64,663 

30,240,161 

I  ^,^40,022 

5,935,284 

8,036,665 

2,026,121 

1858... 

13,  =578 

ic,  36s;,  5-24 

10,288,474 

3,215,198 

8,926,196 

3,512,169 

The  cotton,  tobacco,  and  rice  of  the  south,  the  farm  produce  of 
the  west,  and  the  gold  of  California,  each  contributed  an  increasing 
proportion  to  the  general  exports;  but  manufacturers  have  also  come 
to  figure  largely  in  the  general  aggregate. 

The  following  table  gives  the  proportions  in  which  the  general 
heads  of  exports  have  contributed  from  time  to  time  to  the  result, 
since  the  formation  of  the  government;  and  also  the  total  exports, 
including  all  articles. 


FOREIGN  COMMERCE 
HEADS  OF  EXPORTS 


417 


Cotton 

Tobacco 
and 
Rice 

Flour 
and 
Provisions 

Manu- 
factures 

United 
States 
Specie 

Total  of  all 
Domestic 
Exports 

I7OO    . 

$42,285 

$6,103,363 

85,991,171 

$19,666,000 

1803 

7  920  ooo 

8,664,000 

i  ^,0-0,000 

$2  ooo  ooo 

42  2Os  061 

1807.  .  . 

14,232,000 

7,783,000 

15,706,000 

2,300,000 

48,699,592 

1816 

24,106,000 

15,187,880 

20,587,376 

2  331  OOO 

64,781,896 

1821  

20,157,484 

7,143,349 

12,341,360 

2,752,631 

810,478,059 

43,671,894 

1831  ... 

31,724,682 

6,908,655 

12,424,701 

5  086  890 

0,014,031 

61,277,057 

1836  

71,284,925 

12,607,390 

9,588,359 

6  107  528 

345,738 

106,916,680 

1842.  .  . 

47,1:07,464 

11,448,142 

16,902,876 

7,102,101 

11,720,77 

92,969,996 

1847.  .  . 

53,415,848 

10,848,982 

68,701,921 

io,3s;i  ,364 

2,620 

150,637,464 

i8<;i.  . 

112,315,317 

11,390,148 

21  948,651 

20,136,967 

18,069,580 

196,689,718 

1854 

03,^06,220 

12,182,204 

65,941,323 

26  849  411 

38,234066 

2s  3,  390,  870 

iS^Q 

161,424,923 

23,281,186 

37,987,395 

32  471,027 

60,110,000 

335,894,385 

These  general  heads  represent  all  parts  of  the  Union  —  cotton  and 
tobacco  in  the  south,  flour  and  provisions  in  the  west,  manufactures 
in  the  east,  and  gold  in  the  Pacific  States.  It  is  difficult  to  see  any 
great  difference  in  the  prosperity  which  may  attend  each  in  the  future. 
The  south  is  most  secure  in  its  market,  holding,  as  it  does,  an  abso- 
lute monopoly  of  a  raw  material,  which  is  indispensable  to  the  indus- 
try of  5,000,000  people  at  home  and  abroad,  without  which  $500,000,- 
ooo  employed  in  manufactures  would  be  valueless,  and  without 
which  a  large  portion  of  the  clothing  of  civilized  men  would  fall  short. 
The  peril  of  this  position  to  manufacturers,  operatives,  and  mer- 
chants is  apparent  to  statesmen,  and  the  utmost  efforts  are  vainly 
made  to  find  a  remedy.  The  greater  the  exertion  used,  the  more 
dependent  are  the  manufacturers  on  the  south.  India  was  long  the 
hope  of  England,  but  there  are  120,000,000  persons  in  India  whose 
scanty  hand-spun  clothing  is  composed  of  cotton.  Every  effort  to 
improve  their  condition,  and  to  induce  a  larger  culture  of  cotton, 
has  but  one  result  —  viz. :  to  create  a  larger  demand  for  cotton  ma- 
chine clothing  from  them;  and  the  dependence  upon  the  United 
States  is  the  greater.  The  import  of  cotton  from  India  has  been  the 
cry  for  thirty  years.  What  is  the  result?  English  official  returns 
give  the  following  figures  for  1859:  — 

Ibs. 

Import  of  raw  cotton  from  India,  1859 192,330,880 

Export  of  cotton  goods  to  India,  1859 193,603,270 

Excess  of  cotton  sent  to  India 1,272,390 


4i 8  READINGS  IN  ECONOMIC  HISTORY 

The  field  for  the  extension  of  the  machine  goods  in  China  and 
India  is  limited  only  by  the  means  of  the  people  to  buy.  The  more 
those  means  are  increased,  the  greater  is  the  demand  for  the  raw  ma- 
terial; and  the  value  of  cotton  rises  annually  on  that  basis.  The 
productions  of  the  west  are  more  exposed  to  rivalry  than  those  of 
the  south;  but  since  the  formation  of  the  present  government,  Eng- 
land and  western  Europe,  from  being  large  food  exporters,  have  come, 
by  the  growth  of  manufactures,  to  be  large  food  importers,  and  their 
supplies  are  drawn  more  steadily  from  eastern  Europe.  Those  re- 
sources are  coming  to  be  narrowed,  for  the  same  reason.  The  United 
States,  on  the  other  hand,  with  their  immense  plains  and  growing 
mean  of  communication,  are  assuming  a  more  regular  position  as  a 
source  of  supply,  which  will  annually  swell  the  exports.  The  column 
of  manufactures  is  a  gratifying  evidence  that  the  colonial  position  is 
at  last  overcome;  that  the  requisite  skill  and  capital  for  manufacturing 
against  all  rivalry  are  at  last  acquired,  and  that  American  industry 
now  finds  sale  in  the  markets  of  the  world.  The  South  American 
countries  offer  the  legitimate  opening  for  that  sale.  The  gold  of 
California  is  always  a  merchantable  commodity,  and  must  sell  under 
all  circumstances.  .  .  . 

B.     Commerce  and  Legislation,  i8o6-i8^4l 

The  foreign  commerce  of  any  country  depends  largely  on  the  encouragement 
it  receives  at  the  hands  of  the  lawmakers  both  in  its  own  and  in  foreign  countries. 
Thus  the  hostile  legislation  of  Great  Britain  by  Orders  in  Council  and  of  Napoleon 
by  his  Decrees,  tended  to  decrease  the  commerce  of  the  United  States  early  in  the 
century.  On  the  other  hand,  commercial  treaties  entered  into  by  this  country 
with  foreign  nations  stimulated  the  growth  of  the  commerce  and  trade  of  the 
United  States. 

On  the  conquest  of  Prussia,  in  1806,  Bonaparte  conceived  the 
idea  of  crushing  the  maritime  power  of  Britain,  by  prohibiting  all  the 
world,  in  his  famous  Berlin  Decree,  from  conducting  any  trade  with 
her  or  her  numerous  dependencies.  The  retaliatory  British  Orders 
in  Council  followed  at  once,  and  all  countries  in  the  world  connected 
in  any  way  with  France,  or  opposed  to  England,  were  declared  to  be 
under  precisely  the  same  restraints  as  if  actually  invested  in  strict 
blockade  by  British  forces.  Incensed  by  so  unexpected  and  ruinous 
a  measure,  Napoleon  issued  the  memorable  Milan  Decree,  making 


1  An  Historical  and  Statistical  Account  of  the  Foreign  Commerce  of  the  United 
States.     By  J.  Smith  Romans  (New  York,  1857),  61-3. 


FOREIGN   COMMERCE  419 

lawful  prize  of  all  vessels  submitting  at  any  time  or  in  any  way  to 
British  search  or  taxation.  It  was  natural  that  these  illegal  and  un- 
authorized proceedings  should  excite  the  utmost  interest  and  concern 
of  the  United  States  so  materially  and  even  vitally  affected  by  them. 
We  protested  in  vain.  The  administration  recommended  as  the  sole 
remaining  alternative  of  peace  an  embargo,  which  Congress  adopted 
in  1807.  This  measure  the  commercial  interests  warmly  opposed  as 
ruinous  to  them,  and  memorials  were  forwarded  from  many  quarters 
praying  for  its  repeal.  To  these  it  was  replied  by  government,  "The 
embargo,  by  teaching  foreign  nations  the  value  of  American  commerce 
and  productions,  will  inspire  them  with  a  disposition  to  practice  jus- 
tice. They  depend  upon  this  country  for  articles  of  first  necessity, 
and  for  raw  materials  to  supply  their  manufactures."  Such  a  view 
of  the  matter,  however,  did  not  occur  to  the  mind  of  Napoleon,  who 
regarded  the  embargo  as  greatly  favorable  to  France,  and  aiding  him 
in  his  warfare  against  English  commerce.  "To  submit,"  said  he  to 
Mr.  Livingston,  "to  pay  England  the  tribute  she  demands,  would  be 
for  America  to  aid  her  against  him,  and  a  just  ground  of  war." 

In  1809,  a  non-intercourse  with  Britain  and  France  was  substi- 
tuted for  the  embargo,  which  the  latter  power  regarded  as  such  an 
evidence  of  hostility  as  to  justify  her  in  proceeding  at  once  to  con- 
demn millions  of  American  property  as  lawful  prize. 

The  Congress  of  1810  determined  upon  the  admission  of  the  com- 
mercial vessels  of  the  powers  above-named,  if  the  act  were  preceded 
by  a  revocation  of  their  hostile  and  arrogant  decrees.  The  French 
government  pretended  to  close  in  at  once  with  the  proposal,  but  it 
was  nearly  one  year  later  before  her  repealing  ordinance  was  officially 
promulgated,  evidencing  a  disposition  on  the  part  of  Napoleon  to  play 
with  us  in  bad  faith,  and  to  turn  the  game  at  any  time  to  his  advan- 
tage —  so  humiliating  to  our  pride  are  the  events  of  this  entire  era. 
With  England  it  was  long  doubtful  what  relationship  we  might  expect 
to  sustain.  Hostile  and  peaceable  alternately,  according  to  her  ca- 
prices or  her  interests,  she  had  provoked  in  American  minds  a  resent- 
ment too  deep  to  be  subdued,  and  forbearance  longer  was  regarded  a 
crime.  The  Orders  of  Council  remaining  in  force,  and  the  aggres- 
sions increasing  daily,  a  non-intercourse  act  of  sixty  days  was  resorted 
to,  the  prelude  only  to  a  solemn  declaration  of  war.  Then  was  the 
hour  of  severe  retribution,  and  then  was  the  national  honor  and  dig- 
nity of  America  triumphantly  vindicated! 

Commerce  of  the  United  States  since  1812.  — This  has  been  an  era 
of  prosperity  and  rapid  advance,  and  the  great  powers  of  the  civilized 


420  READINGS  IN  ECONOMIC  HISTORY 

world  seem  to  have  realized  for  once  the  rich  benefits  of  a  prolonged 
armistice,  or,  if  another  expression  be  preferred,  a  protracted,  and  we 
hope  permanent  peace.  In  commercial  rank,  the  United  States  of 
America,  subordinate  to  Britain  only,  and  having  outstripped  all  the 
world  else,  is  prepared  to  share  a  divided  scepter,  until  that  scepter 
can  be  wielded  alone  by  her  hand,  and  the  empire  of  the  seas  be  trans- 
ferred to  her  keeping. 

." .  .  The  period  [1812-1854]  has  been  celebrated  by  an  approach 
to  a  more  liberal  internationality,  and  a  reciprocity  something  else 
than  in  name.  The  progress  in  the  last  ten  years  has  been  most 
strongly  marked  toward  that  ultimatum,  in  the  minds  of  every  lover 
of  truth  and  human  advancement,  perceived  first  by  Lord  Bacon, 
and  ably,  though  imperfectly,  presented  by  his  followers:  commerce 
unfettered  as  the  winds  that  waft  it;  free  religion,  free  government, 
free  press,  free  traffic  —  freedom  everywhere,  and  in  every  righteous 
thing  throughout  all  the  world!  When  shall  nations  sacrifice  their 
foolish  jealousies,  and  meet  each  other  on  this  high,  broad,  and  Chris- 
tian ground?  We  are  no  partisan  here,  but  a  cosmopolite.  We 
advocate  a  policy  as  wide  as  the  earth,  and  as  generous.  No  single 
nation  can  afford  to  act  alone;  the  movement,  if  made  at  all,  must 
be  universal. 

The  condition  of  Europe  now,  however,  argues  little  for  the  early 
triumph  of  those  principles  to  which  we  have  been  referring.  The 
latest  British,  French,  and  Austrian  tariffs  have  been  less  restrictive, 
and  in  the  case  of  the  first-named  nation  her  policy  would  appear 
about  to  be  radically  changed.  The  German  States  maintain  the 
exclusive  policy,  as  do  also  the  Spaniards  and  Portuguese.  Russia 
was  the  latest  in  adopting  the  restrictive  system,  but  we  see  by  her 
last  tariff  some  evidences  of  improvement,  which  neither  Sweden  nor 
Denmark  furnishes.  The  duties  of  the  Italian  States  have  been  gen- 
erally moderate,  except  for  Rome  and  Naples,  and  we  recognize  a 
great  improvement  in  these  in  the  tariff  of  his  Holiness  the  Pope. 
The  commercial  system  of  Holland  is  the  most  liberal  in  all  Europe, 
but  the  South  American  States  appear  to  be  governed  by  the  same 
spirit  as  that  which  dictated  the  policy  of  Spain. 

In  1824,  Great  Britain  seemed  desirous  of  removing  in  some  degree 
her  restriction  upon  the  navigation  of  other  powers.  She  entered 
into  reciprocity  treaties  with  many  of  them,  and  in  this  was  soon 
after  imitated  by  the  United  States,  in  the  treaties  of  1825-6-8-9 
with  Central  America,  Denmark,  Sweden,  Hanse  Towns,  Prussia, 
Brazil,  Austria,  Hungary  and  Bohemia,  Mexico,  Russia,  Venezuela, 


FOREIGN   COMMERCE 


421 


Greece,  Sardinia,  Netherlands,  Hanover,  and  Portugal.  We  also 
entered  into  similar  but  limited  reciprocity  treaties  with  France  in 
1822,  continued  afterward,  and  with  England  in  1821,  1825,  and  1833, 
and  a  full  reciprocity  treaty  with  Canada  in  1854.  These  treaties  were 
arranged  by  Mr.  Kennedy,  chairman  of  the  Committee  of  Commerce, 
into  three  classes. 

1.  Those  securing  mutual  privileges  of  export  and  import  of 
produce,  the  growth,  produce,  or  manufacture  of  the  stipulating  pow- 
ers,  transported   in   their   own   vessels,   without   discrimination  on 
tonnage. 

2.  Those  providing  for  a  levy  of  duties  not  less  favorable  upon 
the  tonnage  of  either  than  are  levied  upon   the  tonnage  of  other 
powers. 

3.  Those  requiring  equality  of  port  charges.  .  .  . 


II.    FOREIGN  COMMERCE  OF  THE  NORTH  AND  SOUTH  COMPARED 

A.     Predominance  of  the  South  in  the  Export  Trade,  1800-1850 l 

The  value  of  agricultural  exports  from  the  two  sections  of  the  country  from 
1800  to  1850  were  as  follows: 

Statement  in  millions  of  dollars,  of  the  value  of  the  produce  of  the 
Southern  slave  States  (those  below  the  35th  degree  of  latitude)  and 
the  value  of  the  produce  of  the  free  States  and  of  the  Northern  slave 
States,  exported  annually  on  an  average  from  the  United  States,  dur- 
ing the  undermentioned  years,  and  the  amount  to  each  person. 


Southern  Slave  States. 

Free  States  &  N.  Slave  States 

1800  to  1807.  .  . 

$9     mill] 

23* 

33 
66 

53 
Si* 
7i| 

ons,  $16  to  e 
iQ 
17 
26 

iQ 

17 
18 

ach. 

$30  millic 
23* 

3°3 

36 
45 
48£ 
64 

ns,     $6    to  e 
2f 
2f 
2§ 

3 
3 

?i 

3i 

ach. 

1820  to  1824  

1830  to  1833  

1835  to  1840   .  . 

1841  to  1842  

1844  to  1846  

1849  to  1850  

What  a  flattering  prospect  for  the  future,  the  foregoing  tables 
present  to  the  producers  of  flour,  wheat,  Indian  corn,  tobacco,  lumber, 

1  Essays  on  the  Progress  of  Nations.     By  Ezra  C.  Seaman  (New  York,  1852), 
390-1. 


422  READINGS  IN  ECONOMIC  HISTORY 

pork,  beef,  butter,  cheese,  and  other  provisions,  in  case  they  depend 
upon  foreign  markets  for  the  sale  of  their  products,  to  enable  them 
to  pay  for,  and  clothe  themselves  with,  British  and  French  goods. 
It  should  be  borne  in  mind  also,  that  more  than  half  of  the  exports 
of  the  free  States,  are  to  the  West  Indies,  Brazil  and  other  parts  of 
South  America,  to  pay  for  sugar,  coffee,  spices,  tropical  fruits  and 
hides.  The  West  Indies  and  Brazil,  furnish  a  constant  and  regular 
demand  and  steady  markets  for  the  products  of  the  free  and  northern 
slave  states,  while  the  markets  of  Europe  are  very  uncertain,  and  not 
to  be  depended  upon.  The  whole  commerce  of  the  United  States 
with  the  West  India  Islands,  and  with  the  American  continent  and  all 
its  islands,  is  advantageous,  the  balance  of  trade  being  slightly  in 
favor  of  our  country,  which  is  paid  in  coin,  amounting  on  an  average 
to  four  or  five  millions  a  year,  the  greater  part  of  which  is  exported 
to  the  old  world,  to  pay  the  balance  of  trade  against  us. 

The  products  of  the  free  and  northern  Slave  States  exported  to  the 
West  Indies,  and  to  the  American  Continent  and  its  islands,  amounted 
in  1844  to  over  twenty-three  millions  of  dollars,  and  in  1850  to  about 
twenty-eight  millions  of  dollars;  in  payment  for  which  we  received 
some  coin,  and  many  articles  of  prime  necessity,  some  of  which  can- 
not be  produced  in  the  United  States,  and  others  cannot  be  produced 
in  sufficient  quantities,  for  the  consumption  of  the  country. 

The  imports  into  the  United  States  from  the  old  world,  which 
were  retained  for  consumption  (consisting  mostly  of  manufactured 
products)  cost  in  1844,  about  seventy  millions  of  dollars,  and  in  1850 
about  one  hundred  and  thirty  millions,  about  five  sixths  of  which  were 
consumed  in  the  free  and  the  northern  slave  states,  while  the  domestic 
products  of  those  states,  taken  by  the  old  world  in  payment,  amounted 
to  only  about  twenty-eight  millions  of  dollars  in  1844,  and  thirty 
millions  in  1850.  It  is  easy  to  see  that  such  a  commerce  is  very  dis- 
advantageous to  the  northern  states,  as  it  makes  them  not  only  depen- 
dent upon,  and  tributary  to  the  manufacturing  nations  of  Europe, 
and  involves  them  in  debt,  but  it  also  makes  them  dependent  upon, 
and  tributary  to  the  cotton  planting  states  of  the  south,  for  cotton 
as  an  article  of  export,  to  pay  their  debts  to  foreign  manufacturers. 

B.    Small  Import  Trade  of  the  South  in  1^55 1 

Although  the  south  furnished  the  most  important  articles  of  export,  that  section 
imported  little  directly  from  foreign  nations.  The  money  received  for  cotton, 

1  Thirty  Years'  View.     By  Thomas  H.  Benton  (New  York,  1854-6),  II,  131-3. 


FOREIGN    COMMERCE  423 

tobacco,  and  other  crops  was  largely  spent  in  the  north  for  domestic  manufactures 
or  for  foreign  goods  brought  through  northern  ports.  Senator  Benton's  views  on 
the  subject  were  as  follows: 

It  [a.  convention  called  by  the  southern  states]  met  at  Augusta, 
Georgia,  and  afterwards  at  Charleston,  South  Carolina;  and  the  evil 
complained  of  and  the  remedy  proposed  were  strongly  set  forth  in  the 
proceedings  of  the  body,  and  in  addresses  to  the  people  of  the  Southern 
and  Southwestern  States.  The  changed  relative  condition  of  the  two 
sections  of  the  country,  before  and  since  the  Union,  was  shown  in  their 
general  relative  depression  or  prosperity  since  that  event,  and  espe- 
cially in  the  reversed  condition  of  their  respective  foreign  import  trade. 
In  the  colonial  condition  the  comparison  was  wholly  in  favor  of  the 
South;  under  the  Union  wholly  against  it.  Thus,  in  the  year  1760 
—  only  sixteen  years  before  the  Declaration  of  Independence  —  the 
foreign  imports  into  Virginia  were  850,000  sterling,  and  into  South 
Carolina  555,000;  while  into  New  York  they  were  only  189,000,  into 
Pennsylvania  490,000;  and  into  all  the  New  England  Colonies  col- 
lectively only  561,000. 

These  figures  exhibit  an  immense  superiority  of  commercial  pros- 
perity on  the  side  of  the  South  in  its  colonial  state,  sadly  contrasting 
with  another  set  of  figures  exhibited  by  the  convention  to  show  its 
relative  condition  within  a  few  years  after  the  Union.  Thus,  in  the 
year  1821,  the  imports  into  New  York  had  risen  to  $23,000,000  — 
being  about  seventy  times  its  colonial  import  at  about  an  equal  period 
before  the  adoption  of  the  constitution;  and  those  of  South  Carolina 
stood  at  $3,000,000  —  which,  for  all  practical  purposes,  may  be  con- 
sidered the  same  that  they  were  in  1760.  .  .  . 

The  conventions  of  August  and  Charleston  proposed  their  remedy 
for  the  Southern  depression,  and  the  comparative  decay  of  which  they 
complained.  It  was  a  fair  and  patriotic  remedy  —  that  of  becoming 
their  own  exporters,  and  opening  a  direct  trade  in  their  own  staples 
between  Southern  and  foreign  ports.  It  was  recommended  —  at- 
tempted —  failed.  Superior  advantages  of  navigation  in  the  North  — 
greater  aptitude  of  its  people  for  commerce  — established  course  of 
business  : —  accumulated  capital  —  continued  unequal  legislation  in 
Congress;  and  increasing  expenditures  of  the  government,  chiefly 
disbursed  in  the  North,  and  defect  of  seamen  in  the  South  (for  mari- 
ners cannot  be  made  of  slaves),  all  combined  to  retain  the  foreign  trade 
in  the  channel  which  had  absorbed  it;  and  the  still  faster  increasing 
extravagance  and  profusion  of  the  government.  And  now,  at  this 
period  (1855),  the  foreign  imports  at  New  York  are  $195,000,000;  at 


424  READINGS  IN  ECONOMIC  HISTORY 

Boston,   $58,000,000;    in   Virginia   $1,250,000;    in   South    Carolina 
$1,750,000.  .  .  . 


III.    MOVEMENT  OF  FOREIGN  COMMERCE 

Balance  of  Trade,   1821-iS^o1 

In  any  consideration  of  foreign  commerce  the  subject  of  balance  of  trade  is 
important.  When  a  country  imports  more  goods  than  it  exports  the  balance  of 
trade  for  that  country  is  said  to  be  unfavorable.  Any  country  having  an  excess  of 
exports  over  imports,  is  said  to  have  a  favorable  balance  of  trade.  For  various 
reasons  the  foreign  trade  of  the  United  States  before  1860  was  unfavorable.  The 
total  value  of  this  balance  and  the  manner  in  which  it  was  provided  for  have  been 
described  as  follows: 

Let  us  now  compare  our  exports  and  imports,  in  order  to  learn  the 
amount  of  our  foreign  debt,  the  balance  of  trade,  and  situation  of  the 
country  at  different  periods;  and  to  ascertain  the  effect  of  our  several 
tariff  acts,  upon  the  prosperity  of  the  country. 

Owing  to  the  embargo  which  was  passed  by  Congress,  December 
22d,  1807,  the  various  non-importation,  and  non-intercourse  acts 
which  followed  in  quick  succession,  and  the  war  from  June,  1812,  to 
January,  1815,  our  imports  were  not  very  large,  and  the  foreign  debt 
of  our  merchants  could  not  have  been  very  heavy  at  the  close  of  the 
war.  Though  our  national  debt  at  the  close  of  the  war  was  over  an 
hundred  and  twenty  millions  of  dollars,  yet  it  was  mostly  owing  to 
our  own  citizens  and  to  our  banking  institutions;  and  the  whole 
amount  of  debt  due  from  our  citizens  and  our  government  to  Euro- 
peans, did  not  perhaps  exceed  thirty  millions  of  dollars.  But  our 
duties  on  imports  were  so  low,  that  immediately  after  the  war,  and 
during  the  years  1815,  i8i6,and  1817,  our  country  was  literally  flooded 
with  British,  French,  and  other  foreign  manufactures,  including 
cotton  and  woolen  cloths,  silks,  linens,  hats,  boots,  shoes,  iron,  and 
hardware,  &c.,  &c.,  amounting  in  all  during  those  three  years,  (as 
estimated  in  the  Commercial  Dictionary,)  to  the  sum  of  $359,394,274; 
while  our  exports  during  the  same  period  amounted  to  only  $222,- 
149,774.  If  we  add  25  per  cent,  to  our  exports  for  freight  and  profits 
of  American  merchants  and  ship  owners,  they  would  amount  to  about 
$278,000,000,  and  leave  a  balance  of  trade  against  us  during  those 
three  years,  amounting  to  the  enormous  sum  of  $81,000,000.  Our  ex- 


1  Essays  on  the  Progress  of  Nations.     By  Ezra  C.  Seaman  (New  York,  1852), 
392-5- 


FOREIGN   COMMERCE 


425 


ports  in  1818,  1819,  and  1820,  amounted  to  $232, 115,323;  our  imports 
during  that  period  are  estimated  at  $283,325,000;  and  if  we  add  20 
per  cent,  to  our  exports  for  freight  and  profits,  and  call  our  foreign 
debt  at  the  close  of  the  war  $30,000,000,  calculating  interest  upon 
it,  our  aggregate  foreign  debt,  including  American  stocks  held  by 
Europeans,  would  amount  on  the  3oth  day  of  September,  1820,  to 
about  $126,000,000;  perhaps  sixteen  millions  of  it  was  lost  by  the 
failure  and  bankruptcy  of  American  merchants  and  importers;  leav- 
ing $110,000,000,  which  has  been  paid. 

All  the  money  and  products  sent  abroad  to  pay  the  interest  on  our 
foreign  debt,  and  the  dividends  on  our  stocks  held  abroad,  appear  as 
part  of  our  exports;  and  the  proceeds  of  all  loans,  and  moneys  and 
effects  sent  here  to  be  invested  in  our  stocks,  appear  in  and  as  a  part 
of  our  imports.  Foreign  debt,  including  the  amount  of  our  stocks 
held  by  Europeans  on  the  first  day  of  October,  1820,  exclusive 
of  sixteen  million  dollars  due  from  bankrupts,  estimated  at 
$110,000,000. 

Statement  in  millions  of  dollars,  of  the  value  of  imports  into  the 
United  States  during  the  undermentioned  fiscal  years  of  coin  and 
bullion,  other  free  goods,  dutiable  goods,  and  the  amount  of  duties 
collected  during  each  period. 


Years 

Coin 
and 
Bullion, 
Millions 

Free 
Goods, 
Millions 

Dutiable 
Goods 

Total 
Im- 
ported 

Duties 
Collected, 
Millions 

1821  to  1824  

$24   0 

$13 

$265 

$1O1    O 

SflO    4 

1825  to  1828  

28.7 

10    I 

2QI      "C 

14O    1 

lie 

1829  to  1832. 

22    7 

27     C 

2O7    A. 

IAO  6 

124. 

1833  to  1814. 

2C 

7:  8 

Ill    8 

214    6 

41    I 

1811;  to  1837. 

•27 

2O2    ^ 

241  6 

480  o 

74  8 

1838  

17.  7 

43  -  I 

S2    0 

ill    7 

10    7 

1810 

e    6 

70  8 

85  6 

162 

2C    c 

1840  to  1842.      .  . 

17   0 

I3C     Q 

181  4 

ii<;  2 

<ri    6 

1843  to  1846  

^6 

71  .  2 

•3Q4.     8 

412 

07    i 

1847  

24.  i 

17.6 

los   ? 

147    2 

2^    7 

1848  to  1850. 

17  6 

?O    2 

41  1    2 

48l 

GO    8 

The  tariff  act  of  1832  exempted  from  duty  all  teas  imported  in 
American  vessels  from  China  and  other  places  beyond  the  Cape  of 
Good  Hope,  coffee,  spices,  fruits,  nuts,  gums,  dyewoods,  and  nearly 
all  other  raw  products  of  the  torrid  zone,  except  sugar,  and  reduced 


426  READINGS  IN  ECONOMIC  HISTORY 

the  duties  on  manufactures  of  silk,  to  a  rate  of  from  five  to  ten 
per  cent. 

The  compromise  act  of  1833  provided  for  a  prospective  periodical 
reduction  of  duties  until  they  should  be  reduced  after  the  3oth  of 
June,  1842,  to  20  per  cent.,  added  greatly  to  the  free  list,  and 
exempted  from  duty  nearly  all  the  manufactures  of  silk,  worsted, 
silk  and  worsted,  linen,  and  laces  imported  from  Europe  after  the 
year  1833. 

Under  these  acts  the  value  of  the  goods  imported  free  of  duty, 
increased  immensely,  as  shown  by  the  foregoing  table.  The  manu- 
facturers of  silk  worsted,  silk  and  worsted,  linen,  laces,  and  sheeting, 
imported  free  of  duty  in  1839,  were  valued  at  over  thirty-six  million 
dollars.  These  heavy  imports  of  articles  of  luxury  contributed  to 
increase  the  balance  of  trade  against  the  country,  and  to  involve  it 
hi  debt. 

The  imports  into  the  United  States  in  1841  exclusive  of  specie 
were  valued  at  $122,957,544;  in  1842  they  amounted  to  only  $96,- 
075,071.  Perhaps  nothing  but  embarrassments,  inability  to  pay 
promptly  our  foreign  debts,  and  the  interest  upon  them,  and  the  low 
state  of  American  credit  abroad,  prevented  the  imports  in  1842  from 
amounting  to  as  much  as  they  did  in  1839  and  1841.  About  two 
thirds  in  value  of  the  imports  then  consisted,  and  now  consist,  of 
manufactured  products  and  metals,  the  greatest  part  of  which  might 
and  ought  to  be  produced  in  the  United  States.  The  effect  of  the 
tariff  of  1842  was  to  lessen,  by  means  of  increased  duties,  the  importa- 
tion of  articles  of  luxury,  such  as  silks,  satins,  laces,  wines,  and  dis- 
tilled spirits,  as  well  as  iron,  hardware,  and  manufactures  of  cotton, 
wool,  worsted,  and  linen.  It  contributed  to  promote  the  interest 
of  the  country  in  several  modes,  ist.  By  increasing  domestic  in- 
dustry. 2d.  By  turning  the  balance  of  trade  in  favor  of  the  country 
and  contributing  to  relieve  it  from  foreign  debts  and  embarrassments. 
3d.  By  increasing  the  revenue,  and  4th  by  checking  luxury.  The 
compromise  act  of  1833  produced  opposite  effects  in  the  long  run,  in  all 
these  particulars,  and  contributed  to  paralyze  the  industry  of  the 
country,  and  to  impoverish  it.  Such  are  the  effects  also  of  the  tariff 
of  1846,  and  the  longer  it  is  continued  in  force  the  more  plainly  they 
will  be  developed. 


FOREIGN  COMMERCE  427 

IV.  OCEAN  STEAM  NAVIGATION 

Development  between  1818  and  1840*- 

The  most  important  event  in  ocean  navigation  during  the  nineteenth  century 
was  the  application  of  steam  as  a  motive  power.  As  a  consequence  the  carrying 
capacity  for  freight  and  the  comforts  of  travel  were  increased. 

No  peaceful  event  of  modern  times  has  excited  a  greater  interest 
in  this  country  and  Europe,  than  the  establishment  of  regular  steam 
communication  between  the  opposite  shores  of  the  Atlantic.  The 
experiment,  at  first  denounced  as  visionary,  and  which  one  of  the 
greatest  mechanical  philosophers  of  England,  even  within  the  last 
four  years,  demonstrated  to  be  impossible,  has  been  fairly  and  fully 
tried,  and  its  success  is  no  longer  a  question  of  doubt  anywhere. 
That  trackless  waste  of  waters,  which,  by  the  populous  eastern  world, 
during  the  first  fifteen  hundred  years  of  the  Christian  era,  was  regarded 
as  illimitable,  or  as  leading  only  to  "that  bourne  from  whence  no 
traveller  returns,"  has  become  the  grand  highway  of  nations.  The 
distance  which  Columbus,  in  his  first  voyage,  was  seventy  days  in 
accomplishing,  from  Palos  to  San  Salvador,  and  which  the  Plymouth 
pilgrims,  one  hundred  and  twenty  years  after  him,  were  sixty-five 
days  in  traversing  from  Plymouth  to  Cape  Cod,  is  now  accomplished 
in  less  than  thirteen  days!  The  energy  and  skill  of  our  countrymen 
had  carried  the  science  of  ship-building  to  the  highest  perfection; 
and  it  may  be  doubted  whether  greater  safety,  speed,  beauty,  and 
accommodation  can  be  devised  by  human  ingenuity,  than  are  com- 
bined in  the  splendid  lines  of  packet-ships,  which  ply  between  New 
York  and  Liverpool,  and  London  and  New  York.  But,  upon  a  calcu- 
lation of  ten  years,  the  average  passage  of  sailing-vessels  from  Liver- 
pool to  New  York,  is  found  to  be  thirty-six  days,  and  from  New  York 
to  Liverpool,  twenty-four.  The  average  passage  of  the  packets 
during  1839,  was  less,  the  outward  being  only  twenty-two  and  a  half 
days,  and  the  homeward  passage  thirty- three  days  and  seventeen 
hours.  The  shortest  outward  was  made  in  eighteen  days  and  the 
shortest  return  passage  in  twenty-two.  The  establishment  of  the 
two  great  lines  of  steamships  which  now  ply  between  London,  Liver- 
pool, Bristol,  and  New  York,  and  between  Liverpool  and  Boston, 
via  Halifax,  reduces  the  passage  across  the  Atlantic,  to  an  average 
of  about  thirteen  days! 


Hunt's  Merchants'  Magazine  (New  York,  1840),  III,  296-9,  304. 


428  READINGS  IN  ECONOMIC  HISTORY 

A  new  era  has  indeed  commenced.  Enterprise  and  skill,  called 
into  active  being  by  the  wealth  of  Great  Britain,  have  brought  distant 
nations  into  neighborhood,  opened  new  sources  of  prosperity,  and 
added  new  ties  to  those  bonds  of  national  friendship  and  commercial 
interest,  which  have  hitherto  existed  between  this  and  the  father- 
land. Events  of  such  importance  are  entitled  to  something  more 
than  a  mere  passing  commentary. 

While  it  is  conceded  that  the  British  have  been  the  first  to  demon- 
strate the  superior  safety  of  their  steamers  on  the  sea,  the  Americans 
were  the  first  to  accomplish  the  passage  of  the  Atlantic  by  steam 
power.  Fulton,  at  his  death,  left  unfinished  a  steam-vessel,  intended 
for  St.  Petersburgh,  where  the  Russian  government  had  offered  him 
and  his  associates  high  privileges,  in  case  of  its  arrival  before  a 
certain  period.  The  vessel  was  finished  and  fitted  for  sea,  but  from 
some  unforeseen  cause,  the  enterprise  was  suddenly  abandoned. 
Other  parties,  however,  took  it  up,  and  on  the  twenty-second  of  Au- 
gust, 1818,  the  steamship  Savannah  was  launched  at  New  York.  She 
was  built  by  Francis  Fickett,  under  the  superintendence  of  Captain 
Moses  Rogers,  could  carry  no  more  than  seventy-five  tons  of  coal, 
and  a  small  quantity  of  wood,  and  was  therefore  fitted  not  only  with 
an  engine,  but  with  masts  and  sails,  with  the  design  only  to  make 
use  of  the  engine  on  her  European  passage,  when  the  wind  prevented 
her  laying  her  course.  Having  completed  his  vessel,  Captain  Rogers 
proceeded  to  Savannah,  in  May,  1819,  and  on  the  2$th  of  that  month 
sailed  for  Liverpool,  where  he  came  to  anchor  on  the  soth  of  June, 
in  26  days  from  Savannah.  From  Liverpool,  on  the  23d  of  July, 
the  Savannah  proceeded  around  Scotland  to  the  Baltic,  then  up  that 
sea  for  St.  Petersburgh,  and  on  the  Qth  of  September,  moored  off 
Cronstadt.  She  left  Cronstadt  on  the  6th  of  October,  and  on  the 
30th  of  November,  anchored  off  Savannah,  having,  on  her  return 
voyage,  stopped  four  days  at  Arendall,  in  Norway.  During  the 
whole  of  this  period,  she  met  with  no  accident,  except  the  loss  of  a 
small  boat  and  anchors.  She  made  two  voyages  to  Europe.  At 
Stockholm,  she  was  visited  by  Bernadotte,  king  of  Sweden,  who  pre- 
sented Captain  Rogers  with  a  "stone  and  muller,"  as  a  token  of 
his  gratification  at  the  success  of  the  enterprise.  At  St.  Peters- 
burgh, Captain  Rogers  received  from  the  Emperor  Alexander  a 
present  of  a  silver  tea-kettle,  as  a  token  of  his  gratification  at  the 
first  attempt  to  cross  the  Atlantic  by  steam.  At  Constantinople, 
Captain  Rogers  also  received  complimentary  presents  from  the 
Sultan. 


FOREIGN   COMMERCE  429 

During  the  year  1819,  a  vessel,  rigged  as  a  ship,  and  provided  with 
an  engine,  was  built  at  New  York,  for  the  purpose  of  plying  as  a  packet 
between  New  York  and  Charleston,  Cuba  and  New  Orleans.  The 
experiment,  so  far  as  speed  and  safety  were  concerned,  was  entirely 
successful,  but  failing  to  pay  expenses,  was  of  necessity  abandoned. 

The  idea  of  establishing  a  regular  steam  communication  between 
New  York  and  Liverpool  had  now  come  to  be  seriously  entertained 
by  some  of  the  sagacious  and  enterprising,  on  both  sides  of  the 
Atlantic.  The  voyages  of  the  British  steamer  Enterprise,  in  1825, 
to  the  East  Indies,  by  means  similar  to  those  used  by  the  Savannah, 
seems  to  have  settled  the  question  in  the  minds  of  the  English  public, 
as  to  the  superiority  of  ocean  steam  navigation,  provided  ships  could 
be  so  constructed  as  to  carry  a  sufficient  quantity  of  fuel.  .  .  . 

We  do  not  feel  called  upon  here  to  discuss  the  question,  whether 
the  "  Great  Western  Steamship  Company,"  or  the  "  British  and  Ameri- 
can Steam  Navigation  Company,"  are  entitled  to  the  credit  —  and  an 
honorable  distinction  it  certainly  is  —  of  leading  the  way  in  this  great 
enterprise.  .  .  .  The  Bristol  company  were  indeed  first  upon  the  line 
with  their  noble  ship,  the  Great  Western;  but  the  London  and  New 
York  company  were  actually  first  to  accomplish  the  passage  through 
by  steam  with  the  Sirius,  chartered  for  the  express  purpose.  To  the 
unwearied  perseverance  of  Mr.  JUNIUS  SMITH,  an  opulent  and  dis- 
tinguished American  merchant  in  London,  more  than  to  any  other 
individual,  is  the  final  and  successful  accomplishment  of  this  great 
enterprise  doubtless  to  be  attributed.  From  January,  1833,  to  the 
present  moment,  he  has  been  enthusiastically  devoted  to  the  object. 
As  early  as  June,  1835,  he  published  his  first  prospectus  of  a  line  of 
steam  packets  between  England  and  America.  The  public  were  at 
first  disposed  to  ridicule  the  project.  Nothing  daunted,  he  perse- 
vered, and  in  November  following,  issued  a  second  prospectus,  which 
began  to  attract  the  attention  of  capitalists.  Shares  were  subscribed, 
doubt  yielded  to  demonstration,  the  requisite  capital  was  soon  pro- 
vided, and  the  "British  and  American  Steam  Navigation  Company" 
was  organized  on  a  solid  foundation.  In  October,  1836,  they  made 
their  contract  for  building  their  first  steamship;  the  keel  was  laid  on 
the  ist  of  April,  1837,  but  owing  to  the  failure  of  one  of  the  contractors, 
and  other  difficulties,  she  was  not  launched  until  the  24th  of  May, 
1838,  when  she  received  the  name  of  the  British  Queen.  She  left 
Portsmouth  on  the  i2th  of  July,  1839,  on  her  first  trip  to  New  York, 
and  arrived  at  New  York  on  the  27th,  after  a  passage  of  fourteen 
days  and  eighteen  hours. 


430  READINGS  IN  ECONOMIC  HISTORY 

No  sooner  did  the  fact  of  the  establishment  of  the  British  and 
American  company  transpire,  than  the  people  of  Bristol  became 
aroused  to  the  importance  of  securing  to  their  ancient  city  the  advan- 
tages of  a  steam  communication  with  New  York.  Mr.  Brunei,  the 
celebrated  engineer,  and  other  gentlemen  connected  with  the  great 
western  railway,  came  forward  with  liberal  subscriptions.  A  commit- 
tee was  appointed,  assisted  by  one  of  the  most  competent  practical 
ship-builders  of  the  kingdom,  to  make  the  necessary  surveys  and 
examination.  Their  report  was  made  to  the  subscribers  on  the 
ist  of  January,  1836,  and  on  the  2d  of  June,  1836,  the  "Great  West- 
ern Steamship  Company"  was  established  by  deed  of  settlement. 
On  the  28th  of  July  following,  the  stern-post  of  the  Great  Western 
was  raised,  and  on  the  igth  of  July,  1837,  she  was  launched.  After 
testing  the  working  of  her  machinery,  she  departed  from  Bristol  on  the 
8th  of  April,  1838,  for  New  York,  arriving  at  this  port  23d  of  April,  after 
a  passage  of  fourteen  days,  twelve  hours.  She  had  made  fifteen  trips 
across  the  Atlantic  before  the  British  Queen  was  placed  upon  the  line. 

The  "  Trans- Atlantic  Steamship  Company,"  formed  at  Liverpool, 
in  the  summer  of  1838,  put  two  steamers  on  the  route  between  that 
port  and  New  York.  The  Royal  William  sailed  on  the  5th  of  July, 
and  arrived  the  24th,  making  a  passage  of  eighteen  days,  twelve 
hours.  The  Liverpool  sailed  on  the  6th  of  November,  and  arrived 
the  23d,  making  the  passage  in  sixteen  days,  twelve  hours.  The 
Royal  William  was  withdrawn  from  the  route  in  the  winter  of  1838, 
and  the  Liverpool  in  1839. 

Public  attention  in  London  and  in  New  England  was  soon  directed 
to  the  establishment  of  a  line  of  steamers  to  ply  between  Boston  and 
Liverpool;  and  in  1839,  Mr.  SAMUEL  CUNARD,  a  citizen  of  London, 
succeeded  in  effecting  a  contract  with  the  British  government,  for  the 
transmission  of  her  majesty's  North  American  mails,  twice  a  month 
from  Liverpool,  via  Halifax  to  Quebec.  The  liberal  sum  of  £60,000 
per  annum  for  seven  years,  is  to  be  paid  by  the  government  for  this 
service.  Four  steamships  are  to  be  placed  on  this  line  —  two  of 
which,  the  Britannia  and  Acadia,  have  already  made  their  appear- 
ance. The  citizens  of  Boston  have  aided  the  enterprise  with  a  spirit 
and  liberality  honorable  to  their  character,  and  with  a  keen  percep- 
tion of  its  importance  to  their  nourishing  city.  The  Unicorn,  the 
first  steamship  from  Old  England  to  New  England,  arrived  at  Boston 
on  the  3d  of  June.  She  did  not  belong  to  the  line,  and  her  voyage 
was  experimental.  She  made  the  passage  in  seventeen  days  from 
Liverpool  to  Boston.  The  Britannia,  the  first  of  the  regular  line, 


FOREIGN   COMMERCE  431 

arrived  at  Boston  on  the  i8th  of  July,  in  fourteen  days  from  Liverpool; 
and  the  Acadia,  which  left  Liverpool  the  4th  of  August,  arrived  at 
Boston  on  the  lyth,  making  the  passage  in  twelve  days,  twelve  hours  — 
being  the  shortest  ever  made  from  England  to  the  United  States. 

On  the  same  day  when  the  Acadia  arrived  at  Boston,  the  President 
came  up  the  harbor  of  New  York.  The  day  was  fine,  and  the  spec- 
tacle one  rarely  ever  excelled.  This  magnificent  steamship  —  the 
largest  in  the  world  —  belongs  to  the  British  and  American  Steam 
Navigation  Company,  and  is  to  ply  alternately  with  the  British  Queen, 
in  the  same  line.  The  President  was  launched  on  the  Thames,  on 
the  gth  of  December  last,  and  in  the  perfection  of  her  model,  style 
of  architecture,  and  beauty  of  finish,  is  unequalled  perhaps  by  any 
other  ship  that  floats  upon  the  deep.  .  .  . 

The  effects  on  the  commerce  and  prosperity  of  the  United  States, 
which  must  follow  the  establishment  of  these  lines  of  steam-packets, 
cannot  fail  to  be  important.  The  certainty  and  despatch  with  which 
their  voyages  are  performed,  will  turn  an  immense  amount  of  busi- 
ness into  new  channels,  and  multitudes,  who  have  hitherto  trans- 
acted their  business  abroad,  through  agencies  and  correspondents, 
will  now  cross  and  re-cross  the  Atlantic,  as  many  times  a  year,  per- 
chance, with  as  little  deliberation,  as  formerly  attended  their  journeys 
from  Maine  to  New  York,  or  from  New  York  to  New  Orleans.  As  an 
illustration  of  the  advantages  offered,  not  only  to  the  city,  but  the 
interior  and  remote  sections  of  country,  connected  by  railways  and 
river-steamers  with  the  commercial  marts,  the  fact  may  be  stated, 
that  a  person  at  Chicago,  in  Illinois,  1200  miles  from  New  York, 
may,  by  means  of  existing  steam  accommodations,  actually  reach 
Liverpool  or  London,  in  nineteen  days  from  Chicago!  The  Journal 
of  Commerce  recently  furnished  another  illustration  of  the  advan- 
tages to  be  derived  from  the  increased  facility  of  communication, 
and  despatch  of  merchandise.  An  order  was  sent  from  New  York 
to  England  on  the  first  of  July.  The  goods  were  bought  in  London, 
sent  to  Bristol  by  land,  reached  here,  were  sold,  and  the  proceeds 
remitted  back  by  the  Great  Western,  and  would  probably  be  in 
London  about  September  ist.  So  these  three  crossings  of  the  At- 
lantic, with  the  transaction  of  the  business,  and  eleven  days  lost  by 
delays  in  waiting  for  the  steamers  to  start,  will  all  consume  but  two 
months.  It  is  probable  that  letters  sent  from  Liverpool  by  the  Acadia 
will  receive  answers  by  the  Great  Western  in  just  about  twenty-five 
days.  Money  employed  in  the  traffic  between  Europe  and  America 
can  now  perform  about  four  times  as  many  operations  as  it  could 


432 


READINGS  IN  ECONOMIC  HISTORY 


two  years  ago.    The  profits  on  each  operation  may  be  reduced,  but 
there  will  be  greater  certainty  and  stability  in  the  markets.  .  .  . 

V.  THE  CARRYING  TRADE 
The  Use  of  American  and  Foreign  Vessels,  1821-1860  1 

Prior  to  the  Civil  War,  more  than  a  half  of  the  foreign  commerce  of  the  United 
States  was  carried  in  American  vessels.  If  this  commerce  be  measured  in  dollars, 
it  is  found  that  the  percentage  of  it  carried  in  American  vessels  varied  from  92.5 
in  1826  to  66.5  in  1860.  The  extent  of  this  foreign  commerce  and  its  gradual 
shifting  from  American  to  foreign  vessels  may  be  seen  in  yet  another  way.  In 
1825  but  9  per  cent  of  the  tonnage  of  vessels  entering  and  clearing  in  the  foreign 
trade  of  this  country  was  foreign,  while  in  1850  it  was  40  per  cent. 

i.     FOREIGN  CARRYING  TRADE  OF  THE  UNITED  STATES,  1821-1860. 


Per  Cent 

Year 

In  American  Vessels 

In  Foreign  Vessels 

Carried  in 

American  Vessels 

1821 

$113,201,462 

$  14,358,235 

88.7 

1825 

180,702,261 

15,173,202 

92.3 

1830 

129,918,458 

14,447,97° 

89.9 

1835 

229,424,056 

42,165,263 

84.5 

1840 

198,424,609 

40,802,856 

82.9 

1845 

189,380,923 

42,520,247 

81.7 

1850 

239,272,084 

90,764,954 

72.5 

1855 

405,485,462 

131,139,904 

75-6 

1860 

507,247,757 

255,040,793 

66.5 

2.    TONNAGE    OF    AMERICAN   AND    FOREIGN   VESSELS    ENTERED 
AND  CLEARED  IN  THE  FOREIGN  TRADE  OF   THE  UNITED 

STATES,  1821-1860. 


Year 

American 

Per  Cent 

Foreign 

Per  Cent. 

1821 

1,570,045 

90 

164,604 

10 

1825 

1,841,120 

9i 

188,007 

9 

1830 

1,938,987 

88 

265,336 

12 

1835 

2,753,270 

68 

1,280,134 

32 

1840 

3,223,955 

69 

1,418,849 

31 

1845 

4,089,463 

69 

1,840,838 

31 

1850 

5,205,804 

60 

3,503,837 

40 

1855 

7,930,373 

65 

4,194,270 

35 

1860 

12,087,209 

7i 

4,977,916 

29 

1  Annual  Report  of  the  Commissioner  of  Navigation,  1912  (Washington,  1912), 
193-5- 


FOREIGN   COMMERCE  433 

VI.  THE  FOREIGN  COMMERCE  OF  IMPORTANT  PORTS 

A.   Foreign  Commerce  of  the  City  of  New  York  in  1859  * 

Of  all  the  American  ports  in  1860,  New  York  was  the  most  important.  The 
extent  of  the  trade  of  that  city  is  shown  by  the  following : 

The  year  1859  has  been  marked  by  no  extraordinary  events  of  a 
commercial  character.  The  country  appears  to  be  recovering  from 
the  revulsion  of  the  year  1857,  and  the  long  series  of  disasters  and 
losses  which  followed.  The  business  of  the  port  of  New- York  for 
the  year  shows  a  favorable  reaction  from  the  extreme  dullness  of  the 
year  1858.  Its  foreign  exports  having  reached  one  hundred  and 
thirty-seven  millions  in  the  year  1859,  against  eighty-five  millions 
for  the  preceding  year;  and  the  importations  have  increased  in  a 
similar  ratio;  the  general  results  for  the  year,  when  compared  with 
1857  and  1858,  being  as  follows: 

New-York  City                              1857  1858  1859 

Total  exports $117,723,332  $  85,639,653  $137,696,187 

Total  imports 229,640,087  152,799,388  244,341,542 

Total  customs  revenue 357639,075  26,476,727  38,834,212 

Thus,  the  exports  of  1859  exceeded  those  of  1858,  sixty-two  per 
cent.,  and  the  imports  likewise  increased  over  sixty- two  and  a  half 
per  cent.;  the  custom-house  revenue  increasing  in  nearly  the  same 
ratio. 

We  have  not  the  full  returns  of  the  commerce  of  the  United  States 
for  the  same  periods,  but  from  the  official  reports  for  the  fiscal  years 
ending  June  30,  1857,  1858  and  1859,  it  would  appear  that  the  foreign 
imports  of  New- York  are  about  two-thirds  of  the  whole;  and  the 
exports  about  one-third  of  the  whole. 

The  relative  importance  of  the  foreign  commerce  of  New- 
York,  and  all  other  ports  of  the  United  States,  is  shown  in  the 
annexed  summary  of  imports  for  the  years  1821,  1831,  1841  and 
1851: 


1  Annual  Report  of  the  Chamber  of  Commerce  for  the  Year  1859-60  (New  York, 
1860),  1-2. 


434 


READINGS  IN  ECONOMIC  HISTORY 


Imports  and  Exports  of  the  State  of  New-York,  compared  -with  those  of  the  United 
States  for  the  separate  years,  1821,  1831,  1841  and  1851. 


Year 

Imports  of 
New-  York 

Other  Ports 

Total  United 
States 

Per  Cent. 

of  N.  Y. 

1821 

$  23,629,000 

$38,956,000 

$  62,585,000 

37-75 

1831 

57,077,000 

46,114,000 

103,191,000 

55-31 

1841 

75,713,000 

52,233,000 

127,946,000 

59.18 

1851 

141,546,000 

74,678,000 

216,224,000 

65.46 

The  growth  of  New- York,  as  the  importing  point,  is  further  illus- 
trated by  the  annexed  summary: 


IMPORTS 


Year 

State  of  N.  Y. 

Other  Ports 

Total 
United  States 

Per  Cent. 

1855-1856 
1856-1857 
1857-1858 
1858-1859 
Four  years  .  . 
Average  .... 

$210,160,454 
236,493.485 
178,475,736 
229,181,349 

$104,479,468 
124,396,656 
104,137,414 
109,586,781 

$314,639,922 
360,890,141 
282,613,150 
338,768,130 

66.79 
65-53 
63-15 
67.65 

$854,311,024 
213,577,756 

$442,600,319 
110,650,079 

$1,296,911,343 
324,227,835 

65.90 

EXPORTS 


Year 

State  of  N.  Y. 

Other  Ports 

United  States 

Per  Cent. 

1855-1856 

1856-1857 
1857-1858 
1858-1859 
Four  years  .  . 

$119,111,500 
134,803,298 
108,340,924 
117,539,825 

$207,853,408 
228,157,384 
216,303,496 
239,249,637 

$326,964,908 
362,960,682 
324,644,420 
356,789,462 

36.43 
37-14 
33-37 
32-94 

$479,795,547 

$891,563,925 

$i,37i,359,472 

34-99 

Estimating  the  population  of  the  United  States  at  thirty  millions, 
the  exports  per  capita,  in  1859,  would  appear  to  be  $11  89. 

Taking  the  decennial  periods  from  1821  to  June,  1850,  and  the 
nine  years  to  June,  1859,  it  will  appear  that  the  proportion  of  the 
State  of  New- York  to  the  whole  has  increased  from  28.19  Per  cent. 


FOREIGN   COMMERCE 


435 


to  about  thirty-five  per  cent,  in  the  exports;  and  from  37.75  per  cent, 
to  more  than  two-thirds  in  the  importations. 

The  custom-house  returns  show,  that  towards  the  close  of  1859 
there  was  a  gratifying  revival  in  the  shipping  business  of  the  port  of 
New- York,  the  value  of  both  exports  and  imports  being  largely  in- 
creased as  compared  with  the  corresponding  period  of  former  years; 
the  influence  of  which  has  been  felt  in  the  advanced  rates  paid  for 
freights,  the  relative  scarcity  of  ships,  and  the  improved  tone  of  the 
shipping  interest  generally.  And  with  commerce  active,  the  whole 
basis  of  prosperity  to  our  city  and  country  must  soon  come  under 
favorable  influences. 


B.   Foreign  Trade  of  Boston  from  1845  to 

Although  the  foreign  trade  of  Boston  was  much  less  important  than  that  of 
New  York,  it  was  considerable.  The  following  statistics  from  the  1860  report 
of  the  Boston  Board  of  Trade  indicates  the  extent  of  the  foreign  trade  of  that  city: 

STATEMENT  of  the  declared  -value  of  both  the  Domestic  and  Foreign  EXPORTS  from 
the  District  of  Boston  and  Charlestown,  during  the  years  ending  June  30,  1846-59. 


Total 

Gold  and  Silver 
Coin  and  Bullion 
included  in  the 
foregoing 

Year  ending  June  30,  1846  

$  8,968,031 

$      460,815 

1847 

0.716.001 

374.,  471 

1848        

12,204,812 

2,550,8';  7 

1849  

8,602,073 

178,506 

1850.  . 

9,141,652 

559,468 

1851 

10,498,153 

i,26tc,8t;:; 

1852    .... 

13,388,512 

4,206,743 

1853.  . 

18,094,683 

4,004,549 

1854.  . 

19,751,916 

5,268,450 

igee 

26,641,661 

12,279,068 

1856  

27,085,653 

12,010,083 

i8<;7.  . 

28,326,918 

13,085,318 

1858 

20,  070,  8<;3 

5,106,167 

1859    . 

16,172,120 

4,151,860 

Sixth  Annual  Report  of  the  Boston  Board  of  Trade  (Boston,  1860),  90-1. 


436  READINGS  IN  ECONOMIC  HISTORY 

STATEMENT  of  the  same  for  the  year  ending  December  31,  1859 

In  American  vessels $  9,729,935 

In  Foreign  vessels 7,818,725 


Total  ......................................  $17,548,660 

Value  of  gold  and  silver  exported  .................     5,724,970 

STATEMENT  of  the  Declared  value  of  Goods,  Wares  and  Merchandise,  of  the  growth, 
produce  and  manufacture  of  Foreign  Countries,  IMPORTED  into  the  District  of 
Boston  and  Charlestown,  during  the  years  ending  June  30,  1846-59. 

Year  ending  June  30,  1846  .......................  $22,615,117 

1847  .......................  35,523.968 

1848  .......................  27,182,308 

1849  .......................  23,341,145 

1850  .......................  28,659,733 

i?5i  .......................  30,508,417 

1852  .......................  31,958,192 

1853  .......................  39,300,912 

1854  ......         ......  45,988,545 

1855  .......................  43,256,279 

1856  .......................  41,661,088 

1857  .......................  44,840,083 

1858  .......................  40,432,710 

1859  .......................  41,174,670 


STATEMENT  of  the  same  for  the  year  ending  December  31, 
In  American  vessels  ............................  $29,501  ,582 

In  Foreign  vessels  ..............................   14,452,443 


Total $43,954,025 


C.  A  View  of  the  New  Orleans  Levee  in  1839 


The  foreign  commerce  of  New  Orleans  was  important  at  an  early  day;  and  even 
after  the  railroads  had  robbed  the  Mississippi  River  of  its  up-river  trade,  the 
exports  from  New  Orleans  continued  to  be  large.  From  that  city  were  shipped 
great  quantities  of  cotton,  produce,  molasses  and  tobacco.  An  English  traveler 
draws  a  picture  of  the  levee  in  1839  as  follows: 

The  most  animated  and  bustling  part  of  all  the  city  is  the  Levee, 
or  raised  bank  running  along  immediately  in  front  of  the  river,  and 
extending  beyond  the  houses  and  streets,  from  100  to  150  yards,  for 
a  length  of  at  least  three  miles,  from  one  end  of  the  city  to  the  other. 
Along  the  edge  of  this  Levee,  all  the  ships  and  vessels  are  anchored 

1  The  Slave  States  of  America.     By  J.  S.  Buckingham  (London,  [1842] ),  1, 325-7. 


FOREIGN   COMMERCE  437 

or  moored  in  tiers  of  three  or  four  deep.  The  largest  and  finest  ves- 
sels are  usually  at  the  upper  end  of  the  city,  near  Lafayette,  the  steam- 
boats lie  in  the  centre,  and  the  smaller  vessels  and  coasters  occupy 
the  bank  at  the  lower  end  of  the  city.  It  may  be  doubted  whether 
any  river  in  the  world  can  exhibit  so  magnificent  a  spectacle  as  the 
Mississippi  in  this  respect.  There  are  more  ships  in  the  Thames, 
but  the  largest  and  finest  of  these  are  usually  in  the  various  docks, 
while  the  smaller  kind  are  chiefly  seen  without,  and  the  Thames  has 
not  half  the  ample  breadth  and  sweep  of  the  Mississippi.  There  are 
as  many  vessels,  perhaps,  in  the  Mersey,  but  these  are  nearly  all  in 
dock,  and  the  river  is  comparatively  bare.  The  Tagus  is  a  broader 
stream,  but  its  shipping  are  neither  so  numerous  nor  so  fine;  and  even 
New  York,  splendid  as  is  the  array  of  ships  presented  by  her  wharfs, 
is  not  so  striking  as  New  Orleans,  where  a  greater  number  of  large, 
handsome,  and  fine  vessels  seemed  to  me  to  line  the  magnificent  curve 
of  the  Mississippi,  than  I  had  ever  before  seen  in  any  one  port.  The 
reflection  that  these  are  all  congregated  here  to  receive  and  convey 
away  to  other  lands  the  produce  of  such  mighty  streams  as  the  Mis- 
souri and  the  Mississippi,  the  Ohio,  the  Tennessee,  the  Arkansas, 
and  the  Red  River,  including  more  than  20,000  miles  of  inland  navi- 
gation, the  sources  of  the  principal  streams  being  in  the  region  of 
perpetual  snows,  and  their  outlet  in  the  latitude  of  perpetual  verdure, 
carries  one's  admiration  to  the  verge  of  the  sublime. 

The  Levee  itself,  on  the  edge  of  which  all  these  ships  and  vessels 
are  anchored,  is  covered  with  bales  of  cotton  and  other  merchandise; 
and  in  the  busy  season,  such  as  that  in  which  we  were  in  New  Orleans, 
in  March  and  April,  it  is  filled  with  buyers  and  sellers,  from  every  part 
of  the  Union,  and  spectators  from  all  parts  of  the  world.  There  are 
no  less  than  1,500  drays  for  the  conveyance  of  this  merchandise, 
licensed  by  the  city;  and  they  seem  to  be  all  in  motion,  flying  to  and 
fro  on  a  brisk  trot,  whether  laden  or  empty—  the  horses  never  walk- 
ing, and  the  drivers  never  sitting,  either  on  the  shafts,  or  in  the  drays, 
as  in  Europe.  The  bales  of  cotton,  on  their  arrival  in  the  rafts  or 
steam-boats,  from  the  upper  country,  are  carried  off  to  the  numerous 
establishments  of  steam-presses,  where  they  are  compressed  into 
about  half  their  original  bulk,  and  repacked  in  this  reduced  shape  for 
shipment  to  foreign  ports.  All  this,  with  the  arrival  and  departure 
every  day  of  many  hundreds  of  passengers  up  and  down  the  river, 
from  Cincinnati,  Louisville,  St.  Louis,  and  Pittsburg,  to  the  Havannah, 
to  New  York,  and  to  Texas,  occasions  such  incessant  bustle,  that  every 
body  and  every  thing  seems  to  be  in  perpetual  motion. 


438 


READINGS  IN  ECONOMIC  HISTORY 


VII.  IMPORTANT  EXPORT  CROPS 
A.  Exportation  of  Cotton  for  Various  Years  from  1821  to  1860  l 

The  most  important  export  crop  of  the  United  States  prior  to  1860  was  raw 
cotton.  It  rose  in  value  from  a  little  over  $20,000,000  in  1821  to  about  $160,000,000 
in  1859;  while  the  price  per  pound  varied  from  5.92  cents  in  1845  to  20.9  cents  in 
1825. 


Sea  Island 

Other 

Total 

Price 
ner 

Year 

Value, 
Dollars 

f*"* 

pound, 

Pounds 

Cents 

Av. 

1821 

11,344,066 

"3,549,339 

124,893,405 

20,157,484 

16.2 

1825 

9,665,278 

166,784,629 

1  76,449,907 

36,846,649 

20.9 

1830 

8,147,165 

290,311,937 

298,459,102 

29,674,883 

9-9 

1835 

7,752,736 

379,686,256 

387,358,992 

64,961,302 

16.8 

1840 

8,779,669 

735,161,392 

743,941,061 

63,870,307 

8-5 

1845 

9,380,625 

863,516,371 

872,905,996 

51,739,643 

5-92 

1850 

8,236,463 

627,145,141 

635,381,604 

71,984,616 

n-3 

1855 

13,058,59° 

995,366,011 

1,008,424,601 

88,143,844 

8-74 

1856 

12,797,225 

1,338,634,476 

i,35i,43i,7oi 

128,382,351 

9-49 

1857 

12,940,725 

i,o35,34i,75o 

1,048,282,475 

I3i,575-859 

12.55 

1858 

12,101,058 

1,106,522,954 

1,118,624,012 

131,386,661 

11.72 

1859 

13,713,556 

1,372,755,066 

1,386,468,556 

161,434,923 

12.72 

1860 

15,598,698 

1,752,087,640 

1,767,686,338 

191,806,555 

10.85 

B.   American  Wheat  and  the  World  Crop,  1846-1860  z 

Another  important  export  crop  was  wheat.  In  growing  wheat  the  American 
farmer  was  compelled  to  compete  with  the  wheat-growing  regions  of  Europe,  and 
the  condition  of  crops  in  those  sections  materially  affected  the  price  received  by 
the  American  farmer.  A  writer  in  1860  discusses  American  wheat  in  its  relation 
to  the  world  crop  as  follows : 

The  year  of  the  largest  import  of  flour  into  Great  Britain  was 
1847;  but  in  1851  the  aggregate  of  wheat,  in  flour  and  grain,  reached 
the  maximum.  The  quantities  of  corn  and  other  grain  imported 
into  Great  Britain  have  varied  considerably.  In  1847  the  quantity 
was  7,448,107  qrs.,  or  59,584,856  bushels.  Of  that  quantity  one- 
third  came  from  the  United  States.  The  quantity  required  has  never 

1  Treasury  Report,  1861  (Washington,  1861),  250-1. 

2  Hunt's  Merchants'  Magazine  (New  York,  1860),  XLIII,  405-8. 


FOREIGN  COMMERCE  439 

been  so  large  since.  France  was  a  large  importer  of  wheat  in  those 
years  —  '46  and  '47.  The  demand  of  those  two  countries  upon  the 
rest  of  the  world  was,  it  appears,  99,849,272  bushels — a  quantity 
nearly  equal  to  the  whole  crops  of  the  United  States.  The  States  of 
Belgium  and  Holland  were  also  short,  and  while  all  the  navigation 
laws  were  suspended  to  give  perfect  freedom  for  the  transportation 
of  grain,  and  some  national  vessels  were  used  to  transport  it,  the  prices 
of  freight  rose  immensely.  Flour  to  Liverpool,  from  New  York,  paid 
$2  per  bbl.,  and  grain  50  cents  per  bushel.  While  these  enormous 
supplies  were  required,  and  prices  that  rose  at  one  time  to  1 20  s.  per 
quarter  were  paid,  the  United  States  supplied  but  a  very  unimportant 
proportion  of  the  whole  amount  —  that  is  to  say,  about  44,000,000 
bushels.  From  1848  to  1852  France  was  an  exporter  of  wheat.  The 
demand  upon  the  markets  of  the  world  was  thereby  diminished,  and 
the  supply  increased.  The  crop  of  1852  again  failed  in  France,  and 
from  that  date,  through  the  Russian  war,  she  was  again  a  large  im- 
porter. In  the  four  years  ending  with  1857  she  bought  85,800,000 
bushels  of  wheat,  and  England  bought  184,000,000  in  the  same  time, 
or  together,  269,800,000  bushels,  of  which  the  United  States  supplied 
67,700,000  bushels,  or  25  per  cent.  In  all  that  period,  in  the  United 
States  the  consumption  of  food  was  very  active,  because  the  building 
of  railroads  was  pursued  to  an  extent  that  absorbed  $600,000,000  of 
capital;  land  speculations  were  rife;  2,000,000  emigrants  arrived  in 
the  country,  and  great  numbers  moved  from  East  to  West  on  the 
new  lands  that  were  to  be  soon  covered  with  the  growing  railroads. 
These  causes  produced  such  a  demand  for  food  at  the  door  of  the 
growers  as  to  leave  but  little  surplus  to  send  East,  and  the  quantities 
that  did  go  abroad  could  be  spared  only  at  very  high  prices.  We 
have  in  those  causes  a  reason  that  the  United  States,  a  peculiarly 
agricultural  country,  have  not  yet  taken  their  rank  as  a  supplier  of 
food  for  Europe.  In  the  years  of  large  demand  heretofore  the  means 
of  transportation  did  not  exist.  In  the  last  three  years,  when  the 
means  did  exist,  the  demand  was  slack.  The  moment  has  now  appar- 
ently arrived  when  the  demand  is  to  take  place  in  face  of  the  most 
extensive  means  of  meeting  it.  The  Western  crops  are  represented 
as  so  large  as  to  give  rise  to  fears  that  it  may  be  overdone,  and  that 
the  demand,  great  as  it  may  be  from  Europe,  will  not  suffice  to  raise 
prices,  in  face  of  such  overwhelming  supplies,  to  a  level  that  will  pay 
for  the  distant  transportation.  In  other  words,  that  the  demand  will 
be  met  before  the  most  remote  States  can  get  their  supplies  to 
hand. 


440  READINGS  IN  ECONOMIC  HISTORY 

If  we  look  back  to  the  famine  of  1847,  we  find  that  the  Erie  Canal 
and  the  lines  of  roads  that  now  form  the  New  York  Central  were  the 
only  through  communications  to  the  lakes.  They  were  the  only 
means  of  freight  transportation,  and  the  law  did  not  allow  the  rail- 
road to  carry  freight  until  1850.  The  basin  of  the  great  lakes  was 
fed  only  by  the  Ohio  canals  at  Toledo  and  Cleveland.  The  Indiana  — 
which  canal  did  not  operate  —  the  Illinois  Canal  was  not  then  avail- 
able, and  there  were  no  railroads  to  drain  the  produce  of  the  interior 
to  the  ports.  The  great  rivers  carried  down  supplies  to  New  Orleans, 
and  food  found  its  way  abroad  thence.  The  lakes  were  supplied  with 
a  very  moderate  amount  of  sail  tonnage,  and  the  expense  of  transporta- 
tion from  Chicago  to  New  York  was  very  great. 

The  great  famine  demand  began  in  1846.  At  the  close  of  July, 
in  that  year,  the  price  of  flour  in  New  York  was  $4,  and  the  rate  rose, 
steadily  until  it  reached  $912  per  barrel.  .  .  . 

Thus,  over  26,000^000  bushels  of  wheat  were  exported  as  flour  and 
grain,  and  that  export  raised  flour  to  $9  12  per  barrel.  Of  corn  only 
16,326,050  bushels  were  exported;  but  that  small  quantity  only  — 
not  3  per  cent,  of  the  crop  —  raised  the  price  to  90  cents  per  bushel, 
and  the  freight  to  28  s.  [d?J,  or  56  cents  from  New  York  to  Liverpool  in 
February,  1847.  The  total  tonnage  of  the  United  States  in  that  year 
was  1,241,313  registered,  and  1,597,733  coasting.  Of  the  latter, 
147,883  was  owned  at  the  lake  ports,  and  84,731  at  the  river  ports  — 
there  being  then  no  railroad  transportation.  The  production  of  grain 
in  1847  was  probably  by  no  means  so  large  as  the  figures  given  for 
the  census  of  1850,  since  the  high  price  obtained  in  those  famine  years 
not  only  stimulated  production,  but  also  ship  building.  These  two 
circumstances  caused  low  prices  of  grain  and  of  freights  in  the  suc- 
ceeding years.  It  then  appears  that  one  of  the  most  extraordinary 
famines  of  modern  times  could  only  draw  from  the  United  States 
42,000,000  bushels  of  corn  and  wheat. 

The  high  freights  greatly  stimulated  the  building  of  vessels  —  as 
well  registered  as  coasting  and  lake  tonnage  —  and  the  returns  show 
that  the  latter  increased  50  per  cent,  and  the  building  of  registered 
was  in  as  large  a  ratio.  The  trade  of  1847  was  strangled  for  want  of 
means  of  transportation.  These  had  increased  very  much  up  to 
1853.  In  the  five  years  from  1847  to  1853  the  government  sold 
12,000,000  acres  of  public  lands,  and  1,500,000  settlers  arrived  from 
abroad,  while  great  numbers  moved  from  the  Eastern  States  to  the 
West.  In  the  same  period  the  Northern  line  of  railroads  was  opened; 
the  New  York  Central  allowed  to  carry  freight;  the  Erie  was  opened 


FOREIGN   COMMERCE  441 

through,  and  the  connection  between  Baltimore  and  Philadelphia  and 
the  West  completed.  In  1847  the  Ohio  Canal  at  Cleveland  was  the 
only  work  which  fed  the  lakes,  and  these  delivered  644,913  barrels 
of  flour  in  that  year.  Before  1853  the  Indiana  Canal  was  opened; 
the  two  great  Michigan  roads  were  opened,  and  the  Illinois  canal  was 
completed,  drawing  grain  to  Chicago,  in  connection  with  one  or  two 
railroads.  The  tonnage  of  the  lakes  had  become  large,  and  the 
tonnage  of  the  whole  country  had  increased  from  2,417,000  in  1847, 
to  4,138,440  in  1852,  or  45  per  cent.  Such  was  the  state  of  affairs 
when  the  harvest  of  Europe  again  failed  in  1852.  The  lake  tonnage 
had  increased  to  271,100,  and  the  river  tonnage  to  169,000. 

In  this  state  of  affairs  the  harvest  of  Europe  again  failed  —  not  the 
potato  crop  so  much  as  the  grain  crop  —  and  there  was  again  much 
excitement,  and  we  may  trace  its  influence  upon  the  markets.  It 
is  now  just  seven  years  since  the  English  harvests  promised  the  same 
as  they  now  do.  At  that  time  the  present  writer  had  occasion  to  de- 
scribe the  state  of  the  markets  as  follows,  after  carefully  condensing 
the  news: — 

"  Many  weeks  since  we  laid  before  our  readers  the  leading  circum- 
stances that  were  conspiring  to  make  the  coming  year  on,e  of  the  most 
important  eras  in  the  corn  trade..  Unfortunately  the  weather  in 
England  and  Western  Europe  has  been  such  as  to  heighten  the  worst 
features  of  the  case,  and  support  large  estimates  of  the  probable  wants 
of  the  West  of  Europe,  including  England.  The  government  of 
France  has  exerted  itself  to  keep  down  prices;  but  the  general  rise 
in  France  of  14!  cents  per  bushel,  together  with  the  suspension  of  the 
corn  duties  in  France,  Belgium,  Holland  and  Italy,  has  sent  the  Eng- 
lish and  French  buyers  in  competition  into  this  market.  Leading 
English  firms,  although  impressed  with  the  idea  that  the  demand  is 
to  some  extent  speculative  and  premature,  have  sent  orders  for  choice 
flour,  limited  at  25  s.,  laid  down  in  Liverpool.  According  to  present 
estimates  the  wants  are:  — 

Of  France bushels,    38,781,165 

Of  England "        128,000,000 


Total,  all  kinds  of  grain "        166,781,165 

"In  usual  years  England  wants  half  this  quantity,  or  64,000,000 
bushels,  of  which  France  supplies  usually  30,000,000,  making  the 
two  countries  dependent  upon  the  rest  of  Europe  for  34,000,000 
bushels;  hence  they  require,  together,  132,000,000  bushels  more  than 


442  READINGS  IN  ECONOMIC  HISTORY 

usual;  and  Holland,  Belgium,  Italy,  and  Egypt  are  short.  These 
general  facts  are  calculated  to  excite  the  minds  of  holders  extrava- 
gantly, and  cause  loss  and  disaster  by  inducing  them  to  hold  for 
exorbitant  prices.  The  lesson  of  former  years  showed  that  first 
sellers  did  best." 

Bearing  in  mind  what  we  had  said  of  'the  exaggeration  of  the 
English  reports,  it  will  be  obvious  that  the  estimated  wants  were 
three  times  what  was  actually  imported,  and  France  imported  about 
one-fourth  of  the  estimates. 

Such  was  the  state  of  affairs  in  1853,  and  the  description  will  answer 
pretty  well  for  the  present  prospect.  .  .  . 

C.  Exportation  of  Indian  Corn,  1820-1860  l 

Although  Indian  corn  was  not  as  large  an  export  commodity  before  1860  as 
wheat  or  cotton,  it  was  of  considerable  importance  and  growing.  Its  place  in  the 
foreign  commerce  of  the  United  States  was  as  follows: 

In  the  year  1816  the  crop  of  Indian  corn  was  very  generally  cut  off 
throughout  the  northern  states  by  frequent  and  severe  frosts,  so  that 
as  a  cultivated  crop  it  fell  into  disrepute  in  many  sections,  and  was 
cultivated  less  for  some  years,  by.  individual  farmers,  till  its  intrinsic 
importance  as  a  sure  and  reliable  crop  brought  it  gradually  into  favor. 
At  the  time  it  was  first  included  in  the  United  States  census,  in  1840, 
the  aggregate  yield  of  the  country  was  377,531,875,  or  nearly  four 
hundred  millions  bushels.  In  1850  it  had  reached  within  a  frac- 
tion of  six  hundred  millions,  being  returned  as  592,071,104,  occu- 
pying 31,000,000  of  acres.  The  value  of  this  enormous  crop  was 
$296,034,552.  This  was  a  gain  of  57  per  cent.,  or  214,539,229  bushels, 
while  the  increase  of  population  during  the  same  period  was  only  35 
per  cent.  According  to  the  estimate  of  the  secretary  of  the  treasury, 
the  crop  of  Indian  corn  in  1855  was  between  seven  and  eight  hundred 
millions,  or  nearly  double  that  of  1840.  But  this  estimate  was 
entirely  too  low,  the  crop  being  the  largest  and  best  that  year 
that  had  ever  been  raised  in  the  country,  and  amounting,  at  least,  to 
1,000,000,000  bushels,  and  its  value,  at  a  low  estimate,  was 
$400,000,000. 

We  see,  therefore,  on  reference  to  the  census,  that  this  crop  formed 
about  three-sixteenths  of  the  whole  agricultural  product  of  the  country 
in  1850,  and  that  the  proportion  of  improved  land  devoted  to  corn 


Eighty  Years'  Progress.     By  Charles  L.  Flint  (Hartford,  1869),  70-1. 


FOREIGN   COMMERCE 


443 


was  .333,  while  the  number  of  bushels  to  each  person  in  the  country 
was  25.53. 

From  the  amounts  of  corn  stated  above,  as  raised  in  1840  and  in 
1850,  it  will  be  seen  that  we  had  a  very  large  surplus  over  and  above 
what  we  needed  for  home  consumption;  though  it  must  be  evident 
that  vast  quantities  are,  and  must  be  required  to  feed  to  the  large 
number  of  cattle  and  swine,  which  we  have  seen  are  annually  prepared 
for  the  shambles.  It  appears  from  official  statistics  that  the  exporta- 
tion of  Indian  corn  has  rapidly  increased  since  1820,  when  it  amounted 
to  only  607,277  bushels,  valued  at  $261,099,  and  131,669  barrels  of 
Indian  meal,  valued  at  $345,180,  making  an  aggregate  of  $616,279. 
In  1830-1  the  number  of  bushels  of  corn  exported  from  the  country 
was  571,312,  valued  at  $396,617,  and  207,604  barrels  of  Indian  meal, 
valued  at  $595,434.  In  1840-1  the  number  of  bushels  of  corn  ex- 
ported was  535,727,  valued  at  $312,954,  with  232,284  barrels  of  meal, 
worth  $682,457. 

But  in  1845-6  the  amount  rose  to  1,826,068  bushels,  valued  at 
$1,186,663;  and  from  that  in  1846-7  to  16,326,050  bushels  of  corn, 
worth  $14,395,212.  The  next  year,  1847-8,  it  reached  nearly  six 
millions  of  bushels;  and  in  1848-9  to  upward  of  thirteen  millions, 
valued  at  $7,966,369. 

The  amount  of  Indian  corn  and  Indian  meal  exported  from  the 
country  from  1851  to  1858  may  be  seen  as  follows: — 


Bush,  of 
corn 

Value 

Bbls.  of  In- 
dian meal 

Value 

1851  .  . 

3,426,81  1 

$1,762,549 

203,622 

$    622,866 

1852.  . 

2,627,075 

1,540,225 

181,105 

574,380 

i8ss--. 

2,274,909 

1,374,077 

212,118 

709,974 

1854  

7,768,816 

6,074,277 

257,403 

1,002,976 

1855.  . 

7,807,585 

6,961,571 

267,208 

1,237,122 

18156.  . 

10,292,280 

7,622,565 

293,607 

1,175,688 

1857  

5,505,318 

5,184,666 

267,504 

957,791 

1858  

4,766,145 

3,259,039 

237,637 

877,692 

The  amount  of  exports  is,  of  course,  regulated  very  much  by  for- 
eign demand.  If  breadstuffs  are  scarce  in  Europe  and  prices  high, 
they  are  immediately  shipped  from  this  country  to  take  advantage  of 
the  market.  If  the  reverse  is  the  case,  and  prices  are  low,  our  surplus 
is  kept  at  home.  It  is  but  a  few  years  since  the  foreign  demand  for 


444  READINGS  IN  ECONOMIC  HISTORY 

breads  tuffs  began  to  any  extent.  Now  and  then  would  occur  a  year 
of  unusual  scarcity,  to  be  sure,  but  it  was  rare  to  find  any  extensive 
demand  year  after  year  for  our  surplus  products.  The  increase  of 
population  beyond  the  point  of  capacity  to  produce,  in  Great  Britain 
and  the  continent  of  Europe,  now  gives  the  bread  question  an  im- 
portance paramount  to  all  others  with  the  European  statesman,  and 
it  is  having  and  will  have  a  powerful  influence  on  our  agriculture. 
Consumption  has  overtaken  production  —  got  beyond  it,  in  fact,  in 
some  of  the  countries  of  Europe  —  and  henceforth  importation  must 
supply  an  ever  increasing  demand,  since,  however  much  the  agri- 
cultural production  of  western  Europe  may  increase  by  the  improv- 
ing condition  of  its  agriculture,  it  cannot  hereafter  keep  up  with  the 
natural  increase  of  population,  which,  at  the  present  time,  in  Great 
Britain,  is  at  the  rate  of  a  thousand  per  day.  This  crowding  popula- 
tion will  appear  in  its  true  light,  in  an  agricultural  point  of  view, 
when  it  is  considered  that  if  the  United  States  and  its  territories  were 
as  thickly  populated  as  Great  Britain,  they  would  contain  about 
750,000,000  of  people,  a  number  nearly  equal  to  the  whole  population 
of  the  globe. 

The  year  1824,  it  is  asserted  by  some,  was  the  turning  point  at 
which  consumption  overtook  and  exceeded  production  in  England. 
Since  that  time  the  agricultural  production  of  Great  Britain  has  been 
vastly  increased  by  the  improvement  of  agriculture  and  live  stock; 
but  great  and  perceptible  as  improvement  has  been,  it  has  not,  and 
cannot  fully  supply  its  overgrown  population.  The  famine  in  Ireland 
in  1847,  causing  the  loss  of  half  a  million  of  lives  by  starvation,  and 
the  political  revolution  which  soon  followed  on  the  continent  in  1848, 
growing  out,  to  a  great  extent,  of  a  short  supply  of  food,  are  fresh  in 
the  minds  of  everyone. 

Now  this  surplus  of  population  and  the  consequent  permanent 
demand  for  the  productions  of  our  soil  are  of  comparatively  recent 
date,  and  we  have  hardly,  even  yet,  begun  to  realize  their  importance 
and  the  influence  which  they  are  hereafter  to  exert  in  developing  the 
resources  of  our  soil.  It  was  only  a  century  ago  (1756)  when 
D'Anqueville,  a  political  economist  of  France,  said:  " England  could 
grow  corn  enough  in  one  year  to  supply  herself  for  four."  Now, 
though  she  has,  at  least,  three  times  as  much  land  under  cultivation 
as  then,  and  though  the  yield  of  her  products  to  the  acre  has  been  more 
than  doubled,  yet  she  imports  food  in  the  shape  of  corn,  wheat,  oats, 
meal,  and  flour  to  the  extent  of  more  than  £45,000,000,  or  $225,000,000. 
Now,  though  western  Europe  has  been  supplied,  to  a  large  extent, 


FOREIGN   COMMERCE  445 

from  Russia  and  other  parts  of  the  world,  it  is  becoming  more  and 
more  evident  that  it  has  got  to  look  more  and  more  to  this  country 
for  its  supplies,  and  this  fact  is  recognized  by  many  of  the  leading 
journals  and  statesmen  of  Europe,  as,  for  instance,  the  Mark  Lane 
Gazette,  which  says:  "One  fact  is  clear,  that  it  is  to  western  America 
that  we  must,  in  future,  look  for  the  largest  amount  of  cereal 
produce." 


CHAPTER  XIV 
PUBLIC  LANDS  AND  AGRICULTURE,  1820-1860 

I.  THE  PUBLIC  DOMAIN 

Extent  and  Importance,  1832  l 

Before  the  Civil  War,  and  even  afterward,  Congress  repeatedly  legislated  re- 
garding the  public  lands.  These  lands  were  the  common  property  of  the  states 
and  tended  to  hold  them  together  by  a  common  interest.  At  the  same  time  the 
public  land  question  is  ultimately  linked  with  the  slavery  question,  for  it  was  the 
desire  of  each  section  to  exclude  the  other  from  the  territories  that  brought  about 
so  much  controversy. 

At  the  beginning  of  its  land  policy,  Congress  thought  more  of  the  revenue  to 
be  derived  than  the  good  to  be  extended.  In  time,  however,  this  policy  underwent 
a  change.  The  price  of  land  was  reduced,  the  minimum  size  of  entry  was  decreased, 
and  the  settlers  encouraged  in  other  ways  to  take  up  land.  To  facilitate  this  move- 
ment, many  of  the  states  requested  the  federal  government  to  grant  to  them  the 
unentered  lands  lying  within  their  borders.  This  agitation,  coupled  with  the  one 
for  a  reduction  in  the  price  per  acre,  occupied  the  attention  of  Congress  in  1831-2. 
Mr.  Clay,  as  chairman  of  the  senate  committee  on  manufactures,  reported  in 
part  on  the  public  domain  as  follows: 

At  the  commencement  of  the  revolutionary  war,  there  were,  in 
some  of  the  States,  large  bodies  of  waste  and  unappropriated  lands, 
principally  west  of  the  Alleghany  mountains,  and  in  the  southern 
or  southwestern  quarters  of  the  Union;  whilst  in  others,  of  more 
circumscribed  or  better  denned  limits,  no  such  resource  existed.  Dur- 
ing the  progress  of  that  war,  the  question  wras  agitated  what  should 
be  done  with  these  lands  in  the  event  of  its  successful  termination? 
That  question  was  likely  to  lead  to  paralyzing  divisions  and  jealousies. 
The  States  not  containing  any  considerable  quantity  of  waste  lands, 
contended  that,  as  the  war  was  waged  with  united  means,  writh  equal 
sacrifices,  and  at  the  common  expense,  the  waste  lands  ought  to  be 
considered  as  a  common  property,  and  not  be  exclusively  appro- 
priated to  the  benefit  of  the  particular  States  within  which  they  hap- 
pened to  be  situated.  These,  however,  resisted  the  claim,  upon  the 

1  Senate  Committee  Report.     Henry  Clay,  chairman.     Printed  in  House  Reports, 
1831-2  (Washington,  1831  [1832?^]),  Ill,  Report  448,  pp.  14-17,  19-26. 


PUBLIC  LANDS  AND  AGRICULTURE  447 

ground  that  each  State  was  entitled  to  the  whole  of  the  territory, 
whether  waste  or  cultivated,  included  within  its  chartered  limits. 
To  check  the  progress  of  discontent,  and  arrest  the  serious  conse- 
quences to  which  the  agitation  of  this  question  might  lead,  Congress 
recommended  to  the  States  to  make  liberal  cessions  of  the  waste  and 
unseated  lands  to  the  United-  States;  and,  on  the  loth  day  of  October, 
1780,  "Resolved,  That  the  unappropriated  lands  that  may  be  ceded 
or  relinquished  to  the  United  States,  by  any  particular  State,  pursuant 
to  the  recommendation  of  Congress  of  the  6th  day  of  September 
last,  shall  be  disposed  of  for  the  common  benefit  of  the  United  States," 
&c.  .  .  . 

The  other  source  whence  the  public  lands  of  the  United  States 
have  been  acquired,  are,  ist,  the  treaty  of  Louisiana,  concluded  in 
1803;  and,  2dly,  the  treaty  of  Florida,  signed  in  1819.  By  the  first, 
all  the  country  west  of  the  Mississippi,  and  extending  to  the  Pacific 
ocean,  known  as  Louisiana,  which  had  successively  belonged  to  France, 
Spain,  and  France  again,  including  the  island  of  New  Orleans,  and 
stretching  east  of  the  Mississippi  to  the  Perdido,  was  transferred  to 
the  United  States  in  consideration  of  the  sum  of  fifteen  millions  of 
dollars,  which  they  stipulated  to  pay,  and  have  since  punctually 
paid,  to  France,  besides  other  conditions  deemed  favorable  and  im- 
portant to  her  interests.  By  the  treaty  of  Florida,  both  the  provinces 
of  East  and  West  Florida,  whether  any  portion  of  them  was  or  was 
not  actually  comprehended  within  the  true  limits  of  Louisiana,  were 
ceded  to  the  United  States  in  consideration,  besides  other  things, 
of  the  payment  of  five  millions  of  dollars  which  they  agreed  to  pay, 
and  have  since  accordingly  paid. 

The  large  pecuniary  considerations  thus  paid  to  these  two  foreign 
powers  were  drawn  from  the  Treasury  of  the  people  of  the  United 
States;  and,  consequently,  the  countries  for  which  they  formed  the 
equivalents  ought  to  be  held  and  deemed  for  the  common  benefit  of 
all  the  people  of  the  United  States.  To  divert  the  lands  from  that 
general  object;  to  misapply  or  sacrifice  them ;  to  squander  or  imp rovi- 
dently  cast  them  away;  would  be  alike  subversive  of  the  interests 
of  the  people  of  the  United  States,  and  contrary  to  the  plain  dictates 
of  the  duty  by  which  the  General  Government  stands  bound  to  the 
States  and  to  the  whole  people. 

Prior  to  the  treaties  of  Louisiana  and  Florida,  Congress  had  adopted 
a  system  for  surveying  and  selling  the  public  lands,  devised  with  much 
care  and  great  deliberation,  the  advantages  of  which  having  been 
fully  tested  by  experience,  it  was  subsequently  applied  to  the  coun- 


448  READINGS  IN  ECONOMIC  HISTORY 

tries  acquired  by  those  treaties.  According  to  that  system,  all  public 
lands  offered  for  sale,  are  previously  accurately  surveyed,  by  skilful 
surveyors,  in  ranges  of  townships  of  six  miles  square  each,  which 
townships  are  subdivided  into  thirty-six  equal  divisions  or  square 
miles,  called  sections,  by  lines  crossing  each  other  at  right  angles,  and 
generally  containing  640  acres.  These  sections  are  again  divided  into 
quarters,  and,  prior  to  the  year  1820,  no  person  could  purchase  a  less 
quantity  than  a  quarter.  In  that  year,  provision  was  made  for  the 
further  division  of  the  sections  into  eighths,  thereby  allowing  a  pur- 
chaser to  buy  only  eighty  acres,  if  he  wished  to  purchase  no  more. 
During  the  present  session  of  Congress,  further  to  extend  accommo- 
dations to  the  purchasers  of  the  public  lands,  and  especially  to  the 
poorer  classes,  the  sections  have  been  again  divided  into  sixteenths, 
admitting  a  purchase  of  only  forty  acres.  .  .  . 

.  .  .  [I]t  appears  that  the  aggregate  of  all  sums  of  money  which 
have  been  expended  by  the  United  States  in  the  acquisition  of  the 
public  lands,  including  interest  on  account  of  the  purchases  of  Loui- 
siana and  Florida,  up  to  the  3oth  day  of  September,  1831,  and  includ- 
ing also  expenses  in  their  sale  and  management,  is  $48,077,551  40; 
and  the  amount  of  money  received  at  the  Treasury  for  proceeds  of 
the  sales  of  the  public  lands  to  the  3oth  September,  1831,  is  $37,- 
272,713  31.  The  Government,  therefore,  has  not  been  reimbursed 
by  $10,804,8383^.  According  to  the  same  report,  it  appears  that 
the  estimated  amount  of  unsold  lands,  on  which  the  foreign  and 
Indian  titles  have  been  extinguished,  is  227,293,884  within  the  limits 
of  the  new  States  and  Territories;  and  that  the  Indian  title  remains 
on  113,577,869  acres  within  the  same  limits.  That  there  have  been 
granted  to  Ohio,  Indiana,  Illinois,  and  Alabama,  for  internal  improve- 
ments, 2,187,665  acres;  for  colleges,  academies  and  universities  in 
the  new  States  and  Territories,  the  quantity  of  508,009;  for  education, 
being  the  thirty-sixth  part  of  the  public  lands  appropriated  for  common 
schools,  the  amount  of  7,952,538  acres;  and  for  seats  of  Government 
in  some  of  the  new  States  and  Territories,  21,589  acres.  By  a  report 
of  the  Commissioner  of  the  General  Land  Office,  communicated  to 
Congress  with  the  annual  message  of  the  President  of  the  United 
States  in  December,  1827,  the  total  quantity  of  the  public  lands,  be- 
yond the  boundaries  of  the  new  States  and  Territories,  was  estimated 
to  be  750,000,000.  The  aggregate,  therefore,  of  all  the  unsold  and 
unappropriated  public  lands  of  the  United  States,  surveyed  and  un- 
surveyed,  on  which  the  Indian  title  remains  or  has  been  extinguished, 
lying  within,  and  without  the  boundaries  of  the  new  States  and  Terri- 


PUBLIC  LANDS  AND  AGRICULTURE  449 

tones,  agreeably  to  the  two  reports  now  referred  to,  is  1,000,871,753 
acres.  There  had  been  138,988,224  acres  surveyed,  and  the  quan- 
tity only  of  19,239,412  acres  sold  up  to  the  ist  January, 
1826.  .  .  . 

The  Government  is  the  proprietor  of  much  the  largest  quantity  of 
the  unseated  lands  of  the  United  States.  What  it  has  in  market, 
bears  a  large  proportion  to  the  whole  of  the  occupied  lands  within 
their  limits.  If  a  considerable  quantity  of  any  article,  land,  or  any 
commodity  whatever,  is  in  market,  the  price  at  which  it  is  sold  will 
affect,  in  some  degree,  the  value  of  the  whole  of  that  article,  whether 
exposed  to  sale  or  not.  The  influence  of  a  reduction  of  the  price  of 
the  public  lands  would  probably  be  felt  throughout  the  Union;  cer- 
tainly in  all  the  western  States,  and  most  in  those  which  contain,  or 
are  nearest  to,  the  public  lands.  There  ought  to  be  the  most  cogent 
and  conclusive  reasons  for  adopting  a  measure  which  might  seriously 
impair  the  value  of  the  property  of  the  yeomanry  of  the  country. 
Whilst  it  is  decidedly  the  most  important  class  in  the  community,  most 
patient,  patriotic,  and  acquiescent  in  whatever  public  policy  is  pur- 
sued, it  is  unable  or  unwilling  to  resort  to  those  means  of  union  and 
concert  which  other  interests  employ  to  make  themselves  heard  and 
respected.  Government  should,  therefore,  feel  itself  constantly  bound 
to  guard,  with  sedulous  care,  the  rights  and  welfare  of  the  great  body 
of  our  yeomanry.  Would  it  be  just  towards  those  who  have  hereto- 
fore purchased  public  lands  at  higher  prices,  to  say  nothing  as  to  the 
residue  of  the  agricultural  interest  of  the  United  States,  to  make  such 
a  reduction,  and  thereby  impair  the  value  of  their  property?  Ought 
not  any  such  plan  of  reduction,  if  adopted,  to  be  accompanied 
with  compensation  for  the  injury  which  they  would  inevitably 
sustain? 

A  material  reduction  of  price  would  excite  and  stimulate  the  spirit 
of  speculation,  now  dormant,  and  probably  lead  to  a  transfer  of  vast 
quantities  of  the  public  domain  from  the  control  of  Government  to 
the  hands  of  the  speculator.  At  the  existing  price,  and  with  such 
extensive  districts  as  the  public  constantly  offers  in  the  market,  there 
is  no  great  temptation  to  speculation.  The  demand  is  regular,  keeping 
pace  with  the  progress  of  emigration,  and  is  supplied  on  known  and 
moderate  terms.  If  the  price  were  much  reduced,  the  strongest 
incentives  to  engrossment  of  the  better  lands  would  be  presented  to 
large  capitalists;  and  the  emigrant,  instead  of  being  able  to  purchase 
from  his  own  Government  upon  uniform  and  established  conditions, 
might  be  compelled  to  give  much  higher  and  more  fluctuating  prices 


450  READINGS  IN  ECONOMIC  HISTORY 

to  the  speculator.  An  illustration  of  this  effect  is  afforded  by  the 
military  bounty  lands  granted  during  the  late  war.  Thrown  into 
the  market  at  prices  below  the  Government  rate,  they  notoriously 
became  an  object  of  speculation,  and  have  principally  fallen  into  the 
hands  of  speculators,  retarding  the  settlement  of  the  districts  which 
include  them. 

The  greatest  emigration  that  is  believed  now  to  take  place  from 
any  of  the  States,  is  from  Ohio,  Kentucky,  and  Tennessee.  The 
effects  of  a  material  reduction  in  the  price  of  the  public  lands,  would 
be,  i st.  To  lessen  the  value  of  real  estate  in  those  three  States.  2d. 
To  diminish  their  interest  in  the  public  domain,  as  a  common  fund 
for  the  benefit  of  all  the  States.  And,  3dly.  To  offer  wrhat  would 
operate  as  a  bounty  to  further  emigration  from  those  States,  occasion- 
ing more  and  more  lands,  situated  within  them,  to  be  thrown  into 
the  market,  thereby  not  only  lessening  the  value  of  their  lands,  but 
draining  them  both  of  their  population  and  currency. 

And,  lastly,  Congress  has,  within  a  few  years,  made  large  and 
liberal  grants  of  the  public  lands  to  several  States.  To  Ohio,  922,937 
acres;  to  Indiana,  384,728  acres;  to  Illinois,  480,000  acres;  and  to 
Ala'bama,  400,000  acres;  amounting,  together,  to  2,187,665  acres. 
Considerable  portions  of  these  lands  yet  remain  unsold.  The  reduc- 
tion of  the  price  of  the  public  lands,  generally,  would  impair  the  value 
of  those  grants,  as  well  as  injuriously  affect  that  of  the  lands  which 
have  been  sold  in  virtue  of  them. 

On  the  other  hand,  it  is  inferred  and  contended,  from  the  large 
amount  of  public  land  remaining  unsold  after  having  been  so  long 
exposed  to  sale,  that  the  price  at  which  it  is  held  is  too  high.  But 
this  apparent  tardiness  is  satisfactorily  explained  by  the  immense 
quantity  of  public  lands  which  have  been  put  into  the  market  by 
Government.  It  is  well  known  that  the  new  States  have  constantly 
and  urgently  pressed  the  extinction  of  the  Indian  title  upon  lands 
within  their  respective  limits;  and,  after  its  extinction,  that  they 
should  be  brought  into  market  as  rapidly  as  practicable.  The  liberal 
policy  of  the  General  Government,  coinciding  with  the  wishes  of  the 
new  States,  has  prompted  it  to  satisfy  the  wants  of  emigrants  from 
every  part  of  the  Union,  by  exhibiting  vast  districts  of  land  for  sale 
in  all  the  States  and  Territories,  thus  offering  every  variety  of  climate 
and  situation  to  the  free  choice  of  settlers.  From  these  causes,  it 
has  resulted  that  the  power  of  emigration  has  been  totally  incompe- 
tent to  absorb  the  immense  bodies  of  waste  lands  offered  in  the  market. 
For  the  capacity  to  purchase  is,  after  all,  limited  by  the  emigration, 


PUBLIC  LANDS  AND   AGRICULTURE  451 

and  the  progressive  increase  of  population.  If  the  quantity  thrown 
into  the  market  had  been  quadrupled,  the  probability  is  that  there 
would  not  have  been  much  more  annually  sold  than  actually  has  been. 
With  such  extensive  fields  for  selection  before  them,  purchasers, 
embarrassed  as  to  the  choice  which  they  should  make,  are  sometimes 
probably  influenced  by  caprice  or  accidental  causes.  Whilst  the 
better  lands  remain,  those  of  secondary  value  will  not  be  purchased. 
A  judicious  farmer  or  planter  would  sooner  give  one  dollar  and 
a  quarter  per  acre  for  first  rate  land,  than  receive,  as  a  donation, 
land  of  an  inferior  quality,  if  he  were  compelled  to  settle 
upon  it.  ... 

Is  the  reduction  of  the  price  of  the  public  lands  necessary  to 
accelerate  the  settlement  and  population  of  the  States  within  which 
they  are  situated?  Those  States  are  Ohio,  Indiana,  Illinois,  Mis- 
souri, Alabama,  Mississippi,  and  Louisiana.  If  their  growth  has  been 
unreasonably  slow  and  tardy,  we  may  conclude  that  some  fresh 
impulse,  such  as  that  under  consideration,  is  needed.  Prior  to  the 
treaty  of  Greenville,  concluded  in  1795,  there  were  but  few  settlements 
within  the  limits  of  the  present  State  of  Ohio.  Principally  since 
that  period,  that  is,  within  a  term  of  about  forty  years,  that  State, 
from  a  wilderness,  the  haunt  of  savages  and  wild  beasts,  has  risen 
into  a  powerful  commonwealth,  containing,  at  this  time,  a  population 
of  a  million  of  souls,  and  holding  the  third  or  fourth  rank  among  the 
largest  States  in  the  Union.  During  the  greater  part  of  that  term, 
the  minimum  price  of  the  public  lands  was  two  dollars  per  acre;  and 
of  the  large  quantity  with  which  the  settlement  of  that  State  com- 
menced, there  only  remain  to  be  sold  5,586,834  acres. 

The  aggregate  population  of  the  United  States,  exclusive  of  the 
Territories,  increased  from  the  year  1820  to  1830,  from  9,579,873  to 
12,716,697.  The  rate  of  the  increase,  during  the  whole  term  of  ten 
years,  including  a  fraction,  may  be  stated  at  thirty-three  per  cent. 
The  principle  of  population  is  presumed  to  have  full  scope  generally 
in  all  parts  of  the  United  States.  Any  State,  therefore,  which  has 
exceeded  or  fallen  short  of  that  rate,  may  be  fairly  assumed  to  have 
gained  or  lost  by  emigration,  nearly  to  the  extent  of  the  excess  or 
deficiency.  From  a  table  accompanying  this  report,  the  Senate  will 
see  presented  various  interesting  views  of  the  progress  of  population 
in  the  several  States.  In  that  table,  it  will  be  seen  that  each  of  eleven 
States  exceeded,  and  each  of  thirteen  fell  short  of  an  increase  at  the 
average  rate  of  thirty-three  per  cent.  The  greatest  increase,  during 
the  term,  was  in  the  State  of  Illinois,  where  it  was  one  hundred  and 


452  READINGS  IN  ECONOMIC  HISTORY 

eighty-five  per  cent.,  or  at  the  rate  of  18^  per  cent,  per  annum;  and 
the  least  was  in  Delaware,  where  it  was  less  than  six  per  cent.  The 
seven  States  embracing  the  public  lands,  had  a  population,  in  1820, 
of  1,207,165,  and,  in  1830,  2,238,802,  exhibiting  an  average  increase 
of  85  per  cent.  The  seventeen  States  containing  no  part  of  the 
public  lands,  had  a  population,  in  1820,  of  8,372,707,  and,  in  1830, 
of  10,477,895,  presenting  an  average  increase  of  only  25  per  cent. 
The  thirteen  States,  whose  increase,  according  to  the  table,  was  be- 
low 33  per  cent,  contained,  in  1820,  a  population  of  5,939,759,  and, 
in  1830,  of  6,966,600,  exhibiting  an  average  increase  of  only  seventeen 
per  cent.  The  increase  of  the  seven  new  States  upon  a  capital  which, 
at  the  commencement  of  the  term,  was  1,207,165,  has  been  greater 
than  that  of  the  thirteen  whose  capital  then  was  5,939,759.  In  three 
of  the  eleven  States,  (Tennessee,  Georgia,  and  Maine,)  whose  popu- 
lation exceeded  the  average  increase  of  33  per  cent.,  there  were  public 
lands  belonging  to  those  States;  and,  in  the  fourth,  (New  York,) 
the  excess  is  probably  attributable  to  the  rapid  growth  of  the  city  of 
New  York,  to  waste  lands  in  the  western  part  of  that  State,  and  to  the 
great  development  of  its  vast  resources  by  means  of  extensive  internal 
improvements.  .  .  . 

Complaints  exist  in  the  new  States,  that  large,  bodies  of  lands,  in 
their  respective  territories,  being  owned  by  the  General  Government, 
are  exempt  from  taxation  to  meet  the  ordinary  expenses  of  the  State 
Governments,  and  other  local  charges;  that  this  exemption  continues 
for  five  years  after  the  sale  of  any  particular  tract;  and  that  land, 
being  the  principal  source  of  the  revenue  of  those  States,  an  undue 
share  of  the  burthen  of  sustaining  the  expenses  of  the  State  Govern- 
ments falls  upon  the  resident  population.  To  all  these  complaints, 
it  may  be  answered  that,  by  voluntary  compacts  between  the  new 
States  respectively,  and  the  General  Government,  five  per  cent,  of 
the  nett  proceeds  of  all  the  sales  of  the  public  lands,  included  within 
their  limits,  are  appropriated  for  internal  improvements  leading  to 
or  within  those  States;  that  a  section  of  land  in  each  township,  or 
one-thirty-sixth  part  of  the  whole  of  the  public  lands  embraced  within 
their  respective  boundaries,  has  been  reserved  for  purposes  of  educa- 
tion; and  that  the  policy  of  the  General  Government  has  been  uni- 
formly marked  by  great  liberality  towards  the  new  States,  in  making 
various,  and  some  very  extensive  grants  of  the  public  lands  for  local 
purposes.  But,  in  accordance  with  the  same  spirit  of  liberality,  the 
committee  would  recommend  an  appropriation  to  each  of  the  seven 
States  referred  to,  of  a  further  sum  of  ten  per  cent,  on  the  nett  proceeds 


PUBLIC  LANDS   AND   AGRICULTURE  453 

of  the  sales  of  that  part  of  the  public  land  which  lies  within  it,  for 
objects  of  internal  improvement  in  their  respective  limits.  The 
tendency  of  such  an  appropriation  will  be  not  only  to  benefit  those 
States,  but  to  enhance  the  value  of  the  public  lands  remaining  to  be 
sold.  .  .  . 

If  the  proposed  cession  to  the  new  States  were  to  be  made  at  a 
fair  price,  such  as  the  General  Government  could  obtain  from  indi- 
vidual purchasers  under  the  present  system,  there  would  be  no  motive 
for  it,  unless  the  new  States  are  more  competent  to  dispose  of  the  pub- 
lic lands  than  the  common  Government.  They  are  now  sold  under 
one  uniform  plan,  regulated  and  controlled  by  a  single  legislative 
authority,  and  the  practical  operation  is  perfectly  understood.  If 
they  were  transferred  to  the  new  States,  the  subsequent  disposition 
would  be  according  to  laws  emanating  from  various  legislative  sources. 
Competition  would  probably  arise  between  the  new  States  in  the 
terms  which  they  would  offer  to  purchasers.  Each  State  would  be 
desirous  of  inviting  the  greatest  number  of  emigrants,  not  only  for  the 
laudable  purpose  of  populating  rapidly  its  own  territories,  but  with 
the  view  to  the  acquisition  of  funds  to  enable  it  to  fulfil  its  engage- 
ments to  the  General  Government.  Collisions  between  the  States 
would  probably  arise,  and  their  injurious  consequences  may  be  imag- 
ined. A  spirit  of  hazardous  speculation  would  be  engendered.  Va- 
rious schemes  in  the  new  States  would  be  put  afloat  to  sell  or  divide  the 
public  lands.  Companies  and  combinations  would  be  formed  in  this 
country,  if  not  in  foreign  countries,  presenting  gigantic  and  tempting, 
but  delusive  projects;  and  the  history  of  legislation,  in  some  of  the 
States  of  the  Union,  admonishes  us  that  a  too  ready  ear  is  some- 
times given  by  a  majority,  in  a  legislative  assembly,  to  such 
projects. 

A  decisive  objection  to  such  a  transfer  for  a  fair  equivalent,  is,  that 
it  would  establish  a  new  and  dangerous  relation  between  the  General 
Government  and  the  new  States.  In  abolishing  the  credit  which 
had  been  allowed  to  purchasers  of  the  public  lands  prior  to  the  year 
1820,  Congress  was  principally  governed  by  the  consideration  of  the 
inexpediency  and  hazard  of  accumulating  a  large  amount  of  debt  in 
the  new  States,  all  bordering  on  each  other.  Such  an  accumulation 
was  deemed  unwise  and  unsafe.  It  presented  a  new  bond  of  interest, 
of  sympathy,  and  of  union,  partially  operating  to  the  possible  preju- 
dice of  the  common  bond  of  the  whole  Union.  But  that  debt  was 
a  debt  due  from  individuals,  and  it  was  attended  with  this  encouraging 
security,  that  purchasers,  as  they  successively  completed  the  payments 


454  READINGS  IN  ECONOMIC  HISTORY 

for  their  lands,  would  naturally  be  disposed  to  aid  the  Government 
in  enforcing  payment  from  delinquents.  The  project,  which  the 
committee  are  now  considering,  is,  to  sell  to  the  States,  in  their  sover- 
eign character,  and,  consequently,  to  render  them  public  debtors  to 
the  General  Government  to  an  immense  amount.  This  would  in- 
evitably create  between  the  debtor  States  a  common  feeling,  and  a 
common  interest,  distinct  from  the  rest  of  the  Union.  These  States 
are  all  in  the  western  and  southwestern  quarter  of  the  Union,  remotest 
from  the  centre  of  federal  power.  The  debt  would  be  felt  as  a  load 
from  which  they  would  constantly  be  desirous  to  relieve  themselves; 
and  it  would  operate  as  a  strong  temptation,  weakening,  if  not 
dangerous,  to  the  existing  confederacy.  .  .  . 

If  the  proposed  cession  be  made  for  a  price  merely  nominal,  it 
would  be  contrary  to  the  express  conditions  of  the  original  cessions 
from  primitive  States  to  Congress,  and  contrary  to  the  obligations 
which  the  General  Government  stands  under  to  the  whole  people 
of  the  United  States,  arising  out  of  the  fact  that  the  acquisitions  of 
Louisiana  and  Florida,  and  from  Georgia,  were  obtained  at  a  great 
expense,  borne  from  the  common  treasure,  and  incurred  for  the  com- 
mon benefit.  Such  a  gratuitous  cession  could  not  be  made  without 
a  positive  violation  of  a  solemn  trust,  and  without  manifest  injustice 
to  the  old  States.  And  its  inequality  among  the  new  States  would 
be  as  marked  as  its  injustice  to  the  old  would  be  indefensible.  Thus, 
Missouri,  with  a  population  of  140,455,  would  acquire  38,291,152  acres; 
and  the  State  of  Ohio,  with  a  population  of  935,884,  would  obtain 
only  5,586,834  acres.  Supposing  a  division  of  the  land  among  the 
citizens  of  those  two  States  respectively,  the  citizen  of  Ohio  would 
obtain  less  than  six  acres  for  his  share,  and  the  citizen  of  Missouri 
upwards  of  two  hundred  and  seventy- two  acres  as  his  proportion. 

Upon  full  and  thorough  consideration,  the  committee  have  come 
to  the  conclusion,  that  it  is  inexpedient  either  to  reduce  the  price  of 
the  public  lands,  or  to  cede  them  to  the  new  States.  They  believe, 
on  the  contrary,  that  sound  policy  coincides  with  the  duty  which  has 
devolved  on  the  General  Government  to  the  whole  of  the  States,  and 
the  whole  of  the  people  of  the  Union,  and  enjoins  the  preservation  of 
the  existing  system  as  having  been  tried  and  approved  after  long  and 
triumphant  experience.  But,  in  consequence  of  the  extraordinary 
financial  prosperity  which  the  United  States  enjoy,  the  question  merits 
examination,  whether,  whilst  the  General  Government  steadily  re- 
tains the  control  of  this  great  national  resource  in  its  own  hands,  after 
the  payment  of  the  public  debt,  the  proceeds  of  the  sales  of  the  public 


PUBLIC  LANDS  AND   AGRICULTURE  455 

lands,  no  longer  needed  to  meet  the  ordinary  expenses  of  Government, 
may  not  be  beneficially  appropriated  to  some  other  objects  for  a  lim- 
ited time?  .  .  . 

The  inquiry  remains,  what  ought  to  be  the  specific  application  of 
the  fund  under  the  restriction  stated?  After  deducting  the  ten  per 
cent,  proposed  to  be  set  apart  for  the  new  States,  a  portion  of  the 
committee  would  have  preferred  that  the  residue  should  be  applied 
to  the  objects  of  internal  improvement,  and  colonization  of  the  free 
blacks,  under  the  direction  of  the  General  Government.  But  a 
majority  of  the  committee  believes  it  better,  as  an  alternative  for  the 
scheme  of  cession  to  the  new  States,  and  as  being  most  likely  to  give 
general  satisfaction,  that  the  residue  be  divided  among  the  twenty- 
four  States,  according  to  their  federal  representative  population,  to 
be  applied  to  education,  internal  improvement,  or  colonization,  or 
to  the  redemption  of  any  existing  debt  contracted  for  internal  improve- 
ments, as  each  State,  judging  for  itself,  shall  deem  most  conformable 
with  its  own  interests  and  policy.  .  .  . 

II.  THE  PUBLIC  LANDS  AND  WAGES 

A.   Secretary  Walker  on  the  Public  Lands,  1845  l 

The  ease  with  which  public  land  could  be  acquired  by  the  people  had  an  im- 
portant influence  on  American  industry.  Practically  every  employee,  whether  he 
worked  in  town  or  on  the  land,  was  a  potential  land  owner,  and  should  he  at  any 
time  become  dissatisfied  with  conditions  he  had  the  opportunity  of  turning  to  the 
land.  Such  a  situation  tended  to  make  wages  relatively  high  in  all  kinds  of  in- 
dustries. Furthermore,  it  held  out  to  the  day  worker  the  opportunity  of  becoming 
his  own  master  by  taking  up  and  cultivating  the  soil.  Because  of  this  possibility 
of  escape  to  the  land,  labor  was  generally  prosperous,  and  the  labor  troubles  of  a 
later  date  were  yet  unknown. 

Connected  with  this  department,  and  the  finances,  is  the  question 
of  the  sales  of  the  public  lands.  The  proceeds  of  these  sales,  it  is 
believed,  should  continue  to  constitute  a  portion  of  the  revenue, 
diminishing  to  that  extent  the  amount  required  to  be  raised  by  the 
tariff.  The  net  proceeds  of  these  sales  paid  into  the  treasury  during 
the  last  fiscal  year,  was  $2,077,022  30;  and  from  the  first  sales  in  1787 
up  to  the  3oth  of  September  last,  was  $118,607,335  91.  The  average 
annual  sales  have  been  much  less  than  2,000,000  of  acres;  yet  the 
aggregated  net  proceeds  of  the  sales  in  1834,  1835,  1836,  and  1837, 
was  $51,268,617  82.  Those  large  sales  were  almost  exclusively  for 

1  Treasury  Report,  1845  (Washington,  1846),  15-16. 


456 

speculation;  and  this  can  only  be  obviated,  at  all  times,  by  confining 
the  sales  to  settlers  and  cultivators  in  limited  quantities,  sufficient 
for  farms  or  plantations.  The  price  at  which  the  public  lands  should 
be  sold  is  an  important  question  to  the  whole  country,  but  especially 
to  the  people  of  the  new  States,  living  mostly  remote  from  the  sea- 
board, and  who  have  scarcely  felt  the  presence  of  the  government 
in  local  expenditures,  but  chiefly  in  the  exhaustion  of  their  means  for 
purchases  of  public  lands  and  for  customs.  The  public  lands  are  not 
of  the  same  value;  yet  they  are  all  fixed  at  one  unvarying  price,  which 
is  far  above  the  value  of  a  large  portion  of  these  lands.  The  quantity 
now  subject  to  entry  at  the  minimum  price  of  $i  25  per  acre  is  133,- 
307,457  acres,  and  109,035,345  in  addition,  to  which  the  Indian  title 
has  been  extinguished — being  an  aggregate  of  242,342,802  acres, 
and  requiring  a  century  and  a  quarter  to  complete  the  sales  at  the 
rate  they  have  progressed  heretofore,  without  including  any  of  the 
unsold  lands  of  Texas  or  Oregon,  or  of  the  vast  region  besides  to  which 
the  Indian  title  is  not  yet  extinguished.  It  is  clear,  then,  that  there 
is  a  vast  and  annually-increasing  surplus  of  public  lands,  very  little 
of  which  will  be  sold  within  any  reasonable  period  at  the  present  price, 
and  in  regard  to  which  the  public  interest  would  be  promoted,  and 
the  revenue  augmented,  by  reducing  the  price.  The  reduction  of  the 
price  of  the  public  lands  in  favor  of  settlers  and  cultivators,  would 
enhance  the  wages  of  labor.  It  is  an  argument  urged  in  favor  of  the 
tariff,  that  we  ought  to  protect  our  labor  against  what  is  called 
the  pauper  labor  of  Europe.  But  whilst  the  tariff  does  not  enhance 
the  wages  of  labor,  the  sales  of  the  public  lands  at  low  prices,  and 
in  limited  quantities,  to  settlers  and  cultivators,  would  accom- 
plish this  object.  If  those  who  live  by  the  wages  of  labor  could 
purchase  320  acres  of  land  for  $80,  160  acres  for  $40,  or  80  acres  for 
$20,  or  40  acre  lot  for  $10,  the  power  of  the  manufacturing  capitalist 
in  reducing  the  wages  of  labor  would  be  greatly  diminished;  because, 
when  these  lands  were  thus  reduced  in  price,  those  who  live  by  the 
wages  of  labor  could  purchase  farms  at  these  low  rates,  and  cultivate 
the  soil  for  themselves  and  families,  instead  of  working  for  others 
twelve  hours  a  day  in  the  manufactories.  Reduce  the  price  which 
the  laborer  must  pay  for  the  public  domain ;  bring  thus  the  means  of 
purchase  within  his  power;  prevent  all  speculation  and  monopoly 
in  the  public  lands;  confine  the  sales  to  settlers  and  cultivators,  in 
limited  quantities;  preserve  these  hundreds  of  millions  of  acres,  for 
ages  to  come,  as  homes  for  the  poor  and  oppressed;  reduce  the  taxes, 
by  reducing  the  tariff,  and  bringing  down  the  prices  which  the  poor 


PUBLIC   LANDS  AND   AGRICULTURE  457 

are  thus  compelled  to  pay  for  all  the  necessaries  and  comforts  of  life, 
and  more  will  be  done  for  the  benefit  of  American  labor  than  if  mil- 
lions were  added  to  the  profits  of  manufacturing  capital  by  the  enact- 
ment of  a  protective  tariff. 

B.   Ease  of  Acquisition  of  Public  Lands  in  1832  1 

A  magazine  writer  of  the  times  called  attention  to  the  ease  with  which  a  laborer 
could  acquire  land  for  himself  as  follows: 

A  few  facts  on  this  subject  will  set  this  matter  in  its  true  light. 
Land  is  now  sold  in  tracts  of  80  acres,  at  $i  25  per  acre.  For  100 
dollars,  an  unimproved  tract  of  80  acres  may  be  purchased.  In  any 
of  the  states  west  of  the  Ohio  river,  a  labourer  can  earn  75  cents  per 
day,  and  if  his  living  be  supposed  to  cost  25  cents  a  day,  which  in 
this  plentiful  country  is  a  large  estimate,  he  can,  by  the  labour  of 
two  hundred  days,  or  about  eight  months,  purchase  a  farm.  But  as 
the  working  days  in  a  year,  excluding  bad  weather,  would  not  amount 
to  more  than  200,  it  may  be  safely  asserted,  that  a  labourer  can  pur- 
chase a  tract  of  80  acres,  by  one  year's  steady  labour.  Again,  a  la- 
bourer can  get  his  boarding  and  $10  per  month,  the  year  round, 
which  would  amount  to  $120,  and  if  $20  be  deducted  for  clothing, 
he  will  in  this  way  have  earned  the  purchase  money  of  a  farm,  in  one 
year.  All  kinds  of  stock  can  be  raised  in  that  country  with  facility, 
and  at  little  cost.  A  good  horse  is  worth  fifty  dollars,  a  cow  from  five 
to  eight  dollars,  a  fat  steer  from  ten  to  fifteen,  and  hogs  two  dollars 
per  hundred  pounds.  A  man  then  can  purchase  eighty  acres  of  land, 
by  the  sale  of  two  horses,  or  from  eight  to  twelve  head  of  cattle,  or 
twenty  to  twenty-five  hogs;  and  as  individuals  are  not  prevented 
from  settling  on  the  public  land,  but  rather  encouraged,  the  means 
are  thus  afforded  to  farmers  of  acquiring  this  property,  previous  to 
the  purchase  of  land.  Mechanics'  wages  are  much  higher;  and  those 
who  work  in  the  most  useful  arts,  such  as  carpenters,  blacksmiths, 
shoemakers,  &c.,  are  greatly  needed.  An  individual  of  this  class,  may 
earn  money  enough  to  buy  eighty  acres,  in  six  months.  A  person  who 
teaches  a  common  English  school,  receives  three  dollars  per  quarter 
for  each  pupil,  and  such  persons  are  in  great  demand.  A  school  of 
thirty  scholars  will  yield  ninety  dollars  per  quarter,  or  $360  per  year. 
The  school-house  and  fuel  being  furnished  by  the  patrons,  and  board- 
ing costing  about  one  dollar  per  week,  such  an  individual  may  in  one 
year  buy  a  tract  of  land.  .  .  . 

1  American  Quarterly  Review  (Philadelphia,  1832),  No.  XXII,  280. 


READINGS  IN  ECONOMIC  HISTORY 

III.  SPECULATION  IN  PUBLIC  LANDS 

A.   Land  Speculation,  1840  l 

The  favorable  terms  on  which  government  lands  could  be  acquired  and  the  rapid 
growth  of  the  population  in  the  west  caused  speculators  to  buy  up  the  land  in  the 
hope  of  reselling  it  at  a  substantial  advance  in  price.  Oftentimes  towns  were 
laid  out  in  the  forests  or  on  the  open  prairie  and  advertised  as  future  centers  of 
trade  and  industry.  Some  of  the  cities  thus  advertised  more  than  realized  the 
claims  of  their  friends,  but  a  great  majority  of  them  have  no  existence  at  the  present 
time.  This  speculation  did  the  people  a  positive  injury.  It  created  the  desire  to 
become  wealthy  without  labor,  and  tended  to  minimize  the  successes  that  came 
under  ordinary  conditions.  Of  this  practice,  Mr.  Hildreth,  the  historian,  had  the 
following  to  say: 

Simultaneously  with  this  increase  in  the  regular  trade,  and  as 
generally  happens  in  like  cases,  a  good  many  new  speculations  were 
brought  forward  and  pursued  with  ardor.  Among  these,  the  specu- 
lation in  Maine  timber  lands  was  the  first  in  order,  the  most  extrava- 
gant and  irrational,  and  the  most  ruinous  to  those  engaged  in  it.  An 
idea  was  started  that  the  timber  in  Maine  was  diminishing  so  rapidly 
that  the  supply  must  soon  be  exhausted,  and  that  those  who  engrossed 
what  remained,  could  not  fail  to  grow  rich.  The  rage  to  purchase 
these  lands  became  excessive,  and  the  most  extravagant  prices  were 
paid.  Many  gross  frauds  were  committed,  and  many  arts  were  re- 
sorted to,  to  entrap  purchasers  and  keep  up  the  price.  But  it  was  soon 
discovered  that  the  foundation  upon  which  this  speculation  rested, 
was  unsound.  The  lands,  late  so  precious,  became  altogether  un- 
salable, and  many  who  imagined  they  had  made  great  fortunes,  found 
themselves  bankrupt.  New  England  and  the  city  of  New  York  were 
the  chief  sufferers  in  this  business,  which  however  was  of  too  limited 
a  character  to  produce  any  general  effects. 

The  speculations  in  the  public  lands,  by  which  this  period  was 
distinguished,  were  of  a  far  more  extended  character.  Lands  were 
purchased  of  the  government,  in  the  years  1834,  '35,  and  '36,  to  the 
amount  of  forty-seven  millions  of  dollars,  being  nearly  half  of  the 
total  amount  which,  up  to  that  time,  had  been  received  from  that 
source.  The  cause  of  these  immense  purchases  is  to  be  found  in  the 
following  considerations.  By  the  Indian  removal  policy,  which  formed 
a  part  of  General  Jackson's  system  of  administration,  vast  tracts  of 
land,  both  in  the  North  and  South,  had  been  suddenly  denuded  of 


1  Banks,  Banking,  and  Paper  Currencies.     By  Richard  Hildreth  (Boston,  1840), 
91-2. 


PUBLIC  LANDS  AND   AGRICULTURE  459 

their  aboriginal  inhabitants,  and  brought  into  the  market.  Many 
of  these  lands  held  out  a  great  temptation  to  settlers  from  their  fer- 
tility and  situation;  and  the  high  prices  of  cotton  and  flour  brought 
a  flood  of  emigration  into  the  South  and  West,  and  held  out  great 
temptations  to  speculators  to  take  up  large  quantities  of  the  govern- 
ment lands,  in  hopes  to  sell  again  at  a  profit.  The  influx  of  emigrants 
into  these  states  led,  of  course,  to  a  great  increase  of  trade.  This 
caused  many  villages,  and  even  some  considerable  towns,  to  spring 
suddenly  into  existence,  and  led  to  a  great  speculation  in  "town  lots" 
and  sites  for  new  towns,  of  a  much  more  extravagant  and  dangerous 
nature  than  the  mere  purchase  of  public  lands.  Many  of  those  pur- 
chases, considering  the  situation  and  means  of  those  who  made  them, 
were  no  doubt  injudicious;  but  taken  as  a  whole,  they  will  perhaps 
prove  a  source  of  profit  to  the  purchasers. 


B.   A  View  of  Western  Speculation  before  the  Civil  War  1 

Naturally  the  center  of  land  speculation  was  in  the  west,  where  land  was 
plentiful  and  cheap. 

Speculation  in  real  estate  has  for  many  years  been  the 
ruling  idea  and  occupation  of  the  Western  mind.  Clerks,  labourers, 
farmers,  storekeepers,  merely  followed  their  callings  for  a  living, 
while  they  were  speculating  for  their  fortunes.  There  are  no  statis- 
tics which  show  how  many  Yankees  went  out  West  to  buy  a  piece  of 
land  and  make  a  farm  and  home,  and  live  and  settle,  and  die  there. 
I  think  that  not  more  than  one-half  per  cent,  of  the  migration  from 
the  East  started  with  that  idea;  and  not  even  half  of  these  carried 
out  the  idea.  The  German  immigrants,  indeed,  were  better  entitled 
to  be  called  settlers;  but  all  classes  and  people  of  all  kinds  became 
agitated  and  unsettled,  and  had  their  acquisitiveness  perpetually 
excited  by  land  speculations  in  some  shape  or  other  —  new  railways, 
roads,  proposed  villages  and  towns,  gold  mines,  water-powers,  coal 
mines  —  some  opportunity  or  other  of  getting  rich  all  at  once  by  a 
lucky  hit.  .  .  . 

The  people  of  the  West  became  dealers  in  land,  rather  than  its 
cultivators.  Scorning  cheap  clocks,  wooden  nutmegs,  and  apple- 
parers,  the  Yankee,  stepping  from  the  almost  ridiculous  to  the  de- 
cidedly sublime,  went  out  West,  and  traded  in  the  progress  of  the 
country.  Every  one  of  any  spirit,  ambition,  and  intelligence  (cash 

1  Ten  Years  in  the  United  States.     By  D.  W.  Mitchell  (London,  1862),  325-9. 


460  READINGS  IN  ECONOMIC  HISTORY 

was  not  essential),  frequented  the  National  Land  Exchange,  a  vast 
concern:  extending  from  the  Mississippi  to  the  Pacific. 

By  convenient  laws,  land  was  made  as  easily  transferable  and 
convertible  as  any  other  species  of  property.  It  might  and  did  pass 
through  a  dozen  hands  within  sixty  days,  rising  in  price  at  each 
transfer;  in  the  meantime  producing  buffaloes  and  Red  Indians. 
Millions  of  acres  were  bought  and  sold  without  buyer  or  seljer  know- 
ing where  they  were,  or  whether  they  were  anywhere;  the  buyer  only 
knowing  that  he  hoped  to  sell  his  title  to  them  at  a  handsome  profit. 

To  keep  up  and  encourage  the  great  western  staple,  the  Progress 
of  the  Country;  to  inflate  as  largely  and  rapidly  as  possible  the 
magnificent  bubble,  public  improvements  were  called  for:  canals  and 
railroads  were  made  or  proposed,  from  the  established  centres  of 
trade,  commerce,  and  travel,  to  the  indefinite  West.  Where  was  the 
money  to  come  from  to  create  these  costly  works,  on  a  vast  scale, 
in  a  savage  territory,  to  give  value  to  that  territory  on  the  Land 
Exchange?  It  was  a  grand  problem,  one  would  think,  but  really  as 
simple  as  the  discovery  of  America.  Endow  the  railway  with  a  few 
millions  of  acres  of  the  lands  it  runs  through  and  brings  into  the 
market;  then  sell  these  acres  to  pay  for  constructing  the  line,  and  to 
yield  the  shareholders  their  interest. 

To  extend  and  facilitate  these  land  transactions,  these  speculations 
in  the  Progress  of  the  Country,  the  system  of  selling  land  on  time  was 
adopted.  The  instalments  of  the  purchase-money  were  made  pay- 
able within  various  periods  (frequently  ten  years)  at  low  interest, 
in  the  first  instance.  Thus,  A.,  after  much  thinking,  and  watching, 
and  saving,  or  borrowing,  secured  a  corner  lot  in  his  favourite  city 
(that  was  to  be),  or  his  half-section  in  some  future  garden  of  the 
Union  (often  actually  indicated  in  the  deed  of  sale  by  the  latitude  and 
longitude) ;  this  he  sold  at  a  profit  to  B.,  on  a  few  years'  credit  (secured, 
of  course,  by  mortgage);  B.  did  the  same  to  C.;  and  so  on. 

It  happened  that,  while  this  system  was  going  on,  the  United  States 
Government  rewarded  the  services  of  those  who  had  borne  arms  in 
the  wars  of  the  country,  by  giving  them  Land  Warrants  for  80,  or 
1 60,  or  320  acres,  according  to  services  —  in  all  amounting  to  many 
millions  of  acres.  So  in  1856  the  railroad  and  canal  companies  and 
the  holders  of  these  Land  Warrants  were  everywhere  selling,  selling, 
selling,  in  large  or  small  parcels  of  land,  until  everybody  in  the  West 
had  a  share  of  God's  earth,  quietly  increasing  in  value  at  the  rate  of 
perhaps  a  hundred,  or  at  least  twenty  per  cent,  per  annum  —  it  was 
hoped. 


PUBLIC  LANDS  AND   AGRICULTURE  461 

As  an  example  of  the  effects  of  this  real  estate  mania  take  Chicago. 
There  land,  for  building  purposes,  was  clearer  than  in  the  larger  East- 
ern cities;  and  house-rent  twice  as  much  as  in  New  York.  In  1857 
it  is  probable  that  upwards  of  eight  hundred  millions  of  dollars  were 
invested  in  idle  Western  lands,  and  lots  in  proposed  cities,  which  had 
been  paid  for  to  the  extent  of  one-fourth,  the  remainder  continually 
being  paid  in  instalments. 

Of  course,  this  business,  then,  required  a  good  deal  of  money, 
which  was  forthcoming  —  while  prices  were  still  rising.  But  the 
progress  of  speculation  had  got  far  ahead  of  its  object  or  subject, 
the  Progress  of  the  Country. 

The  Western  merchant  or  storekeeper  came  to  New  York,  Boston, 
Philadelphia,  bought  goods  on  credit  of  the  jobbers  or  importers, 
went  home,  sold  them,  and  invested  the  proceeds  in  lands  and  lots. 
Land  was  becoming  the  circulating  medium.  The  importers  had  to 
obtain  an  extension  of  time  to  pay  the  European  manufacturer  his 
dues  —  unless  he  would  take  a  few  sections  of  land  in  such  and  such 
a  latitude  and  longitude. 

Of  course,  such  a  business  as  this,  engrossing  the  attention  of  per- 
haps a  majority  of  the  population,  could  not  go  on  long.  Unfortu- 
nately, the  bankruptcy  and  misery  that  followed  the  long  put-off 
day  of  settling  accounts  are  already  almost  forgotten.  The  whole 
domestic  history  of  the  time,  which  ended  in  the  panic  of  1857,  affords 
a  striking  illustration  of  the  state  of  mind  which  has  become  habitual 
in  the  Northern  States;  the  tendency  to  seize  upon  some  project  or 
idea,  to  dwell  upon  it,  inflate  it,  make  it  into  a  mania,  run  it  into  the 
ground,  as  they  say,  and  then  forget  all  about  it.  But  what  is  most 
important  to  consider  is,  that  the  leaders  and  promoters  of  these 
ruinous,  demoralizing  manias  are,  in  public  opinion,  respectable,  in- 
telligent, and  educated  people. 

C.   Early  Land  Speculation  in  Illinois,  1830-1840  l 

The  land  speculation  carried  on  in  Illinois  was  perhaps  typical  of  all  similar 
enterprises  of  the  times.  Governor  Ford  of  that  state  had  an  opportunity  of  seeing 
it  in  all  its  phases  and  describes  it  as  follows: 

In  the  spring  and  summer  of  1836,  the  great  land  and  town  lot 
speculation  of  those  times  had  fairly  reached  and  spread  over  Illinois. 
It  commenced  in  this  State  first  at  Chicago,  and  was  the  means  of 
building  up  that  place  in  a  year  or  two  from  a  village  of  a  few  houses, 

1  History  of  Illinois.     By  Thomas  Ford  (Chicago,  1854),  181-2. 


462  READINGS  IN  ECONOMIC  HISTORY 

to  be  a  city  of  several  thousand  inhabitants.  The  story  of  the  sud- 
den fortunes  made  there,  excited  at  first  wonder  and  amazement,  next 
a  gambling  spirit  of  adventure,  and  lastly,  an  all-absorbing  desire 
for  sudden  and  splendid  wealth.  Chicago  had  been  for  some  time 
only  one  great  town  market.  The  plats  of  towns,  for  a  hundred 
miles  around,  were  carried  there  to  be  disposed  of  at  auction.  The 
eastern  people  had  caught  the  mania.  Every  vessel  coming  west 
was  loaded  with  them,  their  money  and  means,  bound  for  Chicago, 
the  great  fairy  land  of  fortunes.  But  as  enough  did  not  come  to  satisfy 
the  insatiable  greediness  of  the  Chicago  sharpers  and  speculators,  they 
frequently  consigned  their  wares  to  eastern  markets.  Thus,  a  vessel 
would  be  freighted  with  land  and  town  lots,  for  the  New  York  and 
Boston  markets,  at  less  cost  than  a  barrel  of  flour.  In  fact,  lands 
and  town  lots  were  the  staple  of  the  country,  and  were  the  only  articles 
of  export. 

The  example  of  Chicago  was  contagious.  It  spread  to  all  the 
towns  and  villages  of  the  State.  New  towns  were  laid  out  in  every 
direction.  The  number  of  towns  multiplied  so  rapidly,  that  it  was 
waggishly  remarked  by  many  people,  that  the  whole  country  was 
likely  to  be  laid  out  into  towns;  and  that  no  land  would  be  left  for 
farming  purposes.  The  judgments  of  all  our  business  men  were 
unsettled,  and  their  minds  occupied  only  by  the  one  idea,  the  all- 
absorbing  desire  of  jumping  into  a  fortune.  As  all  had  bought  more 
town  lots  and  lands  than  many  of  them  could  pay  for,  and  more  than 
any  of  them  could  sell,  it  was  supposed  that  if  the  country  could  be 
rapidly  settled,  its  resources  developed,  and  wealth  invited  from 
abroad,  that  all  the  towns  then  of  any  note  would  soon  become  cities, 
and  that  the  other  towns,  laid  out  only  for  speculation,  and  then 
without  inhabitants,  would  immediately  become  thriving  and  popu- 
lous villages,  the  wealth  of  all  would  be  increased,  and  the  town  lot 
market  would  be  rendered  stable  and  secure. 

D.   Land  Speculation  in  Chicago  in  1835  l 

In  no  other  part  of  the  west  was  speculation  in  land  carried  on  more  indus- 
triously than  in  Chicago.  Not  only  were  the  lots  of  that  city  and  the  adjoining 
farm  lands  objects  of  speculation,  but  Chicago  became  also  a  center  where  specula- 
tion in  the  lots  of  hundreds  of  prospective  towns  was  carried  on.  Miss  Martineau 
describes  the  activities  there  as  follows: 

Chicago  looks  raw  and  bare,  standing  on  the  high  prairie  above 
the  lake-shore.  The  houses  appeared  all  insignificant,  and  run  up 

1  Society  in  America.     By  Harriet  Martineau  (London,  1837),  1,349-53. 


PUBLIC  LANDS   AND   AGRICULTURE  463 

in  various  directions,  without  any  principle  at  all.  A  friend  of  mine 
who  resides  there  had  told  me  that  we  should  find  the  inns  intolerable, 
at  the  period  of  the  great  land  sales,  which  bring  a  concourse  of 
speculators  to  the  place.  It  was  even  so.  The  very  sight  of  them 
was  intolerable;  and  there  was  not  room  for  our  party  among  them 
all.  I  do  not  know  what  we  should  have  done,  (unless  to  betake 
ourselves  to  the  vessels  in  the  harbour,)  if  our  coming  had  not  been 
foreknown,  and  most  kindly  provided  for.  We  were  divided  between 
three  families,  who  had  the  art  of  removing  all  our  scruples  about 
intruding  on  perfect  strangers.  None  of  us  will  lose  the  lively  and 
pleasant  associations  with  the  place,  which  were  caused  by  the  hos- 
pitalities of  its  inhabitants. 

I  never  saw  a  busier  place  than  Chicago  was  at  the  time  of  our 
arrival.  The  streets  were  crowded  with  land  speculators,  hurrying 
from  one  sale  to  another.  A  negro,  dressed  up  in  scarlet,  bearing 
a  scarlet  flag,  and  riding  a  white  horse  with  housings  of  scarlet,  an- 
nounced the  times  of  sale.  At  every  street-corner  where  he  stopped, 
the  crowd  flocked  round  him;  and  it  seemed  as  if  some  prevalent 
mania  infected  the  whole  people.  The  rage  for  speculation  might 
fairly  be  so  regarded.  As  the  gentlemen  of  our  party  walked  the 
streets,  store-keepers  hailed  them  from  their  doors,  with  offers  of 
farms,  and  all  manner  of  land-lots,  advising  them  to  speculate  before 
the  price  of  land  rose  higher.  A  young  lawyer,  of  my  acquaintance 
there,  had  realised  five  hundred  dollars  per  day,  the  five  preceding 
days,  by  merely  making  out  titles  to  land.  Another  friend  had  real- 
ised in  two  years,  ten  times  as  much  money  as  he  had  before  fixed  upon 
as  a  competence  for  life.  Of  course,  this  rapid  money-making  is  a 
merely  temporary  evil.  A  bursting  of  the  bubble  must  come  soon. 
The  absurdity  of  the  speculation  is  so  striking,  that  the  wonder  is 
that  the  fever  should  have  attained  such  a  height  as  I  witnessed. 
The  immediate  occasion  of  the  bustle  which  prevailed,  the  week  we 
were  at  Chicago,  was  the  sale  of  lots,  to  the  value  of  two  millions  of 
dollars,  along  the  course  of  a  projected  canal;  and  of  another  set, 
immediately  behind  these.  Persons  not  intending  to  game,  and  not 
infected  with  mania,  would  endeavor  to  form  some  reasonable  con- 
jecture as  to  the  ultimate  value  of  the  lots,  by  calculating  the  cost 
of  the  canal,  the  risks  from  accident,  from  the  possible  competition 
from  other  places,  &c.,  and,  finally,  the  possible  profits,  under  the 
most  favorable  circumstances,  within  so  many  years'  purchase. 
Such  a  calculation  would  serve  as  some  sort  of  guide  as  to  the  amount 
of  purchase-money  to  be  risked.  Whereas,  wild  land  on  the  banks 


464  READINGS  IN  ECONOMIC  HISTORY 

of  a  canal,  not  yet  even  marked  out,  was  selling  at  Chicago  for  more 
than  rich  land,  well  improved,  in  the  finest  part  of  the  valley  of  the 
Mohawk,  on  the  banks  of  a  canal  which  is  already  the  medium  of  an 
almost  inestimable  amount  of  traffic.  If  sharpers  and  gamblers  were 
to  be  the  sufferers  by  the  impending  crash  at  Chicago,  no  one  would 
feel  much  concerned  :  but  they,  unfortunately,  are  the  people  who  en- 
courage the  delusion,  in  order  to  profit  by  it.  Many  a  high-spirited, 
but  inexperienced  young  man;  many  a  simple  settler,  will  be  ruined 
for  the  advantage  of  knaves. 

Others,  besides  lawyers  and  speculators  by  trade,  make  a  fortune 
in  such  extraordinary  times.  A  poor  man  at  Chicago  had  a  pre-emp- 
tion right  to  some  land,  for  which  he  paid  in  the  morning  one  hundred 
and  fifty  dollars.  In  the  afternoon,  he  sold  it  to  a  friend  of  mine  for 
five  thousand  dollars.  A  poor  Frenchman,  married  to  a  squaw,  had 
a  suit  pending,  when  I  was  there,  which  he  was  likely  to  gain,  for  the 
right  of  purchasing  some  land  by  the  lake  for  one  hundred  dollars, 
which  would  immediately  become  worth  one  million  dollars. 

There  was  much  gaiety  going  on  at  Chicago,  as  well  as  business. 
On  the  evening  of  our  arrival  a  fancy  fair  took  place.  As  I  was  too 
much  fatigued  to  go,  the  ladies  sent  me  a  bouquet  of  prairie  flowers. 
There  is  some  allowable  pride  in  the  place  about  its  society.  It  is  a 
remarkable  thing  to  meet  such  an  assemblage  of  educated,  refined, 
and  wealthy  persons  as  may  be  found  there,  living  in  small,  incon- 
venient houses  on  the  edge  of  a  wild  prairie.  There  is  a  mixture, 
of  course.  I  heard  of  a  family  of  half-breeds  setting  up  a  carriage, 
and  wearing  fine  jewellery.  When  the  present  intoxication  of  pros- 
perity passes  away,  some  of  the  inhabitants  will  go  back  to  the  east- 
ward; there  will  be  an  accession  of  settlers  from  the  mechanic  classes; 
good  houses  will  have  been  built  for  the  richer  families,  and  the  singu- 
larity of  the  place  will  subside.  It  will  be  like  all  the  other  new  and 
thriving  lake  and  river  ports  of  America.  Meantime,  I  am  glad  to 
have  seen  it  in  its  strange  early  days. 

IV.  ENGLISH  AND  AMERICAN  AGRICULTURE  COMPARED 
Superiority  of  American  Agriculture, 


A  good  view  of  American  agriculture  may  be  had  by  comparing  it  with  that 
of  England.  Each  had  its  advantages  and  disadvantages,  and  they  are  stated  by 
an  observant  English  agriculturist  as  follows: 

1  A  Tour  through  North  America.  By  Patrick  Shirreff  (Edinburgh,  1835), 
340-1,  345,  348-9- 


PUBLIC  LANDS  AND   AGRICULTURE  465 

In  North  America,  extensive  landholders  are  not  common  in  any 
of  the  districts  which  I  visited ;  and  where  they  do  exist,  a  great  part 
of  their  possessions  are  unproductive.  The  soil  is  chiefly  cultivated 
by  its  owners,  who,  in  sundry  respects,  resemble  the  tenants  of  Scot- 
land; and  they  often  perform  a  great  portion  of  the  manual  labour 
of  the  farm.  In  many  parts  of  the  country,  which  has  been  long 
settled,  the  farmers  are  opulent,  participating  in  all  the  conveniences 
of  life;  arid,  without  passing  their  time  in  absolute  idleness,  hire  a 
good  deal  of  labour.  In  the  more  recently  settled  parts,  farmers  have 
few  of  the  elegancies  and  conveniences  of  life,  with  an  ample  share  of 
its  necessaries.  They  do  not  labour  hard  after  the  first  three  or 
four  years  of  settlement,  and  seem  to  live  without  much  care. 
Land  does  not  invest  its  owner  with  any  privilege  or  status  in 
society. 

Renters  of  land,  or  tenants,  are  common  in  many  parts,  and  in  all 
respects  rank  as  landholders.  The  terms  of  rent  are  variable.  Near 
towns,  and  in  thickly-peopled  districts,  a  small  rent  is  paid  in  money, 
and  a  lease  of  several  years  taken.  In  remote  situations,  land  is 
commonly  let  on  shares  from  year  to  year.  If  the  owner  of  the  soil 
furnishes  seed  and  labouring  animals,  he  gets  two-thirds  of  the  prod- 
uce, when  on  the  field,  and  removed  from  the  earth.  If  the  tenant 
supplies  animals  and  seed,  the  landowner  gets  one-third.  But  terms 
may  vary  according  to  situation,  soil,  and  crop. 

Farm-hired  men,  or  by  whatever  other  name  they  may  be  dis- 
tinguished, are  to  be  had  in  all  old  settled  districts,  and  also  in  many 
of  the  new  ones.  In  most  cases  their  reward  is  ample,  and  their  treat- 
ment good,  living  on  the  same  kind  of  fare  and  often  associating 
with  their  employers.  A  great  deal  of  farm  labour  is  performed  by 
piece-work. 

The  agriculture  of  a  country  is  affected  by  local  circumstances, 
and  farming  in  Britain  and  in  the  remote  parts  of  America  may  be 
considered  the  extremes  of  the  art.  In  the  one  country  the  farmer 
aims  to  assist,  and  in  the  other  to  rob  nature.  When  the  results 
of  capital  and  labour  are  low,  compared  with  the  hire  of  them,  they  are 
sparingly  applied  to  the  cultivation  of  the  soil,  in  which  case  nature 
is  oppressed  and  neglected,  if  I  may  be  allowed  to  use  such  terms; 
and  when  they  are  high,  compared  with  their  hire,  she  is  aided  and 
caressed.  Both  systems  are  proper  in  the  respective  countries;  and, 
by  assuming  a  fixed  result  for  nature,  they  admit  of  arithmetical 
demonstration.  Along  the  eastern  shores  of  America,  manures  and 
a  considerable  portion  of  hired  labour  are  applied  to  the  cultivation 


466  READINGS  IN  ECONOMIC  HISTORY 

of  the  soil;  but  in  remote  districts  manures  are  not  used,  and  the 
smallest  indispensable  quantity  of  labour  bestowed.  In  the  eastern 
parts,  the  results  of  capital  and  labour  enter  into  the  productions 
of  the  soil;  in  remote  districts  the  aid  of  capital  can  scarcely  be  said 
to  have  been  called  into  action,  and  in  both  situations  nature  is  the 
chief  agent.  .  .  . 

In  the  eastern  parts  of  America  land  may  be  purchased  and  stocked 
for  nearly  the  sum  an  East  Lothian  farmer  expends  in  stocking  and 
improving  a  farm,  namely,  £7  per  acre.  But  if  the  land  has  great 
local  advantages,  the  price  will  be  considerably  higher.  In  the 
western  parts  of  the  United  States,  prairie  land  of  the  best  quality, 
without  the  least  obstacle  to  cultivation,  and  to  any  extent,  may 
be  had.  For  the  sum  of  three  hundred  pounds  sterling  a  farm  of 
200  acres  could  be  bought  and  stocked  in  the  prairies  of  western 
America.  In  East  Lothian  farming  is  a  hazardous  calling ;  in  America 
there  is  no  risk  attending  it.  In  East  Lothian  £2000  is  required  to 
stock  a  farm;  in  the  Western  States  £300  will  purchase  and  stock 
one  nearly  of  equal  size.  In  East  Lothian  a  farmer  has  mental 
annoyance  with  bodily  ease;  in  America  he  has  mental  ease  with 
personal  labour.  In  East  Lothian  a  young  farmer  commences  his 
career  in  affluence,  and  at  middle  age  finds  himself  in  poverty;  in 
America  he  begins  with  toil,  and  is  in  easy  circumstances  by  middle 
age.  .  .  . 

In  judging  then  of  the  step  of  becoming  an  American  agriculturist, 
all  may  lay  their  account  to  undergo  considerable  privations  at  first 
settlement,  and  lead  a  different  life  from  the  farmers  of  East  Lothian. 
The  bountiful  reward  which  industry  receives  soon  enables  good  men 
to  purchase  land;  and  it  is  therefore  often  the  unsteady  and  idle  which 
hire  themselves  to  farmers.  On  this  account,  it  will  be  necessary 
to  work  personally,  by  way  of  example  and  active  superintendence. 
Right  thinking  people  consider  it  no  disgrace  to  labour  in  any  part 
of  the  world,  and  it  is  thought  quite  disreputable  to  be  idle  in  America. 
East  Lothian  farmers  often  toil  mentally  without  remuneration;  and 
the  assurance  that,  while  in  America,  all  the  fruits  of  a  person's  own 
labour,  assisted  by  generous  nature,  accrues  to  himself,  will  nerve 
his  arm  and  sweeten  his  toil.  The  division  of  labour  so  beautifully 
effected  in  some  of  the  operations  of  East  Lothian  agriculture,  and 
which  I  may  be  permitted  to  call  professional  luxuries,  cannot  be 
practised  at  present  in  America.  The  wrooden  dwelling-house  and 
barns  will  at  first  perhaps  appear  revolting,  and  may  induce  some 
people  to  think,  that,  with  the  same  privations  and  sacrifices,  they 


PUBLIC   LANDS  AND   AGRICULTURE  467 

would  have  been  enabled  to  have  lived  in  East  Lothian.  Such  is 
not,  however,  the  case;  because  the  pressure  on  farmers  arises  from 
a  competition  of  numbers,  which  would  be  increased  by  lowering 
the  standard  of  living;  and  the  only  result  of  such  policy  would  be 
to  raise  the  rent  of  land,  and  degrade  all  engaged  in  farming.  Let 
no  one,  however,  from  my  representations  of  American  farming, 
entertain  too  sanguine  hopes  of  success.  Farming,  in  most  parts 
of  the  world,  ranks  low  in  the  scale  of  professional  remuneration; 
and  without  virtue,  persevering  industry,  and  sobriety  of  character, 
people  will  not  likely  either  become  wealthy  or  happy.  In  nine  cases 
out  of  ten,  a  man's  success  in  life  depends  on  his  own  exertions. 
America  presents  a  fertile  and  extensive  field,  and  whoever  does  not 
reap  an  abundant  harvest,  will,  in  all  probability,  find  the  cause  of 
failure  in  his  own  character.  I  cannot  hold  out  an  immediate  or 
ultimate  prospect  of  great  wealth,  as  the  low  price  of  produce  and 
high  labour  renders  this  improbable.  Every  person  may,  however, 
obtain  all  the  necessaries  and  most  of  the  true  comforts  of  life  in  the 
fullest  abundance,  unharassed  by  the  cares  of  the  present,  or  appre- 
hensions of  the  future.  The  pleasures  of  society  are  not  likely  to  be 
so  much  enjoyed  in  America  as  in  Britain;  but,  on  the  other  hand, 
its  mortifications  are  escaped.  In  every  part  of  the  world,  man 
ought  to  look  to  his  family  and  himself,  and  not  to  society,  for  true 
happiness.  If  abundance  of  the  necessaries  of  life  do  not  ensure 
society  in  America,  the  want  of  abundance  is  almost  sure  to  lose 
society  in  Britain. 

V.   AGRICULTURAL  EDUCATION  AND  MACHINERY 

Improvements  before  1860  l 

The  two  important  improvements  in  the  methods  of  agriculture  during  this 
period  were  the  organization  of  agricultural  societies  and  the  application  of 
machinery  to  agriculture.  In  fact,  the  two  went  hand  in  hand,  for  the  former  en- 
couraged with  prizes  and  bonuses  the  invention  of  farm  machinery.  The  intro- 
duction of  labor-saving  machinery  on  the  farms  increased  the  production  of  the 
soil  and  eventually  freed  a  large  part  of  the  population  for  manufactures.  By 
the  old  methods  the  greater  part  of  the  people  were  required  to  engage  in  the  pro- 
duction of  foodstuffs,  but  with  the  coming  of  machinery,  one  worker  with  less 
labor  could  produce  as  much  as  several  workmen  could  formerly  produce.  These 
two  great  developments  have  been  well  described  by  Charles  L.  Flint,  a  well- 
known  authority  on  American  agriculture,  as  follows: 


1  Report  of  the  Commissioner  of  Agriculture  for  the  Year  1872  (Washington, 
1872),  282-4,  286-91. 


468  READINGS  IN  ECONOMIC  HISTORY 

During  the  period  of  the  Revolution  farm  production  was  brought 
to  a  partial  stand-still,  and,  for  some  years  after,  it  was  in  a  state  of 
extreme  depression.  It  took  time  to  recover  from  the  effects  of  the 
struggle.  Gradually,  however,  the  importance  of  some  effort  to  de- 
velop and  improve  the  agriculture  of  the  country  was  impressed  upon 
the  minds  of  the  more  intelligent  and  public-spirited  of  the  people, 
men,  for  the  most  part,  who  were  in  advance  of  their  time.  The 
result  of  their  deliberations  was  the  formation  of  societies  for  the 
encouragement  of  agricultural  improvement.  Thus  the  South  Caro- 
lina Agricultural  Society  was  established  in  1784;  the  Philadelphia 
Society  for  Promoting  Agriculture,  in  1785;  the  New  York  (city) 
Society,  in  1791;  the  Massachusetts  Society  for  Promoting  Agricul- 
ture, in  1792.  These  were  rather  city  than  country  institutions. 
They  were  very  slow  in  reaching  the  common  people.  The  average 
farmer  of  that  day  was  not  up  to  their  standard  of  thought  and  ob- 
servation. Their  example,  their  teachings,  their  entreaties  for  aid, 
their  reports  and  papers,  fell  comparatively  dead  upon  the  mass  of  the 
people.  Farmers  were  not  to  be  taught  by  men  who  never  held  the 
plow.  They  did  not  want  anything  to  do  with  theories.  Custom 
had  marked  out  a  road  for  them,  and  it  was  smooth  and  easy  to 
travel,  and,  though  it  might  be  a  circle  that  brought  up  just  where  it 
had  started,  it  had  the  advantage,  in  the  old  farmer's  mind,  that  in 
it  he  never  lost  his  way.  It  didn't  require  any  exertion  of  mind. 
His  comfort,  as  well  as  his  happiness,  was  based  on  a  feeling  of  filial 
obedience  to  old  usage  that  was  hereditary  in  his  being.  It  was  born 
in  the  blood,  and  ruled  him  with  an  irresistible  power.  His  field  of 
vision  was  bounded  and  narrow,  and  his  work  was  strictly  imitative, 
so  far  as  he  could  see,  and  in  no  way  experimental.  The  old  common 
law,  based  on  precedent,  custom,  practice,  was  his  guide  and  his  rule. 
He  would  be  governed  by  custom,  not  by  reason.  If  ancient  custom 
was  known,  that  was  good  enough  for  him.  It  wasn't  for  him  to  doubt. 
To  investigate  would  imply  doubt.  To  investigate  was  to  theorize. 
Theory  is  at  the  bottom  of  all  investigation,  and  theory  was  a  bug- 
bear in  his  mind.  The  logical  result  —  that  no  improvement  could 
be  reached  without  investigation  —  had  no  terrors  for  him.  He 
seldom  read.  The  written  word  he  received  with  distrust.  It  might 
contain  principles,  and  it  wasn't  principles  that  he  cared  anything 
about,  but  practice.  No  matter  whether  founded  on  wisdom  and 
experience  or  not,  practice  was  the  thing. 

It  is  probable  that  the  events  and  the  excitements  of  the  Revolu- 
tion itself,  with  the  travel,  the  observation,  and  the  social  intercourse 


PUBLIC  LANDS   AND   AGRICULTURE  469 

which  it  involved,  had  much  to  do  with  breaking  up  the  impregnable 
barrier  of  prejudice  and  slavery  to  custom  and  precedent  which  ruled 
so  strongly  in  the  popular  mind.  Great  passions  which  reach  and 
stir  up  the  lowest  depths  of  the  nation's  heart  have  a  liberalizing  and 
progressive  influence.  They  excite  thought  and  awaken  a  spirit  of 
inquiry.  But  that  the  picture  is  not  in  the  least  overdrawn  is  evi- 
dent from  the  fact  that  here  and  there  are  a  few  specimens  left  to 
remind  us  that  the  leaven  which  the  early  societies  infused  among 
the  people  has  not  yet  permeated  the  entire  mass. 

But  time  brings  its  changes.  Something  more  was  felt  to  be 
needed,  and  a  convention  was  held  in  Georgetown,  in  the  District  of 
Columbia,  on  the  28th  of  November,  1809,  from  which  grew  the  Co- 
lumbian Agricultural  Society  for  the  Promotion  of  Rural  and  Domestic 
Economy;  and  the  first  exhibition,  probably,  in  this  country,  was 
held  by  that  society  on  the  loth  of  May,  1810,  with  the  offer  of  liberal 
premiums  for  the  encouragement  of  sheep-raising,  &c.  Elkanah 
Watson  exhibited  three  merino  sheep  in  Pittsfield,  Massachusetts, 
in  the  October  following  of  the  same  year.  It  was  an  innovation 
upon  old  custom,  and  the  occasion  of  much  ridicule  and  contempt 
among  the  farmers  of  that  day  and  generation,  but  it  was  the  germ 
of  the  Berkshire  County  Agricultural  Society,  whose  regular  exhibi- 
tions began  the  year  following,  and  are  believed  to  have  been  the 
first  county  exhibitions  ever  instituted  in  this  country. 

The  Massachusetts  Society  held  its  first  exhibition  at  Brighton 
in  1816,  offered  a  list  of  premiums,  and  instituted  a  plo wing-match; 
but  it  appears  to  have  been  rather  with  the  design  of  testing  the 
strength,  training,  and  docility  of  the  oxen  than  to  improve  the  plow. 
The  plow-maker,  however,  happened  to  be  there  with  his  eyes  open, 
and  there  can  be  no  doubt  that  this  and  similar  exhibitions  which 
soon  followed  gave  a  new  impetus  to  the  progress  of  agricultural 
mechanics.  Improvements  in  the  plow  had  begun,  even  before  the 
close  of  the  last  century.  A  patent  had  been  granted  for  a  cast- 
iron  plow  to  Charles  Newbold,  of  Burlington,  New  Jersey,  in  1797, 
combining  the  mold-board,  share,  and  land-side,  all  cast  together, 
and  it  was  regarded  by  intelligent  plow-makers  as  so  great  an  im- 
provement that  Peacock,  in  his  patent  of  1807,  paid  the  original 
inventor  the  sum  of  $500  for  the  right  to  combine  certain  parts  of 
Newbold's  plow  with  his  own.  The  importance  of  this  implement 
was  so  great  as  to  command  the  attention  and  study  of  scientific 
men,  to  improve  its  form  and  construction,  and  Thomas  Jefferson, 
in  1798,  applied  himself  to  the  task,  and  wrote  a  treatise  upon  the 


470  READINGS  IN  ECONOMIC  HISTORY 

requisite  form  of  the  mold-board,  according  to  scientific  principles, 
calculating  the  exact  form  and  size,  and  especially  the  curvature 
to  lessen  the  friction.  I  have  in  my  possession  his  original  manu- 
script of  this  essay,  containing  his  drawings  and  calculations. 

But  these  changes  and  improvements  were  not  readily  adopted 
by  the  farming  community.  Their  introduction  was  far  slower  than 
any  new  invention  that  promised  to  economize  labor  and  do  better 
work  would  be  at  the  present  day.  Many  a  farmer  clung  to  his  old 
wooden  plow,  asserting  that  cast  iron  poisoned  the  ground  and  spoiled 
the  crops.  He  required  an  ocular  demonstration  before  paying  his 
money  for  an  iron  plow.  It  was  not  so  much  the  weight  of  the  old 
plow  as  the  form  of  the  mold-board,  and  the  construction  of  the  various 
parts,  that  needed  correction.  Its  draught  was  great,  on  account  of 
the  excessive  friction.  The  share  and  mold-board  were  so  attached 
as  to  make  too  blunt  a  wedge.  Its  action  was  not  uniform,  and  it 
was  difficult  to  hold,  requiring  constant  watchfulness  and  great 
strength  to  prevent  it  from  being  thrown  out  of  the  ground.  To 
plow  to  any  considerable  depth  it  was  necessary  to  have  a  man  at  the 
beam  to  bear  down.  The  mold-board  was  often  shod  with  iron  to 
lessen  the  friction  and  prevent  wear,  but  it  was  usually  in  strips, 
often  of  uneven  thickness,  so  that  the  desired  effect  was  not  always 
attained.  The  cast-iron  plow  remedied  these  serious  defects,  and 
secured  at  least  some  greater  uniformity  in  construction.  The  modi- 
fications of  the  mold-board,  which  resulted  from  a  better  understand- 
ing of  the  true  principles  of  construction,  have  enabled  the  farmer 
to  do  vastly  better  work,  and  a  greater  amount  of  it  in  the  same  time, 
and  at  a  less  expenditure  of  strength,  and  to  reap  larger  crops  as  the 
result  of  his  labor,  while  the  cost  of  the  implement,  considering  its 
greater  efficiency  and  its  durability,  is  less  by  half,  probably,  than  the 
old  wooden  plow. 

There  can  be  no  doubt  that  the  saving  to  the  country  from  these 
improvements  in  the  plow,  within  the  last  century,  amounts  to  many 
millions  of  dollars  a  year  in  the  cost  of  teams,  and  some  millions  in 
the  cost  of  plows,  or  that  the  aggregate  of  crops  has  been  increased 
by  them  many  millions  of  bushels.  The  plow  has  also  been  modified 
to  adapt  it  to  a  much  greater  variety  of  soils.  In  the  mode  of  manu- 
facture, too,  a  vast  improvement  has  taken  place.  Half  a  century 
ago  it  was  made  sometimes  on  the  farm,  sometimes  by  the  village 
blacksmith,  and  the  wheelwright.  The  work  is  now  concentrated  in 
fewer  establishments  which  make  it  a  specialty.  In  Massachusetts, 
for  example,  in  1845,  there  were  seventy-three  plow-manufactories, 


PUBLIC  LANDS  AND   AGRICULTURE  471 

making  61,334  plows  and  other  instruments  annually,  while  in  1855 
the  number  of  establishments  had  decreased  to  twenty-two,  which 
made  152,686  plows,  valued  at  $707,175.86,  annually.  A  very  large 
plow-factory  was  established  in  Pittsburgh,  Pennsylvania,  in  1829, 
and,  as  early  as  1836,  it  was  manufacturing  as  many  as  a  hundred 
plows  a  day,  by  the  aid  of  steam-power,  to  supply  chiefly  the  southern 
market.  This  establishment  first  made  a  hill-side  revolving-beam 
plow,  and  the  iron-center  plow,  and  more  recently  it  has  made  a  vast 
number  of  steel  plows,  adapted  to  the  prairie  soils  of  the  West.  An- 
other factory,  in  the  same  city,  as  early  as  1836,  made  plows  at  the 
average  rate  of  4,000  a  year.  The  two  factories  made  34,000 
plows  a  year,  valued  at  $174,000.  There  are  now  many  other  still 
larger  factories,  some  of  which  make  from  ten  to  twelve  hundred 
different  patterns,  adapted  to  every  variety  of  soil  and  circum- 
stance. .  .  . 

But  perhaps  the  most  important  of  modern  agricultural  inventions 
are  the  grain-harvesters,  the  reapers,  the  mowers,  the  thrashers,  and 
the  horse-rakes.  The  sickle,  which  was  in  almost  universal  use  till 
within  a  very  recent  date,  is  undoubtedly  one  of  the  most  ancient 
of  all  our  farming  implements.  Reaping  by  the  use  of  it  was  always 
slow  and  laborious,  while  from  the  fact  than  many  of  our  grains  would 
ripen  at  the  same  time,  there  was  a  liability  to  loss  before  they  could 
be  gathered,  and  practically  there  was  a  vastly  greater  loss  from  this 
cause  than  there  is  at  the  present  time.  It  is  not,  therefore,  too 
much  to  say  that  the  successful  introduction  of  the  reaper  into  the 
grain-fields  of  this  country  has  added  many  millions  of  dollars  to  the 
value  of  our  annual  harvests,  by  enabling  us  to  secure  the  whole 
product,  and  by  making  it  possible  for  the  farmer  to  increase  the 
area  of  his  wheat-fields,  with  a  certainty  of  being  able  to  gather  the 
crop.  Nothing  was  more  surprising  to  the  mercantile  community  of 
Europe  than  the  fact  that  we  could  continue  to  export  such  vast  quan- 
tities of  wheat  and  other  breadstuffs  through  the  midst  of  the  late 
rebellion,  with  a  million  or  two  of  able-bodied  men  in  arms.  The 
secret  of  it  was  the  general  use  of  farm-machinery.  The  number  of 
two-horse  reapers  in  operation  throughout  the  country,  in  the  harvest 
of  1 86 1,  performed  an  amount  of  work  equal  to  about  a  million  of  men. 
The  result  was  that  our  capacity  for  farm  production  was  not  mate- 
rially disturbed. 

The  credit  of  the  practical  application  of  the  principles  involved 
in  this  class  of  machines  undoubtedly  belongs  to  our  own  ingenious 
mechanics;  for  though  somewhat  similar  machines  were  invented  in 


472  READINGS  IN  ECONOMIC  HISTORY 

England  and  Scotland  many  years  ago,  they  had  never  been  proved 
to  be  efficient  on  the  field,  and  had  never  gained  the  confidence  of  the 
farmers,  even  in  their  neighborhood;  while  the  patent  issued  to 
Obed  Hussey,  of  Cincinnati,  in  1833,  and  another  issued  to  Mc- 
Cormick  of  Virginia,  in  1834,  not  only  succeeded  in  the  trials  to  which 
they  were  subjected,  but  gained  a  wide  and  permanent  reputation. 
Many  patents  had  been  issued  in  this  country  previously,  the  first 
having  been  as  early  as  1803,  but  they  had  not  proved  successful. 
Hussey 's  machine  was  introduced  into  New  York  and  Illinois  in  1834, 
into  Missouri  in  1835,  into  Pennsylvania  in  1837,  and  in  the  next 
year  the  inventor  established  himself  in  Baltimore.  McCormick's 
machine  had  been  worked  as  early  as  1831,  but  it  was  afterwards 
greatly  improved,  and  became  a  source  of  an  immense  fortune  to  the 
inventor.  He  took  out  a  second  patent  in  1845,  fifteen  other  machines 
having  been  patented  after  the  date  of  his  first  papers,  including  that 
of  the  Ketchum,  in  1844,  wThich  gained  a  wide  reputation. 

The  first  trial  of  reapers,  partaking  of  a  national  character,  was 
held  under  the  auspices  of  the  Ohio  State  Board  of  Agriculture  in  1852, 
when  twelve  different  machines  and  several  different  mowers  were 
entered  for  competition.  There  was  no  striking  superiority,  accord- 
ing to  the  report  of  the  judges,  in  any  of  the  machines.  A  trial  had 
been  held  at  the  show  of  the  New  York  State  Agricultural  Society, 
at  Buffalo,  in  1848,  but  the  large  body  of  farmers  who  had  witnessed 
it  were  not  prepared  to  admit  that  the  work  of  the  machines  was  good 
enough  to  be  tolerated  in  comparison  with  the  hand-scythe.  Some 
thought  they  might  possibly  work  in  straight,  coarse  grass,  but  in 
finer  grasses  they  were  sure  to  clog.  The  same  society  instituted  a 
trial  of  reapers  and  mowers  at  Geneva  in  1852,  when  nine  machines 
competed  as  reapers  and  seven  as  mowers.  •  Only  two  or  three  of  the 
latter  were  capable  of  equaling  the  common  scythe  in  the  quality 
of  work  they  did,  and  not  one  of  them  all,  when  brought  to  a  stand 
in  the  grass,  could  start  again  without  backing  to  get  up  speed.  All 
the  machines  had  a  heavy  side-draught,  some  of  them  to  such  an 
extent  as  to  wear  seriously  on  the  team.  None  of  them  could  turn 
about  readily  within  a  reasonable  space,  and  all  were  liable  to  tear  up 
the  sward  in  the  operation.  The  old  Manning,  patented  in  1831, 
and  the  Ketchum  machines  were  the  only  ones  that  were  capable  of 
doing  work  that  was  at  all  satisfactory.  One  or  two  of  the  reapers 
in  this  trial  did  fair  work,  and  the  judges  decided  that,  in  comparison 
with  the  hand-cradle,  they  showed  a  saving  of  88f  cents  per  acre. 
Here  was  some  gain  certainly,  a  little  positive  advance,  but  still  most 


PUBLIC  LANDS  AND   AGRICULTURE  473 

of  the  reapers,  as  well  as  the  mowers,  did  very  inferior  work.  The 
draught  in  them  all  was  very  heavy,  while  some  of  the  best  of  them  had 
a  side-draught  that  was  destructive  to  the  team. 

The  inventive  genius  of  the  country  was  stimulated  by  these  trials 
to  an  extraordinary  degree  of  activity.  Patents  began  to  multiply 
rapidly.  Local  trials  took  place  every  year  in  various  parts  of  the 
country  to  test  the  merits  of  the  several  machines.  The  great  Inter- 
national Exposition  at  Paris  in  1855  was  an  occasion  not  to  be  over- 
looked by  an  enterprising  inventor,  and  the  American  machines, 
imperfect  as  they  were  at  that  time,  were  brought  to  trial  there  in 
competition  with  the  world.  The  scene  of  this  trial  was  on  a  field 
of  oats  about  forty  miles  from  Paris,  each  machine  having  about  an 
acre  to  cut.  Three  machines  were  entered  for  the  first  trial,  one 
American,  one  English,  and  a  third  from  Algiers,  all  at  the  same 
time  raking  as  well  as  cutting.  The  American  machine  did  its  work 
in  twenty-two  minutes,  the  English  in  sixty-six,  and  the  Algerian  in 
seventy-two. 

At  a  subsequent  trial  on  the  same  piece,  three  other  machines 
were  entered,  of  American,  English,  and  French  manufacture,  when 
the  American  machine  did  its  work  in  twenty-two  minutes,  while 
the  two  others  failed.  "The  successful  competitor  on  this  occasion," 
says  a  French  journal,  "did  its  work  in  the  most  exquisite  manner, 
not  leaving  a  single  stalk  ungathered,  and  it  discharged  the  grain  in 
the  most  perfect  shape,  as  if  placed  by  hand,  for  the  binders.  It 
finished  its  piece  most  gloriously."  The  contest  was  finally  narrowed 
down  to  three  machines,  all  American.  Two  machines  were  after- 
wards converted  from  reapers  into  mowers,  one  making  the  change 
in  one  minute,  the  other  in  twenty.  Both  performed  their  task  to 
the  astonishment  and  satisfaction  of  a  large  concourse  of  spectators, 
and  the  judges  could  hardly  restrain  their  enthusiasm,  but  cried  out, 
"Good,  good!"  "Well  done!"  while  the  excitable  people  who  looked 
on  hurrahed  for  the  American  reaper,  crying  out,  "That's  the  ma- 
chine!" "That's  the  machine!"  The  reporter  of  a  French  agri- 
cultural journal  said:  "All  the  laurels,  we  are  free  to  confess,  have 
been  gloriously  won  by  Americans,  and  this  achievement  cannot  be 
looked  upon  with  indifference,  as  it  plainly  foreshadows  the  ultimate 
destiny  of  the  New  World." 

Five  years  after  the  Geneva  trial  there  was  a  general  desire  to 
have  another  on  a  scale  of  magnificence  that  should  bring  out  all  the 
prominent  reapers  and  mowers  of  the  country.  The  United  States 
Agricultural  Society  accordingly  instituted  a  national  trial  at  Syracuse, 


474  READINGS  IN  ECONOMIC  HISTORY 

New  York,  in  1857.  More  than  forty  mowers  and  reapers  entered, 
and  were  brought  to  test  on  the  field.  It  was  soon  apparent  that  strik- 
ing improvements  had  been  made  since  the  meeting  at  Geneva.  The 
draught  had  been  very  materially  lessened  in  nearly  all  the  machines, 
though  the  side-draught  was  still  too  great  in  some  of  them.  Most 
of  the  machines  could  now  cut  fine  and  thick  grass  without  clogging, 
and  there  was  a  manifest  progress  in  them,  but  of  the  nineteen  that 
competed  as  mowers,  only  three  could  start  in  fine  grass  without 
backing  to  get  up  speed.  The  well-known  Buckeye,  patented  only 
the  year  before,  wron  its  first  great  triumph  here,  and  carried  off  the 
first  prize.  .  .  . 

The  horse  hay-rake  was  invented  at  an  earlier  date  than  the 
mowing-machine.  It  has  been  used  in  this  country  nearly  seventy 
years,  and  the  saving  by  its  use,  sixty  years  ago,  was  estimated  to  be 
the  labor  of  six  men  in  the  same  time.  The  work  to  be  performed 
in  raking  hay,  though  slow,  is  comparatively  light.  It  does  not 
require  the  exertion  of  a  very  great  amount  of  strength.  It  is  just 
such  kind  of  work  where  the  application  of  animal  power  becomes  of 
the  greatest  advantage,  because  it  multiplies  the  efficiency  of  the  hand 
many  times.  The  same  thing  is  noticed  in  the  use  of  the  hand-drills 
for  sowing  small  seeds,  the  tedder  for  turning  and  spreading  hay,  and 
in  other  similar  operations.  The  labor  of  a  good  horse-rake  is  equal 
to  that  of  eight  or  ten  men  for  the  same  time,  and  from  twenty  to 
thirty  acres  a  day  can  be  gathered  by  a  single  horse  and  driver,  and 
that  without  overexertion.  In  the  economy  of  labor  the  horse-rake 
must  be  regarded  as  second  only  in  importance  to  the  mower  and 
the  reaper,  and  is  considered  as  essential  upon  the  farm  as  the  plow 
itself. 

The  tedder  is  another  invention  of  still  more  recent  date.  With 
the  introduction  of  the  mower,  by  which  grass  could  be  cut  so  rapidly, 
and  the  horse-rake,  by  which  it  could  be  gathered  more  rapidly  than 
ever  before,  there  was  still  wanting  some  means  by  which  it  could  be 
cured  proportionally  quick,  something  to  complete  and  round  out  the 
new  system,  as  it  were,  to  make  the  revolution  of  the  process  of  hay- 
making entire.  Various  forms  of  the  tedder  had  been  patented  and 
used  in  England,  but  they  were  too  heavy  and  cumbersome  for 
American  use,  and  it  was  left  to  our  own  inventors  to  meet  and  over- 
come the  mechanical  obstacles  in  the  way  of  success  here.  This  they 
have  done,  and  we  have  so  far  economized  labor  in  this  direction, 
that  the  tedder  is  now  regarded  as  of  nearly  equal  importance  with 
the  mower  and  the  horse-rake. 


PUBLIC  LANDS   AND   AGRICULTURE  475 

To  these  appliances  for  lightening  and  shortening  the  labors  of 
haying,  have  been  added  many  forms  of  the  horse-fork  for  unloading 
and  mowing  away  hay  in  the  barn  or  upon  the  stack.  Few  machines 
have  met  with  greater  popular  favor  than  the  horse  pitchfork,  for  it 
saves  not  only  the  most  violent  strain  upon  the  muscles,  but  econo- 
mizes time,  which,  in  the  hurry  of  haying,  is  often  of  the  utmost 
importance.  The  American  hand-forks  had  been  brought  so  near 
perfection,  by  their  high  finish,  lightness,  and  strength,  as  to  leave 
little  to  be  desired,  but  the  horse-fork  has  been  so  generally  intro- 
duced, as,  to  a  considerable  extent,  to  supersede  their  use. 

While  these  vast  improvements  have  been  going  on  with  the 
other  implements  of  the  farm,  the  improvement  in  machines  for 
thrashing  grain  has  been  rapidly  progressing,  till  they  have  reached 
a  wonderful  degree  of  perfection.  Most  of  us  can  remember  when  the 
old-fashioned  flail  was  heard  upon  almost  every  barn-floor  in  the 
country.  Here  and  there  was  a  case  where  the  grain  was  trodden 
out  by  cattle,  with  an  amazing  waste  of  time  and  labor.  Compare 
those  slow  methods  with  the  process,  widely  known  at  the  present 
day,  by  which  a  horse-power  or  steam-power  thrasher  not  only  sepa- 
rates the  grain  but  winnows  it,  measures  it,  bags  it,  ready  for  market, 
and  carries  away  the  straw  to  the  stack  at  the  same  operation,  and 
all  with  a  rapidity  truly  astonishing.  As  early  as  the  Paris  Exposition 
of  1855  the  victory  was  won  by  an  American  machine.  To  ascertain 
the  comparative  rapidity  and  economy  of  thrashing,  six  men  were 
set  to  work  at  thrashing  with  flails.  In  one  hour  they  thrashed  36 
liters  of  wheat.  In  the  same  time  Pitt's  American  machine  thrashed 
740  liters;  Clayton's  English  machine  thrashed  410  liters;  Duvoir's 
French  machine  thrashed  250  liters;  Pinet's  French  machine  thrashed 
1 50  liters.  Speaking  of  this  trial  a  French  journal  said:  "This  Ameri- 
can machine  literally  devoured  the  sheaves  of  wheat.  The  eye  can- 
not follow  the  work  which  is  effected  between  the  entrance  of  the 
sheaves  and  the  end  of  the  operation.  It  is  one  of  the  greatest  results 
which  it  is  possible  to  attain.  The  impression  which  the  spectacle 
produced  on  the  Arab  chiefs  was  profound."  Good  as  that  machine 
was  at  that  time,  it  has  been  greatly  improved  since  then;  and  it 
is  a  fact  that  wherever  our  first-class  machines  have  come  into  com- 
petition with  those  of  European  manufacture,  they  have  invariably 
proved  themselves  superior  in  point  of  simplicity,  rapidity,  and  per- 
fection of  work. 

Nor  has  the  progress  in  the  improvement  of  other  indispensable 
machines  of  the  farm  been  less  marked  and  important.  The  smaller 


476  READINGS  IN  ECONOMIC  HISTORY 

implements  have  felt  the  impress  of  the  mechanical  genius  of  the 
age.  The  corn-sheller  has  been  brought  to  such  perfection  as  to  sepa- 
rate the  corn  from  the  ear  with  great  rapidity  and  with  the  application 
of  little  power.  It  has  been  adapted  to  horse  power  also,  and  to  dif- 
ferent sections  of  the  country,  where  different  varieties  of  corn  are 
raised,  and  to  shell  one  or  two  ears  at  the  same  tune.  Its  economy 
of  time  and  labor  is  such  as,  upon  large  farms  where  the  product 
is  large,  to  pay  for  itself  in  a  single  year. 

The  hay-cutter  is  another  machine  of  modern  invention.  Wher- 
ever a  large  stock  of  cattle  is  kept,  especially  where  a  considerable 
number  of  horses  are  wintered,  it  is  often  thought  to  be  good  economy 
to  feed  out  more  or  less  of  the  coarser  feeding  substances  of  the  farm, 
as  straw,  corn-stover,  the  poorer  qualities  of  hay,  &c.,  by  mixing  them, 
either  with  the  better  qualities  of  hay  or  with  some  sort  of  concen- 
trated food,  like  meal.  The  hay-cutter  is  adjustable  so  as  to  cut  at 
different  lengths,  according  to  the  wants  of  the  stock  for  which  it  is 
designed.  The  point  is  to  cut  short  and  with  perfect  regularity,  and 
when  this  quality  is  attained  in  a  machine,  uniting  strength,  simplicity, 
durability,  and  safety  to  the  operator,  it  is  estimated  that  there  is 
a  gain  of  about  25  per  cent,  in  the  economy  of  feeding,  in  the  increase 
of  thrift  secured,  and  the  positive  advantage  to  be  derived  in  the 
manure.  There  is  a  difference  of  opinion  upon  this  point,  to  be  sure, 
but  notwithstanding  that,  the  use  of  some  form  of  the  hay  and  straw 
cutter  has  become  nearly  universal  and  is  generally  regarded  as  quite 
indispensable  upon  most  well-conducted  farms.  Machines  for  this 
purpose  are  made  to  be  worked  by  hand,  upon  small  farms,  and  by 
horse  or  steam  power  upon  larger  ones,  where  they  are  capable  of 
reducing  to  chaff  a  ton  and  a  half  of  hay  or  straw  per  hour. 

VI.  VIEWS  ON  AGRICULTURE 

A.  Southern  and  Northern  Agriculture  Compared,  1840,  1850,  1860  l 

The  United  States,  before  the  war,  was  essentially  an  agricultural  nation. 
Both  the  north  and  the  south  had  their  chief  interests  in  the  soil,  and  any  accelera- 
tion or  retardation,  therefore,  of  its  development  along  this  line  was  of  the  greatest 
importance.  The  relative  importance  of  the  two  sections  of  the  country  was  as 
follows: 


Hunt's  Merchants'  Magazine  (New  York,  1860),  XLII,  168-70. 


PUBLIC  LANDS  AND  AGRICULTURE 
EXPORTABLE  PRODUCTS   OF  THE   SOUTH. 


477 


1820 

1830 

1840 

1850 

1859 

Naval  stores  .  . 
Rice 

$      292,000 
1,714,023 

$      321,019 
•    1,986,824 

S     602,520 

I.O42  O76 

$     1,142,713 

2  6?I    ZZ*7 

$     3,695,474 

Tobacco.  .  . 

8,118,188 

8,833,112 

0,883,0^7 

O  Os  I  O2? 

Sugar     

1,500,000 

3,000,000 

5,200,000 

Til  706  I  ZO 

Cotton  

26,309,000 

34,084,883 

74,640,307 

101,834,616 

204,104,923 

Total  

Number  hands 
Product  per 
hand  

$37,934,m 
1,543,688 

$245 

$48,225,838 

2,009,053 

$22^ 

892,268,860 
2,487.355 

$37 

$130,356,059 
3,119,509 

$435 

$262,546,824 

4,000,000 
$65  6 

The  figures  for  naval  stores,  rice,  and  tobacco  are  the  export 
values  of  the  crops.  The  sugar  and  cotton  are  the  values  of  the  whole 
production. 

The  result  is,  that  the  value  per  head  of  these  articles,  which  in- 
creased 16  per  cent  from  1840  to  1850,  increased  50  per  cent  in  the 
last  nine  years.  It  must  not,  however,  be  supposed  that  this  was  all 
the  products  of  that  section.  On  the  other  hand,  the  production  of 
those  exported  articles  formerly  involved  the  purchase  of  food  for  the 
hands  employed  in  the  production.  At  present  a  large  portion  of 
food  is  raised  by  the  same  hands  in  addition.  This  is  a  most  inter- 
esting feature  of  Southern  industry,  yet  but  little  understood.  There 
have  been  no  general  returns  of  production  since  1850,  but  we  may 
compare  the  products  of  leading  articles  as  given  by  the  census  of 
1850:- 


18 

|0 

18; 

0 

North 

South 

North 

South 

Area 

1,1578  737 

871  4=;8 

Population  

I3,s27,2''0 

9,664,656 

Wheat  bush., 

54.,  748,  284. 

30,074,008 

72,607,129 

27,878,81? 

Corn  

124,988,073 

2^2,  1?43,8O2 

243,013,603 

340,  0^7,  ^OI 

Swine  

10,084,970 

16,216,323 

10,343,265 

20,008,948 

Horses  1 

2,097,307 

2,238,362 

(  2,284,344 

2,052,375 

Mules   ) 
Hay    . 

0,402,007 

846,111 

(          40,341 
I  2,8  1  N  484 

518,990 
I  023,158 

Cows.  .          ) 

(  3,481,617 

2,833,338 

Oxen  ...        (      

7,569,022 

7,402,564 

878,366 

822,078 

Other  cattle  ' 

(  4,224,628 

5,469,441 

478  READINGS  IN  ECONOMIC  HISTORY 

These  figures  present  facts  somewhat  different  from  the  popular 
idea,  which  is,  that  for  articles  of  general  agriculture  the  North  and 
West  are  much  in  excess  of  the  South.  The  leading  items  of  food 
and  labor  at  the  South,  as  at  the  North  and  West,  are  cattle,  horses, 
mules,  swine,  and  corn;  "bacon  and  corn  cakes,"  "hog  and  hominy" 
are  the  staples.  Now  the  census  figures  show  that  in  addition  to  the 
great  export  crops  the  South  raises  far  more  corn  and  pork  than  the 
other  sections.  The  South  had,  in  1850,  absolutely  double  the  num- 
ber of  swine  that  the  other  sections  held.  It  raised  109,000,000 
bushels  more  corn  than  the  whole  North  and  West.  It  raised  100 
bushels  of  corn  for  every  black  hand.  The  wheat  was  less  in  actual 
quantity;  but  there  were  raised  five  bushels  of  wheat  for  every  white 
person,  which  is  the  same  ratio  as  at  the  North.  The  South  had  more 
cattle  of  all  kinds  than  the  other  section,  and  it  is  enabled  to  main- 
tain them,  because  it  is  not  compelled  to  house  or  make  hay  for  the 
winter  fodder,  which  are  heavy  drafts  upon  Northern  labor  imposed 
by  the  climate.  The  South  had  horses  and  mules,  2,571,365,  and  the 
North  2,324,685,  an  excess  of  246,680  in  favor  of  the  South,  and  yet 
the  latter  States  raised  only  10  per  cent  of  the  hay  that  was  raised  at 
the  North.  Allowing  the  actual  cost  of  making  hay,  in  labor,  &c., 
to  be  $5  per  ton,  the  same  number  of  cattle  cost  the  North  $44,000,000 
more  to  keep  them  than  at  the  South.  The  hay  expense  is,  however, 
shared  with  the  cattle  of  all  kinds.  These  must  be  fed  in  the  winter 
at  the  North,  and  that  is  not  required  at  the  South.  In  all  that  con- 
cerns agricultural  prosperity  the  South  has  a  decided  advantage. 
The  larger  production  of  hay  at  the  North  has  sometimes  been  appealed 
to  as  an  evidence  of  its  greater  agricultural  wealth,  wyhereas  it  is  only 
an  evidence  of  a  more  disadvantageous  climate.  The  Southern  cattle 
obtain  the  same  quantity  of  food  as  those  of  the  North,  that  is,  a 
quantity  sufficient  for  their  wants,  but  they  obtain  it  themselves. 
Nature  has  it  always  ready  for  them.  At  the  North,  on  the  other 
hand,  men  have  to  cut  the  food  in  the  summer,  cure  and  preserve  it 
for  the  winter,  when  the  Northern  animals  could  not  get  it  for  them- 
selves. Analogous  to  this  is  the  Northern  coal  industry.  The  South 
produces  comparatively  a  small  quantity,  and  needs  but  little  in  pro- 
portion to  the  requirements  of  a  Northern  winter.  If  the  $35,000,000 
worth  of  coal  mined  at  the  North  is  an  evidence  of  wealth,  it  is  also  an 
evidence  of  the  exactions  of  the  climate.  Nearly  all  the  industry 
expended  in  coal  mining  and  hay  making  is  a  tax  upon  Northern  life, 
rather  than  an  evidence  of  wealth.  That  portion  of  coal  which  is 
applied  to  transportation  and  manufactures  is,  of  course,  an  element 


PUBLIC  LANDS  AND  AGRICULTURE  479 

of  production,  but  that  used  as  fuel  is  a  tax.  The  labor  that,  with  a 
climate  as  severe  as  that  at  the  North,  would  be  required  at  the  South 
to  supply  fuel  and  fodder,  is  now  expended  in  raising  cotton,  sugar, 
and  rice  for  export.  If  we  compare  the  weight  and  value  of  the  articles, 
cotton,  butter,  cheese,  tobacco,  sugar,  wool,  rice,  hemp,  and  flax, 
North  and  South,  the  results  are  as  follows: — 

Nine  articles  Quantity  Value 

Northern  States Ibs 2,292,054,661  $  72,294,524 

Southern  States "   2,896,100,602  142,480,235 


Excess  at  the  South $70,195,71 1 

In  these  figures  we  find  how  rapidly  the  Southern  States  have 
concentrated  within  themselves  the  means  of  feeding  the  large  work- 
ing population,  while  they  have  been  enabled  to  throw  off  from  the 
same  working  force  an  annual  surplus  of  those  articles  suitable  for 
export;  and  in  doing  this  it  has  more  distinctly  marked  its  position 
as  the  sole  source  for  the  supply  of  that  great  raw  material  for  human 
clothing,  the  manufacture  of  which  occupies  so  large  a  proportion  of 
the  population  and  capital  of  England  and  Europe.  Not  only  the 
quantity  of  cotton  per  hand  is  as  we  have  seen  increasing,  but  its 
money  value  advances  in  the  ratio  of  the  spread  of  the  markets  for 
the  goods  and  the  prosperity  of  the  people  who  buy  in  those  markets. 
The  production  of  this  article  increases  in  the  ratio  of  the  natural 
increase  of  the  hands  and  of  the  larger  quantities  that  they  can  raise. 
The  progress  of  the  United  States  crop  has  been  in  quantity,  and  in 
the  average  value  at  Liverpool,  in  the  two  last  periods  of  eight  years, 
as  follows: — 

Bales  Ave.  price  Value 

1844  a  1851 18,132,293  s|d.  $    875,789,519 

1852  a  1859 25,488,014  6^d.  1,436,587,562 

Increase 7,355, 791  $560,798,043 

Such  has  been  the  vast  results  of  this  cotton  product  in  the  last 
eight  years;  an  increase  of  40  per  cent  in  quantity  was  attended  by 
an  increase  of  20  per  cent  in  price,  and  there  results  an  increase  of  70 
per  cent  in  net  proceeds.  The  next  eight  years  indicate  a  still  more 
considerable  progress  in  the  same  direction. 


480  READINGS  IN  ECONOMIC  HISTORY 

B.   Agriculture  about  1860  l 

A  good  account  of  American  agriculture  at  the  outbreak  of  the  Civil  War  is 
given  by  an  English  authority  as  follows: 

A  large  portion  of  the  United  States  still  remains  unculti- 
vated, mostly  because  it  has  not  yet  been  occupied.  Land  is  still  so 
plentiful  in  proportion  to  the  population  and  capital,  that  rent  has 
scarcely  begun  to  have  any  existence,  the  farmer  being  in  almost 
every  case  proprietor  of  the  land  which  he  cultivates. 

The  science  of  farming  has  been  so  much  extended  and  improved 
of  late  years,  that  it  is  gradually  giving  to  the  United  States  a  rank 
as  one  of  the  most  carefully  tilled  countries  in  the  world.  It  appears 
from  the  returns  of  the  last  census,  that  the  ratio  of  the  increase  of 
the  principal  agricultural  products  of  the  United  States  has  more 
than  kept  pace  with  the  increase  of  the  population,  and  a  marked 
improvement  has  taken  place  in  the  more  important  agricultural 
operations. 

The  spirit  of  inquiry  and  enterprise  in  agriculture  was  never  more 
general  or  encouraging  than  at  the  present  time.  Societies  have  been 
established  in  all  the  States  for  the  purpose  of  collecting  and  rendering 
as  useful  as  possible  all  the  information  relative  to  agriculture,  and 
in  Massachusetts  a  department  of  the  State  Legislature  has  been 
organized  for  the  superintendence  of  the  agricultural  interests  of  the 
State. 

The  Middle  States,  especially  New  York,  have  attained  a  high 
degree  of  improvement,  consequent  upon  the  efforts  made  to  raise 
the  standard  of  agriculture. 

The  Western  States  are  more  strictly  agricultural  than  any  other 
section,  and  Chicago  and  other  towns  owe  their  existence  entirely  to 
the  mammoth  trade  in  Indian  corn,  wheat,  and  other  farm  products 
supplied  by  the  surrounding  country. 

The  Southern  States,  while  their  main  products  are  cotton,  rice, 
tobacco,  and  sugar,  also  produce  cereals  in  large  quantities. 

The  farms  in  the  States  and  Territories  contain  in  the  aggregate 
163,261,389  acres  improved,  and  246,508,244  acres  unimproved  lands. 
The  unimproved  land  consists  of  that  which  is  occupied  and  necessary 
to  the  enjoyment  of  the  improved,  though  not  itself  reclaimed;  it 
does  not  include  meadow  land.  The  average  size  of  farms  is  203 


1  Descriptive    Handbook    of  America.     By    George    Washington    Bacon   and 
William  George  Larkins  (London,  [i866j),  42-9. 


PUBLIC  LANDS  AND  AGRICULTURE  481 

acres,  the  greatest  average  being  in  California  (4466  acres),  and  the 
smallest  in  Utah  (51  acres).  The  greatest  average  values  of  farms  are 
in  the  District  of  Columbia,  Louisiana,  and  New  Jersey;  and  the  small- 
est average  values  in  Utah,  New  Mexico,  and  Arkansas. 

The  average  value  of  land  per  acre  in  New  England  is  $2o.27c.; 
in  the  Middle  States,  $28.o7c.;  in  the  Southern  States,  $5.340.;  in 
the  South- Western  States,  $6.26c.;  in  the  North- Western  States, 
$n.39C.;  in  California  and  the  organized  Territories,  $1.890.;  in 
Texas,  $1.44  c.  The  proportion  of  the  improved  land  to  the  whole  in 
the  Free  States  is  14.72  per  cent.;  in  the  Slave  States,  10.09  Per  cent.; 
in  the  United  States,  7.71  per  cent.  The  proportion  of  occupied 
land  to  the  whole  in  the  Free  States  is  28.56  per  cent.;  in  the  Slave 
States,  33.17  per  cent.;  in  the  United  States,  20.02  per  cent.  The 
average  value  of  occupied  land  per  acre  in  the  Free  States  is  $19; 
in  the  Slave  States,  $6.09  c. ;  in  the  United  States,  $i  i .  14  c. 

In  general  it  may  be  said  that  the  Middle  and  Western  States  are 
most  productive  in  wheat,  rye,  and  oats;  the  Southern  and  Western 
in  Indian  corn;  and  the  Southern  in  cotton,  sugar,  tobacco,  and  rice. 
Wool  and  Irish  potatoes  are  raised  principally  north  of  lat  34°;  to- 
bacco between  34°  and  41°;  barley,  apples,  and  pears,  north  of  38°; 
hemp,  flax,  and  hops,  north  of  34°;  cotton  between  31°  and  36°;  sugar 
south  of  31°. 

The  quantity  of  wheat  grown  in  1859  amounted  to  171,183,381 
bushels.  In  many  States  the  quantity  grown  has  exceeded  the  means 
of  ready  transportation,  or  the  demands  of  the  market.  It  is,  however, 
to  the  extended  cultivation  of  spring  wheat  in  the  North-Western 
States,  that  the  increase  —  which  has  been  at  the  rate  of  70  per  cent, 
in  ten  years  —  is  due.  The  greatest  wheat-producing  State  is  Illinois; 
then  come  Wisconsin,  Indiana,  Ohio,  Virginia,  Pennsylvania,  New 
York,  Iowa,  and  Michigan.  The  prairie  States  yield  the  largest 
crops. 

Maize,  or  Indian  corn,  furnishing  at  once  food  for  man,  food  for 
beast,  and  manure  for  the  land,  is  cultivated  in  every  State  and  Terri- 
tory of  the  Union,  and  is  undoubtedly  the  popular  crop,  receiving  the 
distinctive  name  of  "corn."  It  is  less  liable  to  failure  than  any  other. 
In  1859,  the  crop  was  830,541,707  bushels,  showing  an  increase  of 
40  per  cent,  since  1849.  A  large  quantity  is  shipped  to  Great  Britain, 
and  every  year  increases  the  demand. 

Barley,  oats,  rye,  buckwheat,  and  flax,  are  grown  in  every  part  of 
the  United  States  —  principally  in  New  York.  Hemp  is  chiefly  raised 
in  New  York,  Kentucky,  and  Missouri.  The  total  product  for  1860 


482  READINGS  IN  ECONOMIC  HISTORY 

being  83,000  tons  of  dew-rotted  hemp,  and  about  4000  tons  water- 
rotted. 

Cotton,  the  great  staple  of  the  Union,  is  chiefly  a  product  of  the 
South.  It  is  the  produce  of  the  herbaceous  or  annual  cotton  plant, 
and  is  of  two  kinds  —  the  Sea  Island  or  long  staple,  and  the  upland  or 
short  staple.  The  former,  which  is  of  superior  quality,  is  grown 
chiefly  in  the  Carolinas  and  Georgia,  on  the  Atlantic,  and  in  some 
parts  of  the  State  of  Texas.  Cotton  was  first  planted  in  the  United 
States  hi  or  about  1787,  and  was  first  exported  in  small  quantities 
in  1790.  Since  then  its  culture  has  become  enormous,  and  the  rapidity 
with  which  it  has  been  developed  is  truly  wonderful.  In  the  beginning 
of  the  present  century,  the  annual  exportation  was  less  than  5000 
bales,  in  1859  it  had  increased  to  5,196,944  bales,  of  400  pounds  each. 
The  whole  crop  is  the  product  of  thirteen  States,  but  is  chiefly  ob- 
tained from  eight  of  them.  Immense  as  is  the  quantity  produced, 
the  demand  is  equal  to  the  supply.  The  civil  war  has  led  to  a  tem- 
porary cessation  of  the  trade,  wrhich,  now  that  peace  is  restored,  will 
doubtless  speedily  regain  its  activity.  Prior  to  the  production  of 
cotton  in  such  vast  quantities  in  the  more  Southern  States,  it  was 
extensively  cultivated  for  domestic  purposes  in  North  Carolina,  Vir- 
ginia, Maryland,  Delaware,  and  Southern  Illinois;  and  it  is  not 
improbable  that  its  cultivation  may  be  re-established  in  some  of 
these  States,  with  profit  to  the  producer  and  advantage  to  the  con- 
sumer. The  number  of  plantations  in  which  upwards  of  five  bales 
were  produced  was,  in  the  year  1859,  74,031. 

The  dairy  products  of  the  United  States  are  large.  Considerable 
quantities  are  shipped  yearly  to  Great  Britain.  The  quantity  of 
butter  produced  in  the  year  1859-60  was  set  down  at  460,509,854 
pounds;  and  the  production  of  cheese  reached  105,875,135  pounds. 

Although  large  quantities  of  sugar  and  molasses  are  imported 
into  the  United  States,  the  product  of  cane  sugar  in  1859  was  302,205 
hogsheads;  and  of  molasses  16,337,080  gallons  —  Louisiana  being  the 
State  where  the  great  bulk  of  American  sugar  is  produced.  A  large 
quantity  of  sugar  is  obtained  from  several  species  of  the  maple  tree, 
that  yielding  the  richest  juice  being  the  rock  or  sugar  maple.  The 
manufacture  is  said  to  have  originated  in  New  England  in  1752,  and 
extended  from  thence  into  the  North-Eastern  States,  where  the  tree 
principally  abounds.  It  is  found  in  beautiful  groves,  called  sugar 
orchards;  and  in  the  months  of  February  and  March,  when  the  days 
grow  warm  and  the  nights  are  frosty,  the  trees  are  bored  with  augurs 
about  two  feet  from  the  ground,  and  from  the  holes  thus  made  the 


PUBLIC  LANDS  AND  AGRICULTURE  483 

sap  exudes,  and  is  collected  in  wooden  troughs,  and  boiled  on  the  spot. 
The  quantity  of  maple  sugar  made  in  1859  was  302,205  hogs-heads. 

Sorghum,  a  species  of  grass,  commonly  known  as  Indian  millet, 
produces  a  saccharine  juice,  which  in  1856  began  to  attract  attention. 
In  1859,  less  than  four  years  from  its  introduction,  the  plant  had  be- 
come a  most  important  agricultural  staple.  It  thrives  wherever 
Indian  corn  will  grow.  It  may  be  cultivated  in  the  same  manner. 
When  fully  grown,  it  is  from  6  to  18  feet  high;  the  stalks  of  i  to  2 
inches  diameter.  The  stalks  yield  on  an  average  about  50  per  cent, 
of  their  weight  in  juice,  or,  to  the  acre,  from  150  to  400  gallons,  and 
about  12  per  cent,  of  sugar.  Excellent  rum  is  made  from  the  seeds. 

In  the  production  of  tobacco,  every  State  and  Territory  has  a 
share,  the  principal  coming  from  Virginia,  Kentucky,  and  Maryland, 
where  it  has  been  the  staple  since  their  first  settlement ;  and  it  is  also 
extensively  grown  in  Kentucky,  Ohio,  Missouri,  and  other  States. 
Besides  the  quantities  required  for  domestic  use,  large  amounts  are 
exported.  Several  of  the  Northern  States  are  showing  a  considerable 
increase  in  the  growth  of  this  staple.  In  1859,  the  total  produce  was 
429,390,771  pounds.  There  are  upwards  of  15,745  plantations  on 
which  3000  pounds  or  more  are  raised. 

The  hay  crop  of  1859  was  19,129,128  tons.  This  crop  is  mainly 
confined  to  the  Northern  States.  In  the  Southern  States,  the  weather 
is  so  mild  as  to  allow  cattle  to  graze  during  the  greater  portion  of  the 
year,  rendering  a  hay  harvest  less  necessary.  The  estimated  value 
of  the  above  crop  is  upwards  of  $150,000,000. 

Rice  was  first  cultivated  in  South  Carolina  in  1694,  and  four  years 
afterwards,  60  tons  were  shipped  to  England.  Since  that  time,  it 
has  been  so  successsfully  culivated,  that  in  1860  it  reached  100  millions 
of  pounds.  South  Carolina  and  Georgia  are  the  principal  producers 
out  of  the  sixteen  States  in  which  it  is  grown.  A  large  amount  is 
exported. 

Hops  are  principally  cultivated  in  New  York,  though  every  State 
and  Territory,  with  the  exception  of  Florida,  New  Mexico,  and  Da- 
cotah,  contributed  to  the  crop  of  1860,  which  amounted  to  upwards 
of  10  millions  of  pounds. 

Potatoes  are  raised  in  every  part  of  the  Union,  the  Irish  potato 
principally  in  the  Northern,  and  the  sweet  potato  chiefly  in  the 
Southern  section.  The  yield  for  1860  was  upwards  of  no  millions 
of  bushels  of  the  former,  and  35  millions  of  the  former  [latter?] 

The  last  returns  upon  the  subject  of  wine  making  show  a  large 
increase  in  an  article  which  promises  to  become  one  of  great  com- 


484  READINGS  IN  ECONOMIC  HISTORY 

mercial  value.  The  wine  culture  has  increased  in  a  number  of  States, 
but  more  particularly  in  Ohio,  California,  and  Kentucky.  These 
three  States  made  nearly  one  million  of  the  1,860,008  gallons  reported 
in  1860. 

The  orchard  products  of  the  United  States  consist  principally 
of  apples  and  pears,  of  which  the  value  in  1860  was  nearly  20  millions 
of  dollars,  showing  an  increase  in  ten  years  of  about  12  millions  of 
dollars;  an  increase  owing  to  the  great  attention  which  has  been 
paid  to  the  introduction  and  cultivation  of  improved  varieties  of 
fruit,  and  the  processes  of  preservation  by  artificial  means,  which  now 
employ  a  large  amount  of  capital. 

The  number  of  acres  devoted  to  the  different  crops  in  1860  were  — 
hay  and  pasturage,  33,000,000;  Indian  corn,  31,000,000;  wheat, 
11,000,000;  oats,  7,500,000;  cotton,  5,000,000;  rye,  1,200,000;  peas 
and  beans,  1,000,000;  Irish  potatoes,  1,000,000;  sweet  potatoes, 
750,000;  buck- wheat,  600,000;  tobacco,  400,000;  sugar,  400,000; 
barley,  300,000;  rice,  175,000;  hemp,  110,000;  flax,  100,000;  or- 
chards, 500,000;  gardens,  500,000;  vineyards,  250,000;  miscel- 
laneous, 1,000,000. 

The  largest  average  crop  per  acre  of  wheat,  was  in  Massachusetts, 
16  bushels;  the  smallest,  in  Georgia,  5  bushels.  Of  rye,  largest, 
Ohio,  25  bushels;  smallest,  Virginia,  5  bushels.  Of  Indian  corn, 
largest,  Connecticut,  40  bushels;  smallest,  South  Carolina,  n  bushels. 
Of  oats,  largest,  Iowa,  36  bushels;  smallest,  North  Carolina,  10 
bushels.  Of  rice,  Florida,  1850  Ibs.,  South  Carolina,  1750  Ibs.,  Lou- 
isiana, 1400  Ibs.  Of  tobacco,  largest,  Missouri,  775  Ibs.;  of  seed 
cotton,  largest,  Texas,  750  -Ibs. ;  of  Irish  potatoes,  largest,  Texas, 
250  bushels;  smallest,  Alabama,  60  bushels;  of  sweet  potatoes,  largest, 
Georgia,  400  bushels. 

The  value  of  the  live  stock  and  domestic  animals  forms  an  im- 
portant item  in  the  statistics  of  the  country.  A  most  satisfactory 
increase  in  the  number  and  varieties  is  shown  by  the  last  returns. 
The  total  value  of  the  live  stock  was,  in  1860,  $1,107,400,216.  The 
horses  numbered  6,115,458;  asses  and  mules,  1,129,553;  working 
oxen,  2,240,075;  milch  cows,  8,728,862;  other  cattle,  14,671,400; 
swine,  32,555,367.  The  number  of  sheep  returned  in  the  last 
census  of  1860  was  23,317,756,  and  the  amount  of  wool  60,511,343 
Ibs.  In  addition  to  the  number  of  sheep  just  given,  it  was  reported 
that  about  1,505,8-10  were  not  included  in  the  returns,  being  owned 
by  other  than  farmers.  The  total  increase  of  sheep  in  ten  years  was 
1,594,536. 


CHAPTER  XV 
CURRENCY,  BANKING,  AND  STATE  DEBTS,  1791-1860 

I.  THE  FIRST  UNITED  STATES  BANK 
A.   Hamilton's  Views  on  the  Bank, 


Among  Alexander  Hamilton's  plans  for  placing  the  new  government  on  a 
sound  financial  basis,  none  was  more  important  than  the  one  which  had  for  its 
end  the  establishment  of  a  United  States  Bank.  Accordingly,  in  1790,  he  sub- 
mitted to  Congress  a  plan  for  such  a  bank,  and  gave  his  reasons  for  his  act  as 
follows: 

The  establishment  of  banks  in  this  country  seems  to  be  recom- 
mended by  reasons  of  a  peculiar  nature.  Previously  to  the  Revolu- 
tion, circulation  was  in  a  great  measure  carried  on  by  paper  emitted 
by  the  several  local  governments.  In  Pennsylvania  alone,  the  quan- 
tity of  it  was  near  a  million  and  a  half  of  dollars.  This  auxiliary  may 
be  said  to  be  now  at  an  end.  And  it  is  generally  supposed  that 
there  has  been,  for  some  time  past,  a  deficiency  of  circulating  medium. 
How  far  that  deficiency  is  to  be  considered  as  real  or  imaginary,  is 
not  susceptible  of  demonstration;  but  there  are  circumstances  and 
appearances,  which,  in  relation  to  the  country  at  large,  countenance 
the  supposition  of  its  reality. 

The  circumstances  are,  besides  the  fact  just  mentioned  respecting 
paper  emissions,  the  vast  tracts  of  waste  land,  and  the  little  advanced 
states  of  manufactures.  The  progressive  settlement  of  the  former, 
while  it  promises  ample  retribution,  in  the  generation  of  future  re- 
sources, diminishes  or  obstructs,  in  the  mean  time,  the  active  wealth 
of  the  country.  It  not  only  draws  off  a  part  of  the  circulating  money, 
and  places  it  in  a  more  passive  state,  but  it  diverts,  into  its  own  chan- 
nels, a  portion  of  that  species  of  labor  and  industry  which  would  other- 
wise be  employed  in  furnishing  materials  for  foreign  trade,  and  which, 
by  contributing  to  a  favorable  balance,  would  assist  the  introduction 
of  specie.  In  the  early  periods  of  new  settlements,  the  settlers  not 

1  Legislative  and-  Documentary  History  of  the  Bank  of  the  United  States,  etc. 
(Washington,  1832),  23-5,  28-9. 


486  READINGS  IN  ECONOMIC  HISTORY 

only  furnish  no  surplus  for  exportation,  but  they  consume  a  part  of 
that  which  is  produced  by  the  labor  of  others.  The  same  thing  is  a 
cause  that  manufactures  do  not  advance,  or  advance  slowly.  And, 
notwithstanding  some  hypotheses  to  the  contrary,  there  are  many 
things  to  induce  a  suspicion,  that  the  precious  metals  will  not  abound 
in  any  country  which  has  not  mines,  or  variety  of  manufactures. 
They  have  been  sometimes  acquired  by  the  sword;  but  the  modern 
system  of  war  has  expelled  this  resource,  and  it  is  one  upon  which  it 
is  to  be  hoped  the  United  States  will  never  be  inclined  to  rely. 

The  appearances  alluded  to  are,  greater  prevalency  of  direct  barter 
in  the  more  interior  districts  of  the  country  which,  however,  has  been 
for  some  time  past  gradually  lessening,  and  greater  difficulty,  gener- 
ally, in  the  advantageous  alienation  of  improved  real  estate,  which, 
also,  has  of  late  diminished,  but  is  still  seriously  felt  in  different  parts 
of  the  Union.  The  difficulty  of  getting  money,  which  has  been  a 
general  complaint,  is  not  added  to  the  number,  because  it  is  the 
complaint  of  all  times,  and  one  in  which  imagination  must  ever  have 
too  great  scope  to  permit  an  appeal  to  it. 

If  the  supposition  of  such  a  deficiency  be  in  any  degree  founded, 
and  some  aid  to  circulation  be  desirable,  it  remains  to  inquire  what 
ought  to  be  the  nature  of  that  aid. 

The  emitting  of  paper  money  by  the  authority  of  Government 
is  wisely  prohibited  to  the  individual  States  by  the  national  con- 
stitution, and  the  spirit  of  that  prohibition  ought  not  to  be  disregarded 
by  the  Government  of  the  United  States.  Though  paper  emissions, 
under  a  general  authority,  might  have  some  advantages  not  appli- 
cable, and  be  free  from  some  disadvantages  which  are  applicable  to 
the  like  emissions  by  the  States,  separately,  yet  they  are  of  a  nature 
so  liable  to  abuse  —  and,  it  may  even  be  affirmed,  so  certain  of  being 
abused  —  that  the  wisdom  of  the  Government  will  be  shown,  in  never 
trusting  itself  with  the  use  of  so  seducing  and  dangerous  an  expedient. 
In  times  of  tranquillity,  it  might  have  no  ill  consequence;  it  might 
even  perhaps  be  managed  in  a  way  to  be  productive  of  good;  but,  in 
great  and  trying  emergencies,  there  is  almost  a  moral  certainty  of  its 
becoming  mischievous.  The  stamping  of  paper  is  an  operation  so 
much  easier  than  the  laying  of  taxes,  that  a  government  in  the  prac- 
tice of  paper  emissions,  would  rarely  fail,  in  any  such  emergency,  to 
indulge  itself  too  far  in  the  employment  of  that  resource,  to  avoid  as 
much  as  possible  one  less  auspicious  to  present  popularity.  If  it 
should  not  even  be  carried  so  far  as  to  be  rendered  an  absolute  bubble, 
it  would  at  least  be  likely  to  be  extended  to  a  degree  which  would  occa- 


CURRENCY,  BANKING,   AND   STATE  DEBTS  487 

sion  an  inflated  and  artificial  state  of  things,  incompatible  with  the 
regular  and  prosperous  course  of  the  political  economy. 

Among  other  material  differences  between  a  paper  currency,  issued 
by  the  mere  authority  of  government,  and  one  issued  by  a  bank, 
payable  in  coin,  is  this:  that,  in  the  first  case,  there  is  no  standard  to 
which  an  appeal  can  be  made,  as  to  the  quantity  which  will  only  satisfy, 
or  which  will  surcharge  the  circulation;  in  the  last,  that  standard 
results  from  the  demand.  If  more  should  be  issued  than  is  necessary, 
it  will  return  upon  the  bank.  Its  emissions,  as  elsewhere  intimated, 
must  always  be  in  a  compound  ratio  to  the  fund  and  the  demand; 
whence  it  is  evident,  that  there  is  a  limitation  in  the  nature  of  the 
thing;  while  the  discretion  of  the  government  is  the  only  measure  of 
the  extent  of  the  emissions,  by  its  own  authority. 

This  consideration  further  illustrates  the  danger  of  emissions  of 
that  sort,  and  the  preference  which  is  due  to  bank  paper. 

The  payment  of  the  interest  of  the  public  debt,  at  thirteen  dif- 
ferent places,  is  a  weighty  reason,  peculiar  to  our  immediate  situation, 
for  desiring  a  bank  circulation.  Without  a  paper  in  general  currency, 
equivalent  to  gold  and  silver,  a  considerable  proportion  of  the  specie 
of  the  country  must  always  be  suspended  from  circulation,  and  left 
to  accumulate,  preparatory  to  each  day  of  payment;  and  as  often 
as  one  approaches,  there  must  in  several  cases  be  an  actual  trans- 
portation of  the  metals,  at  both  expense  and  risk,  from  their  natural 
and  proper  reservoirs,  to  distant  places.  This  necessity  will  be  felt 
very  injuriously  to  the  trade  of  some  of  the  States;  and  will  embarrass, 
not  a  little,  the  operations  of  the  treasury  in  those  States.  It  will  also 
obstruct  those  negotiations,  between  different  parts  of  the  Union, 
by  the  instrumentality  of  treasury  bills,  which  have  already  afforded 
valuable  accommodations  to  trade  in  general. 

Assuming  it,  then,  as  a  consequence,  from  what  has  been  said, 
that  a  national  bank  is  a  desirable  institution,  two  inquiries  emerge: 
Is  there  no  such  institution,  already  in  being,  which  has  a  claim  to 
that  character,  and  which  supersedes  the  propriety  or  necessity  of 
another?  If  there  be  none,  what  are  the  principles  upon  which  one 
ought  to  be  established? 

There  are  at  present  three  banks  in  the  United  States:  that  of 
North  America,  established  in  the  city  of  Philadelphia;  that  of  New 
York,  established  in  the  city  of  New  York;  .that  of  Massachusetts, 
established  in  the  town  of  Boston.  Of  these  three,  the  first  is  the  only 
one  which  has  at  any  time  had  a  direct  relation  to  the  Government 
of  the  United  States, 


488  READINGS  IN  ECONOMIC  HISTORY 

The  Bank  of  North  America  originated  in  a  resolution  of  Congress 
of  the  26th  of  May,  1781,  founded  upon  a  proposition  of  the  Super- 
intendent of  Finance,  which  was  afterwards  carried  into  execution  by 
an  ordinance  of  the  3ist  of  December  following,  entitled  "An  ordi- 
nance to  incorporate  the  subscribers  to  the  Bank  of  North  America." 

The  aid  afforded  to  the  United  States  by  this  institution,  during 
the  remaining  period  of  the  war,  was  of  essential  consequence;  and  its 
conduct  towards  them  since  the  peace,  has  not  weakened  its  title  to 
their  patronage  and  favor.  So  far,  its  pretensions  to  the  character 
in  question  are  respectable;  but  there  are  circumstances  which  mili- 
tate against  them,  and  considerations  which  indicate  the  propriety 
of  an  establishment  on  different  principles. 

The  directors  of  this  bank,  on  behalf  of  their  constituents,  have 
since  accepted  and  acted  under  a  new  charter  from  the  State  of  Penn- 
sylvania, materially  variant  from  their  original  one,  and  which  so 
narrows  the  foundation  of  the  institution,  as  to  render  it  an  incom- 
petent basis  for  the  extensive  purposes  of  a  national  bank.  .  .  . 

The  order  of  the  subject  leads  next  to  an  inquiry  into  the  principles 
upon  which  the  national  bank  ought  to  be  organized. 

The  situation  of  the  United  States  naturally  inspires  a  wish  that 
the  form  of  the  institution  could  admit  of  a  plurality  of  branches. 
But  various  considerations  discourage  from  pursuing  this  idea.  The 
complexity  of  such  a  plan  would  be  apt  to  inspire  doubts,  which  might 
deter  from  adventuring  in  it.  And  the  practicability  of  a  safe  and 
orderly  administration,  though  not  to  be  abandoned  as  desperate, 
cannot  be  made  so  manifest  in  perspective,  as  to  promise  the  removal 
of  those  doubts,  or  to  justify  the  Government  in  adopting  the  idea  as 
an  original  experiment.  The  most  that  would  seem  advisable,  on 
this  point,  is  to  insert  a  provision  which  may  lead  to  it  hereafter,  if 
experience  shall  more  clearly  demonstrate  its  utility,  and  satisfy  those 
who  may  have  the  direction,  that  it  may  be  adopted  with  safety. 
It  is  certain  that  it  would  have  some  advantages,  b'oth  peculiar  and 
important.  Besides  more  general  accommodation,  it  would  lessen 
the  danger  of  a  run  upon  the  bank. 

The  argument  against  it  is,  that  each  branch  must  be  under  a 
distinct,  though  subordinate  direction,  to  which  a  considerable  lati- 
tude of  discretion  must  of  necessity  be  entrusted.  And  as  the  property 
of  the  whole  institution  would  be  liable  for  the  engagements  of  each 
part,  that  and  its  credit  would  be  at  stake,  upon  the  prudence  of 
the  directors  of  every  part.  The  mismanagement  of  either  branch 
might  hazard  serious  disorder  in  the  whole. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  489 

Another  wish,  dictated  by  the  particular  situation  of  the  country 
is,  that  the  bank  could  be  so  constituted  as  to  be  made  an  immediate 
instrument  of  loans  to  the  proprietors  of  land;  but  this  wish  also 
yields  to  the  difficulty  of  accomplishing  it.  Land  is  alone  an  unfit 
fund  for  a  bank  circulation.  If  the  notes  issued  upon  it  were  not  to 
be  payable  in  coin,  on  demand,  or  at  a  short  date,  this  would  amount 
to  nothing  more  than  a  repetition  of  the  paper  emissions,  which  are 
now  exploded  by  the  general  voice.  If  the  notes  are  to  be  payable 
in  coin,  the  land  must  first  be  converted  into  it  by  sale,  or  mortgage. 
The  difficulty  of  effecting  the  latter,  is  the  very  thing  which  begets 
the  desire  of  finding  another  resource,  and  the  former  would  not  be 
practicable  on  a  sudden  emergency,  but  with  sacrifices  which  would 
make  the  cure  worse  than  the  disease.  Neither  is  the  idea  of  consti- 
tuting the  fund  partly  of  coin  and  partly  of  land,  free  from  impedi- 
ments. These  two  species  of  property  do  not,  for  the  most  part, 
unite  in  the  same  hands.  Will  the  moneyed  man  consent  to  enter 
into  a  partnership  with  the  landholder,  by  which  the  latter  will  share 
in  the  profits  which  will  be  made  by  the  money  of  the  former?  The 
money,  it  is  evident,  will  be  the  agent  or  efficient  cause  of  the  profits  — 
the  land  can  only  be  regarded  as  an  additional  security.  It  is  not 
difficult  to  forsee  that  an  union,  on  such  terms,  will  not  be  readily 
formed.  If  the  landholders  are  to  procure  the  money  by  sale  or  mort- 
gage of  a  part  of  their  lands,  this  they  can  as  well  do  when  the  stock 
consists  wholly  of  money,  as  if  it  were  to  be  compounded  of  money 
and  land. 

To  procure  for  the  landholders  the  assistance  of  loans,  is  the 
great  desideratum.  Supposing  other  difficulties  surmounted,  and  a 
fund  created,  composed  partly  of  coin  and  partly  of  land,  yet  the 
benefit  contemplated  could  only  then  be  obtained,  by  the  bank's 
advancing  them  its  notes  for  the  whole,  or  part,  of  the  value  of  the 
lands  they  had  subscribed  to  the  stock.  If  this  advance  was  small, 
the  relief  aimed  at  would  not  be  given;  if  it  was  large,  the  quantity 
of  notes  issued  would  be  a  cause  of  distrust;  and,  if  received  at  all, 
they  would  be  likely  to  return  speedily  upon  the  bank  for  payment; 
which,  after  exhausting  its  coin,  might  be  under  a  necessity  of  turning 
its  lands  into  money,  at  any  price  that  could  be  obtained  for  them, 
to  the  irreparable  prejudice  of  the  proprietors. 


490  READINGS  IN  ECONOMIC  HISTORY 

B.   Public  and  Private  Finances  after  the  Dissolution  of  the  Bank, 

1812-1815  1 

In  1811  President  Madison  vetoed  a  bill  to  recharter  the  First  United  States 
Bank.  Consequently  the  bank  was  forced  to  wind  up  its  affairs;  and  in  its  place 
many  state  banks  sprang  up.  During  the  war  that  followed,  practically  all  these 
banks  found  it  impossible  to  redeem  their  notes,  which  formed  the  larger  part  of  the 
circulating  medium.  These  notes  depreciated  in  value,  and  many  of  them  be.came 
entirely  worthless.  The  government  was  hard  pressed  for  funds  and  used  the 
banks  as  best  it  could  to  finance  the  war.  The  situation  has  been  well  described 
as  follows: 

The  deficiency  in  the  amount  of  bank  capital  and  bank  accommo- 
dations, apprehended  from  the  winding  up  of  the  National  Bank, 
was  more  than  supplied  by  the  new  state  banks  which  sprung  up  in 
consequence  of  its  destruction.  In  three  years,  1810,  1811,  1812, 
forty-one  new  state  banks  were  chartered,  with  an  aggregate  capital  of 
some  thirty-six  millions;  so  that  about  the  commencement  of  the  war 
with  Great  Britain,  the  total  number  of  banks  in  the  United  States 
was  upwards  of  one  hundred  and  twenty,  and  the  aggregate  bank 
capital,  a  part  of  which,  however,  was  only  nominal,  about  seventy- 
six  millions. 

The  government,  out  of  tenderness  for  the  people,  or  a  tender 
regard  for  their  own  popularity,  perhaps  a  mixture  of  both,  had 
resolved  to  carry  on  the  war  without  the  imposition  of  taxes.  They 
relied  upon  loans.  But  the  loan-market  of  Europe  was  shut  against 
them;  and  at  home  a  large  proportion  of  the  monied  men  were  opposed 
to  the  war,  and  not  well  inclined  to  furnish  the  means  for  carrying  it 
on.  The  government  were  obliged  to  tempt  borrowers  by  the  offer 
of  very  advantageous  terms;  and  as  the  war  went  on,  and  their 
necessities  increased,  the  terms  they  offered  became  still  more  favor- 
able. Even  the  most  tempting  offers  proved  no  match  for  the  political 
prejudices  of  Eastern  capitalists, —  a  most  striking  proof  that  avarice 
is  a  passion  less  strong  than  hate.  But  in  the  Middle  and  Southern 
States,  where  the  war  was  popular,  those  who  had  money  or  could 
command  it,  were  pushed  by  the  double  impulse  of  patriotism  and 
interest  to  subscribe  to  the  government  loans.  In  some  cases,  the 
banks  themselves  became  the  lenders;  in  most  others,  they  lent  to 
the  individuals,  who  lent  to  the  government.  Things  went  on  in  this 
way  till  after  the  middle  of  the  year  1814.  The  government  was 
then  in  the  greatest  distress  for  money,  and  more  clamorous  than 

1  Banks,  Banking,  and  Paper  Currencies.  By  Richard  Hildreth  (Boston, 
1840),  64-8. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  491 

ever  for  loans.  But  the  banks  had  already  gone  to  the  utmost  limit 
of  their  means;  their  capitals  were  all  invested;  they  had  put  more 
notes  into  circulation  than  they  could  keep  there;  and  provided  they 
continued  to  redeem  those  notes,  —  that  is,  to  pay  their  own  debts,  — 
it  would  be  impossible  for  them  to  lend  the  government  any  more 
money,  or  to  enable  individuals  to  lend  it;  indeed  a  speedy  contrac- 
tion of  existing  loans  was  absolutely  necessary. 

Examples  of  successful  fraud  seldom  lack  imitators.  In  this 
exigency,  the  bank  directors  bethought  themselves  of  what  the  Bank 
of  England  had  done,  and  was  still  doing.  They  well  knew  how 
profitable  a  speculation  the  stoppage  of  specie  payment  had  proved 
to  that  bank; — it  was  accordingly  suggested  among  them,  and  the 
resolution  was  presently  adopted,  to  suspend  specie  payments. 

To  carry  this  scheme  into  successful  operation,  it  was  necessary 
first  to  secure  the  tacit  approbation  of  the  government;  for  if  the 
government  would  consent  to  go  on  receiving  their  notes  in  payment 
of  all  public  dues,  it  would  give  them  a  credit,  which  would  sustain 
their  circulation.  The  government  was  at  the  mercy  of  the  banks. 
Overwhelmed  with  financial  distresses  brought  upon  it  by  neglect  to 
provide  sufficient  pecuniary  means  for  carrying  on  the  war,  it  had  no 
power  to  refuse;  for  if  the  banks  did  not  supply  money,  where  was  it 
to  be  had? 

Accordingly  the  government  gave  a  tacit  consent  to  the  new  ar- 
rangement, and  in  the  month  of  August,  the  Banks  of  Philadelphia, 
Baltimore,  and  New  York,  by  a  compact  among  their  directors,  sus- 
pended specie  payments,  simultaneously, —  an  example  which,  be- 
fore the  end  of  the  year,  was  followed,  with  but  one  or  two  exceptions, 
by  all  the  banks  of  the  Middle,  Southern,  and  Western  States. 

This  suspension  of  specie  payments  did  not  extend  to  New  England. 
The  bank  directors  there  did  not  choose  to  become  parties  to  this 
scheme  for  enriching  themselves,  and  assisting  the  government,  at 
the  expense  of  honesty  and  their  creditors;  nor  would  the  people, 
a  majority  of  whom  were  opposed  to  the  war,  ever  have  submitted 
to  so  outrageous  an  imposition.  The  Philadelphia  banks  were  under- 
stood to  have  taken  the  lead  in  this  business  of  the  suspension,  and  in 
imitation  of  what  had  been  done  in  London,  when  the  Bank  of  Eng- 
land suspended  payment,  a  public  meeting  of  merchants  was  held  to 
sanction  the  measure,  and  to  sustain  the  credit  of  the  banks.  As  the 
alleged  motive  of  the  suspension  was  so  very  patriotic,  as  the  banks 
pledged  themselves  to  resume  upon  the  return  of  peace,  and  as  the 
demand  for  provisions  and  manufactures,  created  by  the  war,  gave 


492  READINGS  IN  ECONOMIC  HISTORY 

a  great  activity  to  business,  the  suspension  was  submitted  to  by  the 
people  without  a  murmur. 

Owing  to  the  extensive  and  very  advantageous  loans  which  the 
banks  had  made  to  the  government,  the  business  of  banking  had 
become  very  profitable,  and  the  dividends  were  high.  As  always 
happens,  there  was  a  rush  to  participate  in  these  high  profits;  and  it 
thus  came  about,  that  just  about  the  time  of  the  suspension  of  specie 
payments,  a  great  number  of  new  banks  came  into  existence,  which 
thus  commenced  their  operations,  unrestrained  by  that  necessary 
check  of  payment  on  demand,  by  which  alone  the  issues  of  a  bank 
can  be  safely  regulated.  It  was  about  this  time  that  the  State  of 
Pennsylvania  had  chartered  thirty-seven  new  banks,  by  a  single  act, 
many  of  which  took  advantage  of  the  suspension  of  specie  payments 
to  go  into  operation  without  any  solid  capital  whatever.  The  same 
causes  gave  rise  to  the  establishment  of  new  banks  in  other  states. 
Almost  all  these  institutions,  put  into  operation  during  the  suspen- 
sion of  specie  payments,  were  mere  speculative  concerns,  not  pos- 
sessed of  any  substantial  means  whatever. 

The  suspension,  it  was  said,  was  to  continue  only  during  the  war. 
Peace  came  in  five  months;  but  the  banks  gave  not  the  slightest 
indication  of  any  desire  to  return  to  honest  courses.  The  people, 
not  well  acquainted  with  the  subject,  purposely  puzzled  and  misled 
by  the  specious  arguments  of  the  bank  directors,  and  those  who  were 
interested,  or  who  supposed  themselves  interested,  in  the  continuance 
of  the  suspension,  and  deceived  by  the  apparent  prosperity  of  business, 
under  this  new  system  of  banking,  did  not  move  in  the  matter.  As 
to  the  government,  it  was  still  involved  in  the  deepest  financial  em- 
barrassment. The  treasury  overflowed  with  "unconvertible"  bank 
paper;  but  the  greatest  difficulty  was  experienced  in  meeting  the 
heavy  demands  which  fell  due  in  the  Eastern  States,  where  nothing 
would  be  accepted  in  payment  except  specie  or  notes  equivalent 
to  specie. 

The  banks  therefore  went  on  to  suit  themselves;  and  the  years 
1815,  1816,  may  be  well  marked  in  the  American  calendar,  as  the 
jubilee  of  swindlers  and  the  Saturnalia  of  non-specie-paying  banks. 
Throughout  the  whole  country,  New  England  excepted,  it  required 
no  capital  to  set  up  a  bank.  All  that  was  wanted  was  a  charter;  and 
influential  politicians  easily  obtained  charters  from  the  blind  party 
confidence  or  interested  votes  of  the  state  legislatures. 

The  banks,  all  through  the  country,  immediately  commenced 
lending  their  paper  to  all  who  could  give  any  tolerable  security. 


CURRENCY,   BANKING,   AND   STATE   DEBTS  493 

This  over  issue  of  notes  soon  produced  a  depreciation.  Depreciation 
produced  a  rise  in  prices;  the  apparent  value  of  all  kinds  of  property 
suddenly  went  up,  and  the  people  imagined  they  were  never  growing 
rich  so  fast.  Business  and  all  kinds  of  speculation  were  uncommonly 
brisk;  the  dividends  made  by  the  banks  were  enormous. 

This  description  does  not  apply  to  New  England.  None  of  this 
artificial  stimulus  was  felt  there.  In  fact,  that  part  of  the  country 
was  subjected  to  a  particular  depression;  for  the  foreign  trade  left 
Boston  and  the  other  New  England  ports,  where  the  duties  were 
demanded  in  specie  or  notes  equivalent  to  specie,  and  concentrated 
at  Philadelphia,  Baltimore  and  other  southern  cities,  where  the  cur- 
rency in  which  duties  were  paid  had  depreciated  twenty-five  per  cent 
and  upwards.  Thus,  by  one  of  the  effects  of  this  public  fraud,  the 
New  Englanders  were  punished  for  being  honest;  and  those  places 
in  which  swindling  was  carried  to  the  greatest  extent,  and  the  greatest 
depreciation  in  the  currency  produced,  obtained,  as  the  reward  of  their 
villainy,  a  monopoly  of  the  foreign  trade. 


II.   SECOND  UNITED  STATES  BANK 

A.   Necessity  of  a  United  States  Bank  after  the  War  of  1812  l 

In  1816  Congress  chartered  the  Second  United  States  Bank  for  a  period  of 
twenty  years.  Fourteen  years  later  a  committee  of  the  House  of  Representatives 
described  the  condition  of  the  currency  at  the  end  of  the  War  of  1812,  and  explained 
how  the  bank  had  assisted  the  government  in  restoring  it  to  a  sound  basis.  This 
committee  reported  hi  part : 

The  committee  will  now  present  a  brief  exposition  of  the  state  of 
currency  at  the  close  of  the  war;  of  the  injury  which  resulted  from  it, 
as  well  to  the  Government  as  to  the  community;  and  their  reasons  for 
believing  that  it  could  not  have  been  restored  to  a  sound  condition, 
and  cannot  now  be  preserved  in  that  condition,  without  the  agency 
of  such  an  institution  as  the  Bank  of  the  United  States. 

The  price  current  appended  to  this  report  will  exhibit  a  scale  of 
depreciation  in  the  local  currency,  ranging,  through  various  degrees, 
to  twenty,  and  even  to  twenty-five  per  cent.  Among  the  principal 
Eastern  cities,  Washington  and  Baltimore  were  the  points  at  which 
the  depreciation  was  greatest.  The  paper  of  the  banks  in  these  places 
was  from  twenty  to  twenty-two  per  cent,  below  par.  At  Philadelphia 


1  Legislative  and  Documentary  History  of  the  Bank  of  the  United  States,  etc. 
(Washington,  1832),  742-3. 


494  READINGS  IN  ECONOMIC  HISTORY 

the  depreciation  was  considerably  less,  though,  even  there,  it  was 
from  seventeen  to  eighteen  per  cent.  In  New  York  and  Charleston, 
it  was  from  seven  to  ten  per  cent.  But,  in  the  interior  of  the  country, 
where  banks  were  established,  the  depreciation  was  even  greater  than 
at  Washington  and  Baltimore.  In  the  western  part  of  Pennsylvania, 
and  particularly  at  Pittsburg,  it  was  twenty-five  per  cent.  These 
statements,  however,  of  the  relative  depreciation  of  bank  paper  at 
various  places,  as  compared  with  specie,  give  a  very  inadequate  idea 
of  the  enormous  evil  inflicted  upon  the  community  by  the  excessive 
issues  of  bank  paper.  No  proposition  is  better  established  than  that 
the  value  of  money,  whether  it  consists  of  specie  or  paper,  is  depre- 
ciated in  exact  proportion  to  the  increase  of  its  quantity,  in  any 
given  state  of  the  demand  for  it.  If,  for  example,  the  banks,  in  1816, 
doubled  the  quantity  of  the  circulating  medium  by  their  excessive 
issues,  they  produced  a  general  degradation  of  the  entire  mass  of  the 
currency,  including  gold  and  silver,  proportioned  to  the  redundancy 
of  the  issues,  and  wholly  independent  of  the  relative  depreciation  of 
bank  paper  at  different  places,  as  compared  with  specie.  The 
nominal  money  price  of  every  article  was,  of  course,  one  hundred 
per  cent,  higher  than  it  would  have  been,  but  for  the  duplication  of 
the  quantity  of  the  circulating  medium.  Money  is  nothing  more  nor 
less  than  the  measure  by  which  the  relative  value  of  all  articles  of 
merchandise  is  ascertained.  If,  when  the  circulating  medium  is  fifty 
millions,  an  article  should  cost  one  dollar,  it  would  certainly  cost 
two,  if,  without  any  increase  of  the  uses  of  a  circulating  medium,  its 
quantity  should  be  increased  to  one  hundred  millions.  This  rise  in 
the  price  of  commodities,  or  depreciation  in  the  value  of  money,  as 
compared  with  them,  would  not  be  owing  to  the  want  of  credit  in  the 
bank  bills,  of  which  the  currency  happened  to  be  composed.  It  would 
exist,  though  these  bills  were  of  undoubted  credit,  and  convertible 
into  specie  at  the  pleasure  of  the  holder,  and  would  result  simply 
from  the  redundancy  of  their  quantity.  It  is  important  to  a  just 
understanding  of  the  subject,  that  the  relative  depreciation  of  bank 
paper  at  different  places,  as  compared  with  specie,  should  not  be  con- 
founded with  this  general  depreciation  of  the  entire  mass  of  the  cir- 
culating medium,  including  specie.  Though  closely  allied,  both  in 
their  causes  and  effects,  they  deserve  to  be  separately  considered. 

The  evils  resulting  from  the  relative  depreciation  of  bank  paper 
at  different  places,  are  more  easily  traced  to  their  causes,  more  pal- 
pable in  their  nature,  and,  consequently,  more  generally  understood 
by  the  community.  Though  much  less  ruinous  than  the  evils  re- 


CURRENCY,   BANKING,   AND   STATE  DEBTS  495 

suiting  from  the  general  depreciation  of  the  whole  currency,  they  are 
yet  of  sufficient  magnitude  to  demand  a  full  exposition. 

A  very  serious  evil,  already  hinted  at,  which  grew  out  of  the  rela- 
tive depreciation  of  bank  paper,  at  the  different  points  of  importation, 
was  its  inevitable  tendency  to  draw  all  the  importations  of  foreign 
merchandise  to  the  cities  where  the  depreciation  was  greatest,  and 
divert  them  from  those  where  the  currency  was  comparatively  sound. 
If  the  Bank  of  the  United  States  had  not  been  established,  and  the 
Government  had  been  left  without  any  alternative  but  to  receive  the 
depreciated  local  currency,  it  is  difficult  to  imagine  the  extent  to  which 
the  evasion  of  the  revenue  laws  would  have  been  carried.  Every 
State  would  have  had  an  interest  to  encourage  the  excessive  issues  of 
its  banks,  and  increase  the  degradation  of  its  currency,  with  a  view 
to  attract  foreign  commerce.  Even  in  the  condition  which  the  cur- 
rency had  reached  in  1816,  Boston,  and  New  York,  and  Charleston, 
would  have  found  it  advantageous  to  derive  the  supplies  of  foreign 
merchandise  through  Baltimore;  and  commerce  would,  undoubtedly, 
have  taken  that  direction,  had  not  the  currency  been  corrected.  To 
avoid  this  injurious  diversion  of  foreign  import,  Massachusetts,  and 
New  York,  and  South  Carolina,  would  have  been  driven,  by  all 
motives  of  self  defence  and  self  interest,  to  degrade  their  respective 
currencies  at  least  to  a  par  with  the  currency  of  Baltimore;  and  thus 
a  rivalry  in  the  career  of  depreciation  would  have  sprung  up,  to  which 
no  limit  can  be  assigned.  As  the  tendency  of  this  state  of  things 
would  have  been  to  cause  the  largest  portion  of  the  revenue  to  be 
collected  at  a  few  places,  and  in  the  most  depreciated  of  the  local 
currency,  it  would  have  followed  that  a  very  small  part  of  that 
revenue  would  have  been  disbursed  at  the  points  where  it  was  collected. 
The  Government  would,  consequently,  have  been  compelled  to  sus- 
tain a  heavy  loss  upon  the  transfer  of  its  funds  to  the  points  of  expendi- 
ture. The  annual  loss  which  would  have  resulted  from  these  causes 
alone,  cannot  be  estimated  at  a  less  sum  than  two  millions  of  dollars. 

But  the  principal  loss  which  resulted  from  the  relative  deprecia- 
tions of  bank  paper  at  different  places,  and  its  want  of  general  credit, 
was  that  sustained  by  the  community  in  the  great  operations  of  com- 
mercial exchange.  The  extent  of  these  operations  annually,  may  be 
safely  estimated  at  sixty  millions  of  dollars.  Upon  this  sum,  the  loss 
sustained  by  the  merchants,  and  planters,  and  farmers,  and  manu- 
facturers, was  not  probably  less  than  an  average  of  ten  per  cent., 
being  the  excess  of  the  rate  of  exchange  between  its  natural  rate  in 
a  sound  state  of  the  currency,  and  beyond  the  rate  to  which  it  has 


496  READINGS  IN  ECONOMIC  HISTORY 

been  actually  reduced  by  the  operations  of  the  Bank  of  the  United 
States.  It  will  be  thus  perceived,  that  an  annual  tax  of  six  millions 
of  dollars  was  levied  from  the  industrious  and  productive  classes,  by 
the  large  moneyed  capitalists  in  our  commercial  cities,  who  were 
engaged  in  the  business  of  brokerage.  A  variously  depreciated  cur- 
rency, and  a  fluctuating  state  of  the  exchanges,  open  a  wide  and 
abundant  harvest  to  the  money  brokers;  and  it  is  not,  therefore, 
surprising,  that  they  should  be  opposed  to  an  institution,  which,  at 
the  same  time  that  it  has  relieved  the  community  from  the  enormous 
tax  just  stated,  has  deprived  them  of  the  enormous  profits  which  they 
derived  from  speculating  in  the  business  of  exchange.  In  addition  to 
the  losses  sustained  by  the  community,  in  the  great  operations  of 
exchange,  extensive  losses  were  suffered  throughout  the  interior  of 
the  country  in  all  the  smaller  operations  of  trade,  as  well  as  by  the 
failure  of  the  numerous  paper  banks,  puffed  into  a  factitious  credit 
by  fraudulent  artifices,  and  having  no  substantial  basis  of  capital 
to  ensure  the  redemption  of  their  bills. 

B.  President  Jackson's  Veto  of  the  Bank  Bill  in  1832  l 

Despite  the  assistance  the  Second  United  States  Bank  had  rendered  in  restoring 
the  currency  and  in  placing  the  banking  of  the  country  on  a  sound  basis,  there  were 
those  who  believed  that  its  existence  was  contrary  to  the  Constitution  and  that  it 
was  a  menace  to  the  government.  Notable  among  the  public  men  who  opposed 
the  bank  was  President  Jackson. 

In  1829  he  had  expressed  doubt  as  to  the  necessity  or  the  desirability  of  the 
bank.  Later,  the  bank  was  charged  with  meddling  in  politics.  Friends  of  the 
bank  succeeded  in  1832  in  having  Congress  pass  a  bill  rechartering  it  for  a  term  of 
twenty  years.  President  Jackson  vetoed  the  bill  on  several  grounds,  one  of  which 
was  that  the  bank  was  a  monopoly  and  hence  inexpedient. 

The  bill  "to  modify  and  continue"  the  act  entitled  "An  act  to 
incorporate  the  subscribers  to  the  Bank  of  the  United  States"  was 
presented  to  me  on  the  4th  July  instant.  Having  considered  it  with 
that  solemn  regard  to  the  principles  of  the  Constitution  which  the 
day  was  calculated  to  inspire,  and  come  to  the  conclusion  that  it 
ought  not  to  become  a  law,  I  herewith  return  it  to  the  Senate,  in  which 
it  originated,  with  my  objections. 

A  bank  of  the  United  States  is  in  many  respects  convenient  for  the 
Government  and  useful  to  the  people.  Entertaining  this  opinion,  and 
deeply  impressed  with  the  belief  that  some  of  the  powers  and  privi- 

1  Messages  and  Papers  of  the  Presidents.  Edited  by  James  D.  Richardson 
([Washington],  1895-1903),  II,  576-8. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  497 

leges  possessed  by  the  existing  bank  are  unauthorized  by  the  Con- 
stitution, subversive  of  the  rights  of  the  States,  and  dangerous  to 
the  liberties  of  the  people,  I  felt  it  my  duty  at  an  early  period  of  my 
Administration  to  call  the  attention  of  Congress  to  the  practicability 
of  organizing  an  institution  combining  all  its  advantages  and  obvi- 
ating these  objections.  I  sincerely  regret  that  in  the  act  before  me 
I  can  perceive  none  of  those  modifications  of  the  bank  charter  which 
are  necessary,  in  my  opinion,  to  make  it  compatible  with  justice, 
with  sound  policy,  or  with  the  Constitution  of  our  country. 

The  present  corporate  body,  denominated  the  president,  directors, 
and  company  of  the  Bank  of  the  United  States,  will  have  existed  at 
the  time  this  act  is  intended  to  take  effect  twenty  years.  It  enjoys 
an  exclusive  privilege  of  banking  under  the  authority  of  the  General 
Government,  a  monopoly  of  its  favor  and  support,  and,  as  a  neces- 
sary consequence,  almost  a  monopoly  of  the  foreign  and  domestic 
exchange.  The  powers,  privileges,  and  favors  bestowed  upon  it  in 
the  original  charter,  by  increasing  the  value  of  the  stock  far  above  its 
par  value,  operated  as  a  gratuity  of  many  millions  to  the  stockholders. 

An  apology  may  be  found  for  the  failure  to  guard  against  this 
result  in  the  consideration  that  the  effect  of  the  original  act  of  incor- 
poration could  not  be  certainly  foreseen  at  the  time  of  its  passage. 
The  act  before  me  proposes  another  gratuity  to  the  holders  of  the 
same  stock,  and  in  many  cases  to  the  same  men,  of  at  least  seven 
millions  more.  This  donation  finds  no  apology  in  any  uncertainty 
as  to  the  effect  of  the  act.  On  all  hands  it  is  conceded  that  its  passage 
will  increase  at  least  20  or  30  per  cent  more  the  market  price  of 
the  stock,  subject  to  the  payment  of  the  annuity  of  $200,000  per  year 
secured  by  the  act,  thus  adding  in  a  moment  one-fourth  to  its  par 
value.  It  is  not  our  own  citizens  only  who  are  to  receive  the  bounty 
of  our  Government.  More  than  eight  millions  of  the  stock  of  this 
bank  are  held  by  foreigners.  By  this  act  the  American  Republic 
proposes  virtually  to  make  them  a  present  of  some  millions  of 
dollars.  For  these  gratuities  to  foreigners  and  to  some  of  our  own 
opulent  citizens  the  act  secures  no  equivalent  whatever.  They  are 
the  certain  gains  of  the  present  stockholders  under  the  operation  of 
this  act,  after  making  full  allowance  for  the  payment  of  the  bonus. 

Every  monopoly  and  all  exclusive  privileges  are  granted  at  the 
expense  of  the  public,  which  ought  to  receive  a  fair  equivalent.  The 
many  millions  which  this  act  proposes  to  bestow  on  the  stockholders 
of  the  existing  bank  must  come  directly  or  indirectly  out  of  the  earn- 
ings of  the  American  people.  It  is  due  to  them,  therefore,  if  their 


498  READINGS  IN  ECONOMIC  HISTORY 

Government  sell  monopolies  and  exclusive  privileges,  that  they  should 
at  least  exact  for  them  as  much  as  they  are  worth  in  open  market. 
The  value  of  the  monopoly  in  this  case  may  be  correctly  ascertained. 
The  twenty-eight  millions  of  stock  would  probably  be  at  an  advance 
of  50  per  cent,  and  command  in  market  at  least  $42,000,000,  subject 
to  the  payment  of  the  present  bonus.  The  present  value  of  the  mo- 
nopoly, therefore,  is  $17,000,000,  and  this  the  act  proposes  to  sell  for 
three  millions,  payable  in  fifteen  annual  installments  of  $200,000  each. 

It  is  not  conceivable  how  the  present  stockholders  can  have  any 
claim  to  the  special  favor  of  the  Government.  The  present  corpora- 
tion has  enjoyed  its  monopoly  during  the  period  stipulated  in  the 
original  contract.  If  we  must  have  such  a  corporation,  why  should 
not  the  Government  sell  out  the  whole  stock  and  thus  secure  to  the 
people  the  full  market  value  of  the  privileges  granted?  Why  should 
not  Congress  create  and  sell  twenty-eight  millions  of  stock,  incorpo- 
rating the  purchasers  with  all  the  powers  and  privileges  secured  in  this 
act  and  putting  the  premium  upon  the  sales  into  the  Treasury? 

But  this  act  does  not  permit  competition  in  the  purchase  of  this 
monopoly.  It  seems  to  be  predicated  on  the  erroneous  idea  that  the 
present  stockholders  have  a  prescriptive  right  not  only  to  the  favor 
but  to  the  bounty  of  Government.  It  appears  that  more  than  a  fourth 
part  of  the  stock  is  held  by  foreigners  and  the  residue  is  held  by  a  few 
hundred  of  our  own  citizens,  chiefly  of  the  richest  class.  For  their 
benefit  does  this  act  exclude  the  whole  American  people  from  compe- 
tition in  the  purchase  of  this  monopoly  and  dispose  of  it  for  many 
millions  less  than  it  is  worth.  This  seems  the  less  excusable  because 
some  of  our  citizens  not  now  stockholders  petitioned  that  the  door  of 
competition  might  be  opened,  and  offered  to  take  a  charter  on  terms 
much  more  favorable  to  the  Government  and  country. 

But  this  proposition,  although  made  by  men  whose  aggregate 
wealth  is  believed  to  be  equal  to  all  the  private  stock  in  the  existing 
bank,  has  been  set  aside,  and  the  bounty  of  our  Government  is  pro- 
posed to  be  again  bestowed  on  the  few  who  have  been  fortunate  enough 
to  secure  the  stock  and  at  this  moment  wield  the  power  of  the  existing 
institution.  I  can  not  perceive  the  justice  or  policy  of  this  course. 
If  our  Government  must  sell  monopolies,  it  would  seem  to  be  its  duty 
to  take  nothing  less  than  their  full  value,  and  if  gratuities  must  be 
made  once  in  fifteen  or  twenty  years  let  them  not  be  bestowed  on  the 
subjects  of  a  foreign  government  nor  upon  a  designated  and  favored 
class  of  men  in  our  own  country.  It  is  but  justice  and  good  policy, 
as  far  as  the  nature  of  the  case  will  admit,  to  confine  our  favors  to  our 


CURRENCY,   BANKING,   AND   STATE  DEBTS  499 

own  fellow  citizens,  and  let  each  in  his  turn  enjoy  an  opportunity  to 
profit  by  our  bounty.  In  the  bearings  of  the  act  before  me  upon 
these  points  I  find  ample  reasons  why  it  should  not  become  a  law. 

III.   THE  PANIC  OF  1837  AND  ITS  EFFECTS 

A.   President  Van  Bur  en  on  the  Panic  of  1837  l 

Following  his  veto  of  the  Bank  Bill,  President  Jackson  had  the  government 
deposits  withdrawn  from  the  United  States  Bank,  and  placed  in  certain  selected 
state  banks,  often  referred  to  as  "pet  banks."  These  banks  naturally  inflated  their 
note  issues  and  put  out  more  currency  than  the  country  really  needed.  In  1836 
the  President  ordered  the  receivers  of  public  monies  to  receive  no  more  notes  of  the 
banks,  except  in  a  few  unimportant  instances,  in  payment  for  public  lands. 
The  result  was  a  run  on  the  banks  by  note  holders.  Many  of  the  banks  were  not 
able  to  redeem  their  notes  and  consequently  they  suspended  specie  payments. 
The  panic  of  1837  followed,  and  President  Van  Buren  discussed  it  as  follows: 

During  the  earlier  stages  of  the  revulsion  [the  panic  of  1837] 
through  which  we  have  just  passed  much  acrimonious  discussion 
arose  and  great  diversity  of  opinion  existed  as  to  its  real  causes.  This 
was  not  surprising.  The  operations  of  credit  are  so  diversified  and 
the  influences  which  affect  them  so  numerous,  and  often  so  subtle, 
that  even  impartial  and  \vell-infornied  persons  are  seldom  found  to 
agree  in  respect  to  them.  To  inherent  difficulties  were  also  added 
other  tendencies  which  were  by  no  means  favorable  to  the  discovery 
of  truth.  It  was  hardly  to  be  expected  that  those  who  disapproved 
the  policy  of  the  Government  in  relation  to  the  currency  would,  in 
the  excited  state  of  public  feeling  produced  by  the  occasion,  fail  to 
attribute  to  that  policy  any  extensive  embarrassment  in  the  monetary 
affairs  of  the  country.  The  matter  thus  became  connected  with  the 
passions  and  conflicts  of  party;  opinions  were  more  or  less  affected 
by  political  considerations,  and  differences  were  prolonged  which  might 
otherwise  have  been  determined  by  an  appeal  to  facts,  by  the  exer- 
cise of  reason,  or  by  mutual  concession.  It  is,  however,  a  cheering 
reflection  that  circumstances  of  this  nature  can  not  prevent  a  com- 
munity so  intelligent  as  ours  from  ultimately  arriving  at  correct 
conclusions.  Encouraged  by  the  firm  belief  of  this  truth,  I  proceed 
to  state  my  views,  so  far  as  may  be  necessary  to  a  clear  understanding 
of  the  remedies  I  feel  it  my  duty  to  propose  and  of  the  reasons  by 
which  I  have  been  led  to  recommend  them. 

The  history  of  trade  in  the  United  States  for  the  last  three  or 

1  Messages  and  Papers  of  the  Presidents.  Edited  by  James  D.  Richardson 
([Washington],  1895-1903),  III,  325-7. 


500  READINGS  IN  ECONOMIC  HISTORY 

four  years  affords  the  most  convincing  evidence  that  our  present 
condition  is  chiefly  to  be  attributed  to  overaction  in  all  the  depart- 
ments of  business  —  an  overaction  deriving,  perhaps,  its  first  impulses 
from  antecedent  causes,  but  stimulated  to  its  destructive  consequences 
by  excessive  issues  of  bank  paper  and  by  other  facilities  for  the  ac- 
quisition and  enlargement  of  credit.  At  the  commencement  of  the 
year  1834  the  banking  capital  of  the  United  States,  including  that 
of  the  national  bank,  then  existing,  amounted  to  about  $200,000,000, 
the  bank  notes  then  in  circulation  to  about  ninety-five  millions,  and 
the  loans  and  discounts  of  the  banks  to  three  hundred  and  twenty- 
four  millions.  Between  that  time  and  the  ist  of  January,  1836, 
being  the  latest  period  to  which  accurate  accounts  have  been  received, 
our  banking  capital  was  increased  to  more  than  two  hundred  and 
fifty-one  millions,  our  paper  circulation  to  more  than  one  hundred 
and  forty  millions,  and  the  loans  and  discounts  to  more  than  four 
hundred  and  fifty-seven  millions.  To  this  vast  increase  are  to  be 
added  the  many  millions  of  credit  acquired  by  means  of  foreign  loans, 
contracted  by  the  States  and  State  institutions,  and,  above  all,  by  the 
lavish  accommodations  extended  by  foreign  dealers  to  our  mer- 
chants. The  consequences  of  this  redundancy  of  credit  and  of  .the 
spirit  of  reckless  speculation  engendered  by  it  were  a  foreign  debt 
contracted  by  our  citizens  estimated  in  March  last  at  more  than 
$30,000,000;  the  extension  to  traders  in  the  interior  of  our  country 
of  credits  for  supplies  greatly  beyond  the  wants  of  the  people;  the 
investment  of  $39,500,000  in  unproductive  public  lands  in  the  years 
1835  and  1836,  whilst  in  the  preceding  year  the  sales  amounted  to 
only  four  and  a  half  millions;  the  creation  of  debts,  to  an  almost 
countless  amount,  for  real  estate  in  existing  or  anticipated  cities  and 
villages,  equally  unproductive,  and  at  prices  now  seen  to  have  been 
greatly  disproportionate  to  their  real  value;  the  expenditure  of  im- 
mense sums  in  improvements  which  in  many  cases  have  been  found 
to  be  ruinously  improvident;  the  diversion  to  other  pursuits  of  much 
of  the  labor  that  should  have  been  applied  to  agriculture,  thereby 
contributing  to  the  expenditure  of  large  sums  in  the  importation  of 
gi-ain  from  Europe  —  an  expenditure  which,  amounting  in  1834  to 
about  $250,000,  was  in  the  first  two  quarters  of  the  present  year 
increased  to  more  than  $2,000,000;  and  finally,  without  enumerating 
other  injurious  results,  the  rapid  growth  among  all  classes,  and  espe- 
cially in  our  great  commercial  towns,  of  luxurious  habits  founded 
too  often  on  merely  fancied  wealth,  and  detrimental  alike  to  the 
industry,  the  resources,  and  the  morals  of  our  people. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  501 

It  was  so  impossible  that  such  a  state  of  things  could  long  continue 
that  the  prospect  of  revulsion  was  present  to  the  minds  of  considerate 
men  before  it  actually  came.  None,  however,  had  correctly  anti- 
cipated its  severity.  A  concurrence  of  circumstances  inadequate  of 
themselves  to  produce  such  widespread  and  calamitous  embarrass- 
ments tended  so  greatly  to  aggravate  them  that  they  can  not  be 
overlooked  in  considering  their  history.  Among  these  may  be  men- 
tioned, as  most  prominent,  the  great  loss  of  capital  sustained  by  our 
commercial  emporium  in  the  fire  of  December,  1835 — a  loss  the 
effects  of  which  were  underrated  at  the  time  because  postponed  for 
a  season  by  the  great  facilities  of  credit  then  existing;  the  disturbing 
effects  in  our  commercial  cities  of  the  transfers  of  the  public  moneys 
required  by  the  deposit  law  of  June,  1836,  and  the  measures  adopted 
by  the  foreign  creditors  of  our  merchants  to  reduce  their  debts  and  to 
withdraw  from  the  United  States  a  large  portion  of  our  specie. 

B.   Effects  of  the  Panic  on  Banking,  1837-1839  1 

The  panic  of  1837  not  only  caused  the  banks  to  suspend  specie  payment,  but 
compelled  many  of  them  to  close  their  doors.  Two  years  later  the  panic  recurred 
in  a  mild  form  and  other  banks  were  forced  out  of  business.  Mr.  Hildreth,  the 
historian,  describes  the  situation  as  follows: 

The  New  York  banks  having  determined  to  continue  to  be  banks, 
and  not  to  convert  themselves  into  mere  machines  for  manufacturing 
paper  money  of  no  particular  value,  the  banks  of  New  England,  of 
New  Jersey,  and  of  the  whole  North-west,  have  found  themselves 
obliged,  with  more  or  less  reluctance,  and  some  of  them  after  ineffec- 
tual attempts  at  suspension,  to  continue  to  be  banks;  while  the  banks 
of  Pennsylvania,  and  of  the  South  generally,  have  taken  the  other 
course,  and,  to  borrow  a  phrase  from  Mr.  Calhoun,  have  unbanked 
themselves.  How  long  they  will  choose  to  continue  in  this  anomalous 
condition  it  is  not  easy  to  say.  Some  of  them  will  be  apt  to  have  great 
difficulty  in  getting  out  of  it. 

All  the  southern  banks,  unless  perhaps  we  ought  to  except  a  few 
in  New  Orleans  and  some  other  of  the  large  commercial  towns,  labor 
under  one  great  difficulty  for  which  it  is  not  easy  to  find  a  remedy. 
They  are  managed  mostly  by  planters,  and  they  lend  principally  to 
planters,  a  class  of  men  quite  destitute  of  those  ideas  of  mercantile 
punctuality  essential  to  the  safe  conduct  of  a  specie-paying  bank. 

1  Banks,  Banking  and  Paper  Currencies.  By  Richard  Hildreth  (Boston,  1840), 
106-8. 


502  READINGS  IN  ECONOMIC  HISTORY 

Moreover,  the  customers  of  these  banks  are  much  too  fond  of  borrow- 
ing money,  not  merely  in  anticipation  of  the  crop,  but  for  permanent 
investment  in  agricultural  operations, —  loans  which  no  bank  can 
safely  make. 

Indeed  several  of  these  institutions  bear  altogether  too  close  a 
resemblance  to  Mr.  Law's  famous  land  banks.  The  capital  of  several 
of  them  has  been  raised  in  Europe  in  this  way.  The  subscribers  to 
the  stock,  instead  of  paying  in  their  subscriptions  in  cash,  have  given 
the  bank  a  mortgage  of  land  and  slaves,  appraised  as  of  equivalent 
value.  These  mortgages  the  bank  has  assigned  to  the  State,  as 
security  for  the  ultimate  repayment  of  a  state  loan,  which  the  State 
has  been  induced  to  contract  abroad  for  the  benefit  of  the  stockholders 
in  the  bank,  who  have  entered  into  a  contract  to  keep  down  the 
interest  of  the  loan,  and  for  its  ultimate  repayment.  In  this  way  a 
cash  banking  capital  has  been  obtained;  but  as  the  stockholders,  in 
all  these  banks,  have  a  right  to  a  perpetual  loan  nearly  to  the  amount 
of  their  stock,  it  is  evident  that  the  amount  of  capital  left  to  be  em- 
ployed in  the  discount  of  mercantile  papers  must  be  very  limited,  and 
even  this  small  amount  is  pretty  certain  to  be  engrossed  by  the  dis- 
count of  accommodation  paper  for  the  stockholders.  The  truth  is, 
that  banks  are  mercantile  institutions,  adapted  to  the  wants  and 
habits  of  a  mercantile  community,  and  little  likely  to  be  well  managed, 
or  to  answer  any  good  purpose,  in  communities  destitute,  to  a  great 
extent,  of  commercial  spirit  and  feelings. 

The  number  of  banks  in  the  United  States  at  the  close  of  the  year 
1839,  including  the  non-specie-paying  banks,  exceeded  seven  hundred 
with  a  capital  of  upwards  of  three  hundred  millions  of  dollars,  being 
double  the  number  of  banks,  and  double  the  amount  of  banking  capi- 
tal, which  existed  ten  years  before. 

The  principal  occasion  of  this  great  increase  of  local  banks  was, 
the  refusal  to  recharter  the  Bank  of  the  United  States.  This  was 
especially  the  case  in  the  West  and  South,  where  the  currency  had 
been  principally  supplied  and  the  banking  business  transacted  by 
the  branches  of  the  National  Bank.  The  closing  of  those  branches 
gave  a  great  impulse  to  the  creation  of  new  banks  throughout  all  that 
portion  of  the  country. 

The  total  number  of  bank  failures  which  occurred  in  the  United 
States  in  the  half  century  which  elapsed  from  the  period  of  the  first 
institution  of  banks  in  the  country,  down  to  the  beginning  of  the 
year  1837,  the  era  of  the  second  general  suspension,  was  about  one 
hundred  and  seventy- five, —  about  one  hundred  and  twelve  of  which  oc- 


CURRENCY,   BANKING,   AND   STATE  DEBTS  503 

curred  in  the  States  south  and  west  of  Pennsylvania.  By  far  the 
larger  part  of  these  failures  happened  to  banks  which  had  been  put  in 
operation  during  the  suspension  of  specie  payments  from  1814  to 
1818,  and  which  were  set  up  without  any  substantial  capital. 

The  number  of  bank  failures  consequent  upon  the  crisis  of  1837 
is  not  yet  known.  It  amounts  perhaps  to  thirty.  The  bank  failures 
that  will  occur  in  consequence  of  the  crisis  of  1839,  an  appendix,  as 
it  were,  to  that  of  1837,  will  be  still  more  numerous. 

All  these  failures  have  originated  in  one  of  the  four  following 
causes,  which  have  produced  all  the  bank  failures  that  ever  happened. 

ist.   An  attempt  to  do  banking  business  without  a  sufficient  capital. 

2d.   Ignorance  and  incapacity  on  the  part  of  the  directors. 

3d.   Fraud  on  the  part  of  the  directors. 

4th.  A  general  depreciation  of  property,  ruinous  to  the  debtors 
of  the  banks,  by  which  the  bank  capital  has  been  swallowed  up. 

C.  Arguments  for  an  Independent  Treasury  and  "Hard  Money"  1845  l 

The  disastrous  financial  experience  of  the  government  with  the  state  banks 
during  the  panic  of  1837  revived  the  idea  of  establishing  an  independent  treasury 
which  it  was  thought  would  be  able  to  take  the  place  of  the  banks  in  handling 
government  funds.  Accordingly,  an  independent  treasury  was  established  in 
1840.  The  next  year  the  Whigs,  who  had  come  into  power  with  Harrison's  election 
to  the  presidency,  abolished  it  and  attempted  to  re-establish  a  United  States  Bank. 
In  the  latter  attempt,  however,  they  were  unsuccessful,  because  of  President 
Tyler's  opposition  to  it.  When  the  Democrats  came  into  power  in  1845,  they  set 
about  to  re-enact  the  law  of  1840,  which  they  did  in  1846.  Secretary  Walker's 
argument  for  an  independent  treasury  was  as  follows: 

The  Secretary  of  the  Treasury,  on  coming  into  office,  found  the 
revenues  deposited  with  banks.  The  law  establishing  the  Inde- 
pendent Treasury  was  repealed,  and  the  secretary  had  no  power  to 
reestablish  that  system.  Congress  had  not  only  repealed  that  law, 
but,  as  a  substitute,  had  adopted  the  present  system  of  deposite  banks, 
and  prohibited  changing  any  one  of  those  for  another  bank,  except 
for  specified  reasons.  No  alternative  was  left  but  to  continue  the 
existing  system  until  Congress  should  think  proper  to  change  it.  That 
change,  it  is  hoped,  will  now  be  made  by  a  return  to  the  treasury  of 
the  Constitution.  One  of  the  great  evils  of  banks  is  the  constant 
expansion  and  contraction  of  the  currency;  and  this  evil  is  augmented 
by  the  deposites  of  the  revenue  with  banks,  whether  State  or  national. 
The  only  proper  course  for  the  government  is  to  keep  its  own  money 

1  Treasury  Report,  1845  (Washington,  1846),  16. 


504  READINGS  IN  ECONOMIC  HISTORY 

separate  from  ail  banks  and  bankers,  in  its  own  treasury —  whether 
in  the  mint,  branch  mints,  or  other  government  agencies — and  to 
use  only  gold  and  silver  coin  in  all  receipts  and  disbursements.  The 
business  of  the  country  will  be  more  safe  when  an  adequate  supply 
of  specie  is  kept  within  our  limits,  and  its  circulation  encouraged  by 
all  the  means  within  the  power  of  the  government.  If  this  govern- 
ment, and  the  States,  and  the  people  unite  in  suppressing  the  use  of 
specie,  an  adequate  supply,  for  want  of  a  demand,  cannot  be  kept 
within  our  limits,  and  the  condition  of  the  business  and  currency 
of  the  country  will  be  perilous  and  uncertain.  It  will  be  completely 
within  the  power  of  the  banks,  whose  paper  will  constitute  the  ex- 
clusive circulation  of  the  whole  community.  Nor  will  it  be  useful 
to  establish  a  constitutional  treasury,  if  it  is  to  receive  or  disburse 
the  paper  of  banks.  Separation  from  banks  in  that  case  would  only 
be  nominal,  and  no  addition  would  be  made  to  the  circulation  of 
gold  and  silver. 

Various  forms  of  paper  credit  have  been  suggested,  as  connected 
with  the  operations  of  the  constitutional  treasury;  but  they  are  all 
considered  as  impairing  one  of  the  great  objects  of  such  a  treasury  — 
namely,  an  augmented  circulation  of  specie.  If  paper,  in  whatever 
form,  or  from  whatever  source  it  may  issue,  should  be  introduced  as  a 
circulation  by  the  constitutional  treasury,  it  would,  precisely  to  that 
extent,  diminish  its  use  as  a  means  of  circulating  gold  and  silver. 

The  constitutional  treasury  could  be  rendered  a  most  powerful 
auxiliary  of  the  mint  in  augmenting  the  specie  circulation.  The 
amount  of  public  money  which  can  be  placed  in  the  mint  is  now  lim- 
ited by  law  to  one  million  of  dollars;  and  to  that  extent  it  is  now 
used  as  a  depository,  and  as  a  means  of  increasing  our  coinage. 
It  is  suggested  that  this  limitation  may  be  so  modified  as  to 
permit  the  use  of  our  mint  and  branch  mints  for  a  much  larger 
sum,  in  connection  with  the  constitutional  treasury.  The  amount 
of  public  money  received  at  New  York  greatly  exceeds  that 
collected  at  all  other  points,  and  would  of  itself  seem  to  call 
for  a  place  of  public  deposite  there;  in  view  of  which,  the  loca- 
tion of  a  branch  of  the  mint  of  the  United  States  at  that 
city  would  be  most  convenient  and  useful.  The  argument  used 
against  a  constitutional  treasury,  of  the  alleged  insecurity  of  the 
public  funds  in  the  hands  of  individuals,  and  especially  the  vast 
amount  collected  at  New  York,  will  be  entirely  obviated  by  such 
an  establishment.  The  mint  of  the  United  States  has  now  been  in 
existence  52  years.  It  has  had  the  custody  of  upwards  of  114,000,000 


CURRENCY,  BANKING,  AND   STATE  DEBTS  505 

dollars,  and  during  this  long  period  of  time  there  never  has 
been  a  loss  of  any  of  its  specie  in  the  mint  by  the  government.  The 
mint  at  Philadelphia  is  now  conducted  with  great  efficiency,  by  the 
able  and  faithful  officer  at  the  head  of  that  establishment,whose 
general  supervisory  authority,  without  leaving  the  parent  mint,  might 
still  be  wisely  extended  to  the  branch  at  New  York.  Besides  the 
utility  of  such  a  branch  as  a  place  for  keeping  safely  and  disbursing 
the  public  money,  it  is  believed  that  the  coinage  might  be  greatly 
augmented  by  the  existence  of  a  branch  of  the  mint  at  that  great  city. 
It  is  there  that  two  thirds  of  the  revenue  is  annually  collected —  the 
whole  of  which,  under  the  operation  of  the  constitutional  treasury, 
would  be  received  in  specie.  Of  that  amount,  a  very  large  sum 
would  be  received  in  coin  of  other  countries,  and  especially  in  foreign 
gold  coins —  all  which  could  be  speedily  converted,  upon  the  spot, 
into  our  own  coins  of  gold  and  silver.  The  amount  also  of  such  for- 
eign coin  brought  by  emigrants  to  the  city  of  New  York  is  very  con- 
siderable; a  large  portion  of  which  would  find  its  way  to  the  branch 
of  the  mint  for  re-coinage.  The  foreign  gold  coins  do  not,  and  it 
is  feared  will  not,  circulate  generally  as  a  currency,  notwithstanding 
they  are  made  a  tender  by  law.  The  rate  at  which  these  coins  are 
fixed  by  law  is  not  familiar  to  the  people;  the  denomination  of  such 
coin  is  inconvenient;  the  parts  into  which  it  is  divided  are  not  decimal; 
the  rates  at  which  it  is  taken  vary  in  different  parts  of  the  Union.  It 
is  inconvenient  in  the  way  of  ready  transfer  in  counting;  it  is  more 
difficult,  hi  common  use,  to  distinguish  the  genuine  from  the  counter- 
feit foreign  coin;  and  the  stamp  upon  it  is  not  familiar  to  the  people — 
from  all  which  causes,  a  foreign  gold  coin  does  not,  and  will  not,  cir- 
culate generally  as  a  currency  among  the  people.  In  many  of  the 
banks,  nearly  the  whole  of  their  specie  is  kept  in  every  variety  of 
foreign  gold  coin;  and  when  it  is  tendered  by  them  in  payment  of 
their  notes,  the  great  body  of  the  people,  not  being  familiar  with  these 
coins,  do  not  receive  them;  and  thus  the  circulation  of  a  gold  cur- 
rency is,  to  a  great  extent,  defeated.  If  these  coins  were  converted 
at  our  mint,  or  branch  mints,  into  the  eagle,  the  half-eagle,  the  quarter- 
eagle,  we  should  speedily  have  a  large  supply  of  American  gold  coin, 
and  it  would  very  soon  be  brought  into  common  use  as  a  currency, 
and  thus  give  to  it  greater  stability,  and  greater  security  to  all  the 
business  of  the  country.  A  considerable  amount  of  foreign  gold  coin 
has,  during  the  present  year,  under  the  directions  of  this  department, 
been  converted  into  American  gold  coin;  but  the  process  would  be 
much  more  rapid  if  aided  by  the  organization  of  the  constitutional 


5o6  READINGS  IN  ECONOMIC  HISTORY 

treasury,  and  the  establishment  of  a  branch  of  the  mint  at  the  great 
commercial  emporium  of  the  Union.  With  the  mint  and  branch 
mints  as  depositories,  the  sum  remaining  in  the  hands  of  other  receiv- 
ers of  public  money,  whether  of  lands  or  customs,  would  be  incon- 
siderable, and  the  government  could  be  readily  protected  from  all 
losses  of  such  sums  by  adequate  bonds,  and  the  power  by  law  to  con- 
vict and  punish  as  criminals  all  who  embezzle  the  public  moneys. 

It  is  believed,  under  such  a  system,  that  no  defaults  would  take 
place,  and  that  the  public  moneys  would  be  safely  kept  and  dis- 
bursed in  gold  and  silver.  This  government  is  made,  by  the  consti- 
tution, the  guardian  of  a  specie  currency.  That  currency  can  only 
be  coined,  and  its  value  regulated,  by  this  government.  It  is  one  of 
its  first  duties  to  supply  such  a  currency,  by  an  efficient  mint,  and  by 
general  regulations  of  the  coinage;  but  in  vain  will  it  attempt  to  per- 
form that  duty,  if,  when  coin  is  made  or  regulated  in  value,  this 
government  dispenses  with  its  use,  and  expels  it  from  circulation, 
or  drives  it  out  of  the  country,  by  substituting  the  paper  of  banks 
in  all  the  transactions  of  the  government. 

There  is  nothing  which  will  advance  so  surely  the  prosperity  of 
the  country  as  an  adequate  supply  of  specie,  diffused  throughout 
every  portion  of  the  Union,  and  constituting,  to  a  great  extent,  the 
ordinary  circulation  everywhere  among  the  people.  It  is  a  currency 
that  will  never  break  nor  fail;  it  will  neither  expand  nor  contract 
beyond  the  legitimate  business  of  the  country;  it  will  lead  to  no 
extravagant  speculations  at  one  time,  to  be  followed  by  certain  de- 
pression at  another;  nor  will  labor  ever  be  robbed  of  its  reward  by 
the  depreciation  of  such  currency.  There  is  no  danger  that  we  shall 
have  too  much  gold  and  silver  in  actual  circulation,  or  too  small  an 
amount  of  bank  paper,  or  that  any  injury  ever  will  be  inflicted  upon 
the  business  of  the  country,  by  a  diminution  of  the  circulation  of  the 
paper  of  banks,  and  the  substitution  in  its  place,  to  that  extent,  of 
gold  and  silver.  Even  their  most  ardent  advocates  must  admit  that 
banks  are  subject  to  periodical  expansions  and  contractions,  and  that 
this  evil  would  be  increased  by  giving  them  the  funds  of  the  govern- 
ment to  loan,  and  by  receiving  and  disbursing  nothing  but  their  paper. 

It  is  believed  that  the  permanent  interest  of  every  class  of  the 
people  will  be  advanced  by  the  establishment  of  the  constitutional 
treasury,  and  that  the  manufacturers  especially  will  derive  great 
benefit  from  its  adoption.  It  will  give  stability  to  all  their  operations, 
and  insure  them,  to  a  great  extent,  against  those  fluctuations,  expan- 
sions, and  contractions  of  the  currency  so  prejudicial  to  their  interests. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  507 

By  guarding  against  inflations  of  the  currency,  it  will  have  a  tendency 
to  check  periodical  excesses  of  foreign  importations  purchased  in  fact 
upon  credit;  while  loans  from  banks,  or  dangerous  enlargements  of 
then"  business,  and  excessive  issues  of  their  paper,  will  be  greatly 
diminished.  . 


IV.   SYSTEMS  OF  BANKING  IN  THE  UNITED  STATES  BEFORE   1860 

A.   Early  State  Banking  in  the  West,  1821-1831 1 

In  some  of  the  states,  particularly  in  the  west,  banking  was  a  state  monopoly. 
Many  of  these  enterprises  failed,  and  the  one  projected  by  Illinois  is  typical  of  its 
class. 

To  remedy  these  evils  [lack  of  money ~]  the  legislature  of  1821 
created  a  State  Bank.  It  was  founded  without  money,  and  wholly 
on  the  credit  of  the  State.  It  was  authorized  to  issue  one,  two,  three, 
five,  ten,  and  twenty  dollar  notes,  in  the  likeness  of  bank  bills,  bearing 
two  per  cent,  annual  interest,  and  payable  by  the  State  in  ten  years. 
A  principal  bank  was  established  at  Vandalia,  and  four  or  five  branches 
in  other  places;  the  legislature  elected  all  the  directors  and  officers; 
a  large  number  of  whom  were  members  of  the  legislature,  and  all  of 
them  professional  politicians.  The  bank  was  directed  by  law  to  lend 
its  bills  to  the  people,  to  the  amount  of  one  hundred  dollars,  on 
personal  security;  and  upon  the  security  of  mortgages  upon  land  for 
a  greater  sum.  These  bills  were  to  be  receivable  in  payment  of  all 
State  and  county  taxes,  and  for  all  costs  and  fees,  and  salaries  of  pub- 
lic officers;  and  if  a  creditor  refused  to  endorse  on  his  execution  his 
willingness  to  receive  them  in  payment  of  debt,  the  debtor  could 
replevy  or  stay  its  collection  for  three  years,  by  giving  personal 
security.  So  infatuated  were  this  legislature  with  this  absurd  bank 
project,  that  the  members  firmly  believed  that  the  notes  of  this  bank 
would  remain  at  par  with  gold  and  silver;  and  they  could  readily 
prove  their  belief  to  be  well-founded;  for  the  most  difficult  argument 
to  answer  is  one  founded  partly  upon  fact,  but  mostly  upon  guess 
work  and  conjecture.  .  .  . 

In  the  summer  of  1821,  the  new  bank  went  into  operation.  Every 
man  who  could  get  an  endorser  borrowed  his  hundred  dollars.  The 
directors,  it  is  believed,  were  all  politicians;  and  either  were  then, 
or  expected  to  be,  candidates  for  office.  Lending  to  everybody,  and 
refusing  none,  was  the  surest  road  to  popularity.  Accordingly,  three 

1  History  of  Illinois.     By  Thomas  Ford  (Chicago,  1854),  45-7. 


508  READINGS  IN  ECONOMIC  HISTORY 

hundred  thousand  dollars  of  the  new  money  was  soon  lent  without 
much  attention  to  security  or  care  for  eventual  payment.  It  first 
fell  twenty-five  cents,  then  fifty,  and  then  seventy  cents  below  par. 
And  as  the  bills  of  the  Ohio  and  Kentucky  banks  had  driven  all  other 
money  out  of  the  State,  so  this  new  issue  effectually  kept  it  out.  Such 
a  total  absence  was  there  of  the  silver  coins,  that  it  became  utterly 
impossible,  in  the  course  of  trade,  to  make  small  change.  The  people, 
from  necessity,  were  compelled  to  cut  the  new  bills  into  two  pieces, 
so  as  to  make  two  halves  of  a  dollar.  This  again  further  aided  to 
keep  out  even  the  smallest  silver  coins,  for  the  people  must  know 
that  good  money  is  a  very  proud  thing,  and  will  not  circulate,  stay, 
or  go  where  bad  money  is  treated  with  as  much  respect  as  the  good. 
For  about  four  years  there  was  no  other  kind  of  money  but  this  un- 
current  State  bank  paper.  In  the  meantime,  very  few  persons  pre- 
tended to  pay  their  debts  to  the  bank.  More  than  half  of  those  who 
had  borrowed,  considered  what  they  had  gotten  from  it  as  so  much 
clear  gain,  and  never  intended  to  pay  it  from  the  first. 

B.  Banking  in  New  York  and  Massachusetts,  1813-1860  1 

During  the  period  before  the  Civil  War  several  systems  of  banking  developed 
in  the  United  States.  Three  of  these  systems  deserve  notice.  They  are  as 
follows: 

[The  Suffolk  Bank  System] 

Two  measures  combined  to  raise  the  value  of  bank-notes:  one 
was  forcing  the  banks  to  redeem  on  presentation  at  their  own  counter, 
and  the  other  was  the  initiation  of  a  system  by  which  other  banks 
co-operated  to  secure  such  redemption.  In  the  present  day,  when 
government-notes  and  national-bank  notes  are  current  everywhere 
at  par,  it  is  hard  to  realize  how  quickly  a  note  depreciated  at  any 
distance  from  the  bank  which  issued  it.  This  was  especially  the  case 
with  notes  from  the  banks  of  other  States.  There  were  no  facilities 
for  the  holder  visiting  the  bank  to  demand  payment,  and  there  was  a 
doubt  whether  he  would  get  the  money  if  he  did  so  visit  it.  In  1813 
a  movement  toward  a  reform  in  the  bank-currency  began.  Bills  of 
banks  in  other  States  were  then  at  a  discount  in  Boston  from  three 
to  five  per  cent,  and  the  notes  of  Boston  banks  had  nearly  disappeared. 
The  New-England  Bank,  organized  in  that  year  with  a  capital  of 
$1,000,000,  instituted  the  system  of  sending  foreign  bills  for  redemp- 

1  Industrial  History  of  the  United  States.  By  Albert  S.  Bolles  (Norwich, 
Conn.,  1879),  797-8,  802. 


CURRENCY,  BANKING,  AND   STATE  DEBTS  509 

tion  to  the  banks  which  issued  them,  and  charging  the  bill-holders 
only  the  actual  expense  of  transmitting  the  notes  and  returning  the 
proceeds.  This  was  the  beginning  of  the  system  of  redemption 
afterward  known  as  the  Suffolk-Bank  system.  This  system  was  more 
fully  developed  at  a  later  period  (1825),  when  five  of  the  Boston  banks 
—  the  Suffolk,  Eagle,  Manufacturers'  and  Mechanics'  (now  the 
Tremont),  the  Globe,  and  State  —  undertook  its  management.  For 
a  long  time  the  system  was  bitterly  opposed  by  those  banks  interested 
in  preventing  a  return  of  their  circulation;  but  it  was  eventually 
successful.  Its  exclusive  management  was  finally  assumed  by  the 
Suffolk  Bank;  which  bank  compelled  the  redemption  at  par  in  Boston 
of  the  notes  of  the  New-England  banks  by  a  system  of  assorting  and 
returning  the  notes  to  the  place  of  issue,  and  its  operations  were 
continued  down  to  the  establishment  of  the  national-bank  system. 
The  amount  of  New-England  bank-notes  redeemed  at  the  Suffolk 
Bank  from  1841  to  1857  was  as  follows,  in  millions  of  dollars: — 

Date.  Millions. 

1841 109 

1842 105 

1844 1 26 

1845 J37 

1846 141 

1847 165 

1848 .  178 

1849 .199 

1850 220 

I8SI •  243 

1852 245 

l853 .  288 

1854 ...  231 

1855.... 341 

1856 397 

1857 376 

[Safety-fund  System] 

From  1791,  when  the  Bank  of  New  York  was  incorporated,  until 
the  declaration  of  war  with  Great  Britain  in  1812,  nineteen  banks 
were  chartered,  with  an  aggregate  capital  of  $18,215,0x30.  Ten  of 
them  still  exist,  and  are  institutions  of  high  rank.  Between  1812 
and  1829  twenty-four  more  were  chartered,  with  a  capital  of  $25,105,- 
ooo,  of  which  $13,770,000  was  for  banks  in  New- York  City. 

As  yet  there  has  been  no  legislation  looking  to  the  security  of  bank 
circulation,  so  little  had  the  science  of  banking  developed.  But  in 


510  READINGS  IN  ECONOMIC  HISTORY 

1829,  when  the  charters  of  some  forty  banks  were  about  to  expire, 
Gov.  Van  Buren  recommended  the  passage  of  a  law,  which  was  enacted 
in  April  of  that  year,  providing  a  system  of  insurance  of  bank-notes 
based  upon  a  custom  prevalent  among  Chinese  merchants.  The 
law  provided  that  all  new  or  rechartered  banks  should  pay  an  annual 
tax  of  one-half  of  one  per  cent  on  their  capital  stock  until  three  per 
cent  had  been  paid  in,  and  the  fund  should  be  used  by  the  State 
treasurer  to  redeem  the  notes  and  pay  the  debts  of  insolvent  banks. 
If  the  fund  became  impaired  at  any  time,  new  contributions  were  to 
be  made  to  bring  it  up  to  a  normal  size.  The  law  allowed  the  issue  of 
notes  to  twice  the  amount  of  the  capital,  and  loans  to  two  and  a  half 
times  the  amount  of  capital.  This  safety-fund  law  did  not  accomplish 
its  purpose.  In  1841-42  eleven  banks  failed,  whose  capital  was 
$3,150,000:  their  liabilities,  which  the  State  had  to  meet,  amounted  to 
$2,558,933.  These  eleven  banks  had  contributed  but  $86,274  to  the 
safety  fund;  and  even  down  to  Sept.  30,  1848,  all  of  the  safety-fund 
banks  had  contributed  but  $1,876,063.  The  State  issued  six-per-cent 
stock  to  make  up  the  deficiency,  and  was  partly  reimbursed  by  new 
contributions  from  the  banks.  The  law  was  amended,  however,  in 
1842,  so  that  the  safety -fund  became  a  security  for  circulating- notes 
only,  and  no  other  debts. 

The  law  of  1829  also  provided  that  there  should  be  three  com- 
missioners to  examine  the  banks,  and  report  annually  to  the  legis- 
lature on  the  condition  of  those  institutions.  The  law  provided  that 
one  commissioner  should  be  appointed  by  the  Governor  and  Senate, 
one  by  the  banks  of  the  southern  part  of  the  State,  and  one  by  the 
remaining  banks.  But  in  1837  the  Governor  and  Senate  were  author- 
ized to  select  them  all;  and,  this  power  being  abused  for  political 
ends,  the  work  of  examination  was  in  1843  taken  from  the  commis- 
sioners, whose  office  was  abolished,  and  given  to  the  comptroller. 
In  1851  the  present  office  of  bank  superintendent  was  created 
instead.  .  .  . 

[Free  Banking  System] 

The  free  banking  system  of  New  York  was  authorized  in  1838. 
Its  two  great  features  were,  that  it  opened  the  privileges  of  banking, 
on  certain  conditions,  to  all  persons  alike;  and  it  provided  much  better 
security  for  the  redemption  of  notes  than  had  yet  been  provided. 
The  system  of  deposits  with  the  comptroller  for  security  was  the  one 
on  which  the  national  banks  of  a  later  date  were  based.  It  was 
originally  that  all  banking  associations,  on  depositing  stock  of  the 


CURRENCY,  BANKING,  AND   STATE  DEBTS  511 

State  of  New  York  or  of  the  United  States,  or  any  State  stock  which 
should  be,  or  be  made,  equal  to  a  five-per-cent  stock,  or  bonds  and 
mortgages  on  improved  and  productive  real  estate,  worth,  exclusive 
of  the  buildings  thereon,  double  the  amount  secured  by  the  mortgage, 
and  bearing  interest  at  not  less  than  six  per  cent  per  annum,  should 
receive  from  the  comptroller  of  the  State  an  equal  amount  of  circu- 
lating-notes. Previous  to  the  year  1843  twenty-nine  of  these  banks, 
with  an  aggregate  circulation  of  $1,233,374,  had  failed;  and  their 
securities,  consisting  of  stocks  and  bonds  and  mortgages  amounting 
to  $1,555,338,  were  sold  for  $953,371,  entailing  a  loss  of  $601,966. 
The  avails  of  the  securities  were  sufficient  to  pay  but  seventy-four 
per  cent  of  the  circulation  alone.  The  losses  to  the  bill-holders 
occurred  only  in  the  case  of  those  banks  which  had  deposited  State 
stocks  other  than  those  of  New  York.  The  law  was  thereupon  so 
amended  as  to  exclude  all  stocks,  except  those  issued  by  the  State  of 
New  York,  and  to  require  those  to  be  made  equal  to  a  five-per-cent 
stock.  An  amendment  in  1848  required  that  the  stocks  deposited 
should  bear  six  per  cent  interest  instead  of  five;  and  that  the  bonds 
and  mortgages  should  bear  interest  at  seven  per  cent,  and  should  be 
on  productive  property,  and  for  an  amount  not  exceeding  two-fifths 
of  the  value  of  the  land  covered  by  them.  Subsequently,  on  April 
10,  1849,  the  law  was  again  so  amended  as  to  require  that  at  least 
one-half  of  the  securities  so  deposited  should  consist  of  New- York- 
State  stocks,  and  that  not  more  than  one-half  should  be  in  the  stocks 
of  the  United  States;  the  securities  in  all  cases  to  be,  or  to  be  made, 
equal  to  a  stock  producing  an  interest  of  six  per  cent  per  annum, 
and  to  be  taken  at  a  rate  not  above  their  par  value,  and  at  not  more 
than  their  market-value. 

Two  other  interesting  features  of  the  later  State-bank  legislation 
in  New  York  were  the  requirement  that  the  banks  redeem  their  notes 
at  some  agency  in  New  York,  Albany,  or  Troy,  and  that  stockholders 
should  be  individually  liable  for  the  obligations  of  the  bank  to  the 
extent  of  their  shares.  The  latter  provision  was  incorporated  into 
the  Constitution  of  1846.  The  former  was  a  law  of  1840,  which 
allowed  a  discount  of  one-half  of  one  per  cent  on  redemption:  in  1851 
the  discount  was  reduced  to  one-fourth  of  one  per  cent.  The  New- 
York-City  banks,  however,  soon  inaugurated  the  Suffolk-Bank 
system  already  described,  and  divided  the  discount  between  them- 
selves and  the  redemption  agency.  Such  banks  as  did  not  provide 
for  redemption  were  forced  to  close  up. 


512 


READINGS  IN  ECONOMIC  HISTORY 


C.   Conditions  of  Banking  in  1860  x 

During  the  decade  1850-1860  the  banks  of  the  country  multiplied  in  number 
and  enjoyed  increased  prosperity.  Trade  and  commerce,  both  domestic  and 
foreign,  flourished,  and  the  general  prosperity  of  the  time  was  reflected  by  the  sound 
condition  of  banking.  A  partial  report  of  conditions  in  1860  is  as  follows: 

Among  the  evidences  of  prosperity  and  general  accumulation  of 
wealth  in  the  United  States,  the  multiplication  of  banks  with  increased 
aggregate  capital  is  one  of  the  most  significant.  When,  as  in  this 
country  has  been  generally  the  case,  individual  promises  representing 
produce  and  merchandize,  and  made  available  through  the  instru- 
mentality of  banks,  are  almost  the  sole  means  by  which  commodities 
pass  from  the  producers  to  the  consumers,  the  increased  action  of  the 
banks  becomes  the  index  of  larger  production  and  more  active  trade. 
Where  crops  and  the  products  of  manufacturing  industry  are  more 
abundant,  the  aggregate  amount  of  paper  created  by  their  interchange 
is  larger,  and  the  negotiations  of  this  paper  require  greater  banking 
facilities.  This  want  usually  manifests  itself  in  a  more  lucrative 
banking  business,  which  draws  more  capital  into  that  employment. 
Such  a  state  of  affairs  presented  itself  during  the  decade  which  closed 
with  1860.  The  bank  movement  in  the  United  States  during  that 
period  underwent  great  expansion  without  becoming  less  sound. 
In  that  respect  it  presented  a  strong  contrast  to  the  expansion  that 
occurred  in  the  decade  which  ended  with  1840.  In  that  period  a 
season  of  speculation  in  bank  stocks  and  wild  lands  manifested  itself, 
and  the  paper  created  for  bank  negotiation  represented  imaginary  or 
speculative  values  rather  than  commodities  produced.  Those  values 
were  never  realized,  and  the  whole  paper  system  based  on  them  col- 
lapsed. If  we  compare  the  aggregate  features  of  the  banks  at  each 
decade  with  .  .  .  the  sum  of  the  imports  and  exports  for  corre- 
sponding dates,  the  results  are  as  follows: 


No. 

Imports 

Years 

of 

Capital 

Loans 

Specie 

Circulation 

and 

banks 

exports 

1830 

330 

$145,192,268 

$200,451,214 

$22,114,917 

$  61,323,898 

$144,726,428 

1840 

901 

358,442,692 

462,896,523 

33,i°5>i55 

106,968,572 

239,227,465 

1843 

691 

228,861,948 

254,544,937 

33,505,806 

58,563,608 

149,090,279 

1850 

872 

227,469,074 

412,607,653 

48,677,138 

155.012,911 

330,037,038 

1860 

1,562 

421,880,095 

691,945,580 

83,594,537 

207,102,477 

762,288,550 

Preliminary  Report  on  the  Eighth  Census,  1860  (Washington,  1862),  75-8. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  513 

The  year  1843  was  that  of  the  lowest  depression  after  the  extensive 
liquidation  that  following  the  expansions  of  i837-'39.  In  that  year 
the  bank  credits  were,  however,  large,  as  measured  by  the  foreign 
trade  or  the  sum  of  the  imports  and  exports,  but  an  internal  trade 
had  been  developed  through  the  settlements  of  the  western  country 
which  required  more  credits.  The  operation  of  the  general  bankrupt 
law  aided  in  clearing  away  the  wreck  of  over  two  hundred  banks 
that  had  failed,  and  which  failures  involved  that  of  several  sovereign 
States  that  had  loaned  their  credits  for  bank  capital. 

The  elements  of  prosperity  were  now  again  active,  and  banking 
facilities  were  required  to  a  greater  extent.  The  severe  losses  the 
public  had  suffered  made  some  more  comprehensive  guarantee  neces- 
sary to  a  full  restoration  of  confidence  in  bank  paper.  In  New  York, 
in  1838,  a  new  principle  had  been  adopted  —  that  of  requiring  the 
banks  to  deposit  security  for  their  circulating  notes  and  holding 
stockholders  liable  to  an  amount  equal  to  the  value  of  their  shares. 
On  this  basis  the  banking  of  New  York  was  thenceforth  to  operate; 
and  the  principle,  as  its  value  became  recognized,  was  gradually 
adopted  in  other  States. 

The  failure  of  the  Irish  harvests  of  i846-'4y,  followed  by  those 
of  England  in  1 848-^9  by  creating  a  great  demand  for  American 
breadstuff s,  stimulated  business  and  gave  a  new  impulse  to  banking. 
The  year  1850  showed  an  amount  of  foreign  trade  more  than  double 
that  of  1843.  With  the  increase  of  business  the  banks  were  very 
prosperous,  as  is  manifest  in  the  fact,  that  although  the  capital  of  the 
banks  was  no  more  in  that  year  than  in  1843,  their  discounts  were 
one  hundred  and  fifty  millions,  or  60  per  cent,  greater.  Thus  the 
decade  opened  with  a  very  lucrative  banking  business,  and  amid 
the  greatest  excitement  in  relation  to  the  gold  discoveries  of  Cali- 
fornia. The  spirit  of  enterprise  abroad  was  very  strong,  and  the 
impression  that  prices  were  to  rise  by  reason  of  the  depreciation  of 
gold  was  prevalent;  hence  the  general  desire  to  operate,  in  order  to 
avail  of  the  anticipated  profits.  Industry  of  all  descriptions  was  very 
active  and  productive,  and  there  never  was  a  period  when  the  national 
capital  accumulated  so  fast,  a  remarkable  evidence  of  which  was 
afforded  in  the  vast  amount  expended  in  the  construction  of  railroads; 
while,  of  the  large  capital  accumulated,  a  considerable  portion  was 
employed  in  banking.  The  incorporated  bank  capital  increased  nearly 
two  hundred  millions,  and  the  private  bank  capital  half  as  much. 
The  report  of  the  Treasury  Department  gave  the  latter  amount  at 
$118,036,080.  .  .  . 


READINGS  IN  ECONOMIC  HISTORY 


The  increase  of  bank  capital  was  large  in  the  Atlantic  cities,  par- 
ticularly in  Boston  and  New  York,  of  which  the  number  and  capital 
were  respectively  as  follows: 


1850 

1860 

] 

ncrease 

No. 

Capital 

No. 

Capital 

No. 

Capital 

Boston 

-2Q 

$21,760,000 

4.2 

$36,581,700 

12 

$14  821  700 

New  York  

3i 

33,600,602 

55 

69,758,777 

24 

36,158,175 

Total  of  two  cities  . 

61 

55,360,602 

97 

106,340,477 

36 

50,979,875 

This  increase  of  banks,  following  the  general  expansion  of  business, 
brought  with  it  the  necessity  of  some  improved  means  of  adjusting 
the  daily  mutual  balances.  The  fifty-five  banks  in  New  York  city, 
for  example,  were  each  compelled  to  settle  as  many  accounts  daily. 
To  obviate  that  great  labor  the  clearing  system  was  devised.  Each 
bank  sends  every  morning  to  the  clearing-house  all  the  checks  and 
demands  it  may  have  received  the  day  previous,  in  the  course  of 
business,  upon  all  others.  These  in  a  short  time  are  interchanged, 
and  a  balance  struck  and  paid.  This  system  was  established  in 
1853,  and  the  amount  of  the  exchanges  and  balances  annually  were 
as  follows: 


Year 

Amount  exchanged 

Balances 

18^4. 

$?,7:;o,4i;<;,Q87.o6 

$207,4.11,4.03 

iSsz 

5,362,912,098.33 

28O,6O4,I  37 

i8<;6 

6,906,213,328.47 

334,714,480 

l8S7.    .                                                                

8,333,226,718.06 

36";,  31  3,Qoi 

iSsS.  . 

4,756,664,386.09 

314,238,010 

iStJQ.  . 

6,448,005,956.01 

363,984,682 

i860            .                                         

7,23I,I43,O[;6.6Q 

308,603,438 

1861  

5,915,742,758.05 

353,383.944 

Total  for  eight  years   

50,704,364,288.76 

2,  627,434.,  007 

With  the  development  of  business  the  transactions  grew  immensely 
up  to  1858,  when  they  fell  off  nearly  one-half  under  the  panic  of  that 
year.  They  recovered  gradually  up  to  the  breaking  out  of  the  rebel- 
lion. The  banks  of  Boston  and  Philadelphia  adopted  the  same  sys- 


CURRENCY,   BANKING,   AND   STATE  DEBTS 


515 


tern  with  similar  results.  The  figures  indicate  to  what  an  extent 
the  credits  of  individuals,  created  in  the  operations  of  business,  are 
cancelled  through  the  intervention  of  the  banks  of  the  cities  where 
the  commerce  of  the  whole  country  centralizes. 

In  the  States  of  Illinois,  Mississippi,  Arkansas  and  Florida,  after 
the  collapse  of  1837,  no  banks  were  again  created  up  to  1850,  and  the 
three  last  named  are  still  without  them,  with  the  exception  of  two 
small  ones  in  Florida.  Texas  has  a  small  bank  at  Galveston,  and 
Utah,  Oregon,  and  New  Mexico  have  none.  In  the  District  of 
Columbia  four  old  banks  expired  by  limitation  of  charter  in  the 
hands  of  trustees,  and  Congress  refused  to  recharter  them;  but  they 
continue  to  transact  business. 

It  is  probable  that  a  large  portion  of  the  increase  in  banking, 
particularly  at  the  west,  has  been  due  to  the  introduction  of  the 
security  system  of  New  York,  the  idea  of  which  seemed  to  popularize 
that  which  had  previously  been  in  bad  odor.  The  following  table 
shows  the  States  which  have  adopted  the  free  banking  principle  in 
whole  or  in  part: 


States 

Year 

1  86 

o 

adopted 

Stocks  held 

Circulation 

New  York  

1838 

$26  897  874 

$2O  QZO  ^06 

Michigan  

1849 

102,831 

222,107 

New  Jersey  

1850 

062,011 

4,811,832 

Virginia  

1851 

3,^84,078 

9,8l2,I97 

Illinois  .                 

1851 

0,826,601 

8,98l,72* 

Ohio  

1851 

2,I"C?,i;s2 

7,981,889 

Indiana  

1852 

1,349,466 

5,390,246 

Wisconsin  

1854 

5,031,504 

4,429,855 

Missouri  

1856 

725,670 

7,884,885 

Tennessee  

1852 

1,233,432 

5,538,378 

Louisiana  

1853 

5,842,096 

11,579,313 

Iowa  

1858 

101,849 

568,806 

Minnesota  

1858 

50,000 

5O,OOO 

Massachusetts  

1859 

Total  .  .      .               

57,951,954 

97,212,827 

516  READINGS  IN  ECONOMIC  HISTORY 

V.   CURRENCY  AND  COINAGE 

A.  Currencies  and  their  Movements,  1852  1 

The  movement  of  coin  and  bank  notes  during  the  period  1836-1849  indicates 
several  important  monetary  laws  as  follows:  (i)  seasonal  demands  for  money; 
(2)  tendency  of  a  cheaper  money  to  drive  a  dearer  money  out  of  circulation;  and  (3) 
settlement  of  balances  of  trade. 

Our  foreign  commerce  has  not  only  affected  the  specie  in  our 
country,  but  it  has  had  a  general  influence  also  upon  the  circulation 
of  our  banks.  Prior  to  the  acquisition  of  California  in  1848,  the 
production  of  gold  and  silver  annually  by  our  mines,  was  but  little 
over  half  a  million  of  dollars.  About  $2,000,000  more  than  the 
products  of  our  mines  were  needed  annually  to  satisfy  the  pride  of 
the  people,  and  supply  them  with  utensils  and  ornaments;  and  to 
keep  pace  with  the  increase  of  our  population,  requires  an  increase 
of  coin  of  $2,500,000  annually;  so  that  we  needed  about  $5,000,000 
annually  to  supply  the  wants  of  the  country,  and  have  a  sufficient 
specie  basis  to  sustain  our  banks,  and  maintain  the  credit  of  our  paper 
currency.  The  amount  of  specie  in  the  United  States  is  so  exceedingly 
small,  in  proportion  to  the  population  and  commercial  wants  of  the 
country,  that  large  importations  of  foreign  goods,  and  an  exportation 
of  specie  to  the  amount  of  $4,000,000  or  $5,000,000  a  year,  for  two  or 
three  years  in  succession,  will  inevitably  weaken  the  banks  very  much, 
produce  a  panic,  and  a  run  upon  many  of  them,  and  cause  many 
failures,  if  not  a  general  suspension  of  specie  payments.  This  is  veri- 
fied by  the  commercial  revulsion  from  1837  to  1842.  In  May,  1837, 
nearly  all  the  banks  in  the  United  States  suspended  specie  payments; 
during  the  year  ending  September  3oth,  1838,  our  imports  amounted 
to  but  $108,486,616,  including  $17,747,116  specie,  and  but  little  over 
$90,000,000  in  merchandise  and  foreign  products;  our  exports  the  same 
year  amounted  to  $113,717,404,  including  but  $3,508,046  in  specie  — 
that  is  we  exported  exclusive  of  specie,  over  $110,000,000  in  amount, 
and  imported  but  little  over  $90,000,000;  paid  off  several  millions  of 
debts,  and  got  a  balance  of  over  $14,000,000  specie  to  sustain  our 
banks.  This  enabled  nearly  all  the  banks  in  the  old  States,  and  many 
in  the  new  ones,  to  resume  specie  payments  during  the  spring  and 
summer  of  the  year  1838,  and  to  go  on  for  some  time  prosperously; 
but  the  free-trade  compromise  act  again  invited  large  importations 
of  foreign  goods,  amounting,  during  the  year  ending  September  3Oth, 

1  Essays  on  the  Progress  of  Nations.  By  Ezra  C.  Seaman  (New  York,  1852), 
262-4. 


CURRENCY,   BANKING,   AND   STATE  DEBTS  517 

1839,  to  $162,092,132,  including  only  $5,595,176  in  specie;  while  our 
exports  were  but  $112,251,673,  exclusive  of  specie  to  the  amount  of 
$8,776,743;  showing  a  nominal  balance  of  trade  against  us  that 
year  of  about  $44,000,000;  a  drain  of  over  $3,000,000  of  specie  from 
the  country,  and  a  large  increase  of  our  foreign  debt. 

This  large  balance  of  trade  against  us  and  drain  of  specie,  occa- 
sioned a  second  suspension  of  specie  payments  on  the  gth  of  October, 
1839,  by  Mr.  Biddle's  United  States  Bank  of  Pennsylvania,  which 
was  soon  after  followed  by  nearly  all  the  banks  south  and  west  of  the 
State  of  New  York.  No  other  country  ever  felt  so  quickly  and 
sensibly,  and  suffered  so  severely,  the  disastrous  effects  of  excessive 
importations  of  foreign  goods,  and  an  unfavorable  balance  of  trade; 
for  no  other  country  ever  had  so  small  an  amount  of  specie  in  propor- 
tion to  the  extent  of  their  commerce;  and  in  no  other  country  was  the 
credit  system  ever  carried  to  so  great  an  extent,  upon  a  foundation 
so  slight  and  frail. 

The  amount  of  specie  in  the  United  States,  October  ist,  1839, 
being  about  $73,000,000,  and  October  ist,  1842,  but  $62,000,000, 
in  round  numbers;  the  quantity  in  the  banks  $45,000,000,  in  1839, 
and  but  $33,545,000,  December,  1842,  averaging  about  $39,000,000, 
left  in  circulation,  including  what  was  hoarded  up  and  withdrawn 
from  use,  from  $28,000,000  to  $29,000,000. 

When  specie  is  exported  it  is  withdrawn  entirely  from  the  vaults 
of  the  banks  in  the  commercial  cities,  and  they  draw  the  specie  from 
the  banks  of  the  country  and  the  interior  cities,  and  the  amount  in 
circulation  is  scarcely  affected  at  all  Export  two  years  in  succession 
to  pay  for  foreign  goods,  $5,000,000  each  year  more  specie  than  is 
imported,  accompanied  by  a  great  increase  of  debt  by  means  of  heavy 
importations,  these  $10,000,000  being  withdrawn  from  the  banks, 
reduces  their  specie  to  about  $30,000,000,  and  this,  of  itself,  will  often 
produce  a  panic  and  a  run  upon  the  banks,  and  cause  a  draw  upon 
them  of  $5,000,000  or  $10,000,000  more,  and  thereby  occasion  a  failure 
of  many  of  them,  and  perhaps  a  general  suspension  of  specie  payments. 
The  suspension  of  October,  1839,  was  occasioned  by  the  exportation 
of  specie,  and  the  heavy  importations  of  goods  the  previous  year, 
though  the  balance  of  specie  exported  was  but  little  over  $3,000,000; 
and  the  suspension  of  May,  1837,  was  in  consequence  of  the  immense 
importation  of  foreign  goods;  the  rapid  accumulation  of  a  heavy 
foreign  debt,  and  the  anticipation  of  large  exportations  of  specie  to 
pay  it;  the  great  expansion  of  the  banks,  and  their  heavy  loans  to 
speculators  who  could  not  pay.  All  these  things  contributed  to  create 


READINGS  IN  ECONOMIC  HISTORY 


a  panic,  and  induce  a  withdrawal  of  deposits,  and  a  run  upon  the  banks, 
and  soon  led  to  a  general  suspension  of  specie  payments  in  self  defence, 
and  before  the  anticipated  exportation  of  specie  to  pay  our  foreign 
debt  has  commenced.  .  .  . 

Statement  of  the  amount  of  bank-notes  issued  to  each  inhabitant, 
and  the  estimated  amount  of  coin  and  bank-notes  in  circulation, 
in  each  of  the  following  divisions  of  the  United  States,  at  the  date  of 
their  reports  nearest  to  the  last  day  of  December  of  each  of  the  under- 
mentioned years. 


1836 

1842 

1842 

1845 

1845 

1849 

< 

3oin  an 

d 

Bknts. 

Bknts. 

Bknts. 

Bknts. 

Bknts. 

Bknts. 

Maine,  N.  Hamp.  &  Vt  

$  5  4 

$    2f 

$  4 

$  4 

$   e| 

$    <; 

Mass.,  Rhode  Is.,  &  Conn  

is! 

of 

ii 

18 

ioi 

16 

N.  York,  N.  Jersey,  &  Pa  

12 

4i 

5l 

6f 

s? 

7 

Ohio  &  other  Northwestern  States, 
including  Iowa  

si 

I* 

si 

2 

si 

at 

Del.,  Md.,  Dist.  of  Col.,  Va.  &  N.  Car.. 
Kv.,  Tenn.,  &  Mo  

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Slave  States  South  of  35°  of  latitude.. 
United  States  

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For  some  months,  annually,  after  harvest,  including  the  fall  and 
forepart  of  the  winter,  the  bank-notes  of  the  commercial  and  manu- 
facturing States  are  sent  into  the  agricultural  States  to  pay  for  agri- 
cultural products;  and  during  that  portion  of  the  year,  the  circulating 
money  of  the  agricultural  States  is  greater  than  is  indicated  in  the 
above  table;  but  the  merchants  soon  collect  the  greater  portion  of 
it  and  send  it  to  the  commercial  cities  to  pay  for  goods;  so  that  during 
half  or  more  of  the  year,  it  is  much  less,  and  perhaps  did  not  average 
more  than  is  above  stated,  during  the  years  referred  to. 

Bank  paper  being  a  cheaper  currency  than  coin,  its  natural  ten- 
dency is  to  displace  coin,  and  induce  its  exportation  and  consumption 
in  the  arts.  The  balance  of  trade  being  generally  in  favor  of  manu- 
facturing and  commercial,  and  against  agricultural  States,  the  ten- 
dencies of  trade  are  to  drain  the  latter  of  their  coin,  and  to  transfer 
it  to  the  former.  The  products  of  manufacturing  labor,  when  sold  in 
the  markets  of  the  commercial  world,  amount  to  about  twice  as  much 
as  those  of  agricultural  labor  employed  in  either  cold  or  temperate 


CURRENCY,   BANKING,   AND   STATE  DEBTS  519 

climates;  but  not  so  when  the  latter  is  employed  in  the  culture  of  cot- 
ton, sugar,  coffee,  and  other  tropical  products,  in  a  soil  and  climate 
adapted  to  them.  Labor  employed  in  mining  and  manufacturing  in 
Great  Britain,  or  in  the  United  States,  is  more  than  twice  as  produc- 
tive as  agricultural  labor  can  be  made  in  Ohio  and  the  North-western 
States.  In  fact,  the  average  income  of  the  people  of  the  manufacturing 
States  of  Massachusetts  and  Rhode  Island,  and  of  Great  Britain,  is 
more  than  twice  as  great  as  that  of  the  agricultural  State  of  Ohio, 
and  nearly  twice  as  great  as  that  of  the  agricultural  State  of  Vermont. 

A  majority  of  mankind  are  inclined  to  spend  all  they  can  earn, 
and  all  they  can  get  credit  for,  and  as  the  wants  of  agricultural 
communities  are  generally  greater  than  their  incomes,  they  often 
buy  more  than  they  can  pay  for  with  their  crops  within  the  year;  and 
hence  agricultural  countries  are  usually  involved  in  debt;  the  balance 
of  trade  is  almost  universally  against  them;  and  this  drains  them  of 
the  precious  metals,  and  tends  to  depress  their  industry  and  the  price 
of  their  products  still  more.  Poverty,  and  nothing  but  poverty,  a 
want  of  ability  to  pay  promptly,  and  a  loss  or  diminution  of  credit, 
tends  to  check  importations,  and  to  restore  the  balance  of  trade,  by 
lessening  the  demand  for,  and  the  price  of  goods,  and  the  inducement 
to  import  them. 

As  long  as  the  balance  of  trade  is  against  a  country,  it  must  either 
export  its  specie  to  pay  such  balance,  or  buy  on  credit,  accumulate 
a  debt,  and  eventually  be  drained  of  its  specie  to  pay  interest,  as  well 
as  the  principal  of  the  debt.  Bank-notes  may,  for  a  time,  supply 
the  place  of  coin,  and  thus  afford  a  temporary  remedy;  but,  in  the 
end,  they  aggravate  the  evil.  By  inflating  the  currency  in  some 
instances,  and  in  others  keeping  it  full,  they  keep  up,  and  often  raise 
the  price  of  both  domestic  and  foreign  products,  and  thereby  tend 
to  prevent  the  exportation  of  domestic  products;  to  encourage  im- 
portations; to  increase  both  the  quantity  and  value  of  goods  imported, 
and  exports  of  specie  to  pay  for  them;  and  to  diminish  the  industry 
of  the  country  by  depriving  its  own  citizens  of  the  benefit  of  its  markets 
for  their  products.  The  necessary  consequence  is,  a  run  upon  the 
banks  for  coin,  a  great  diminution  in  their  circulation,  many  failures 
of  banks,  and  numerous  bankruptcies  among  the  people,  attended 
with  a  depression  of  property  and  industry,  and  wide-spread  embar- 
rassment throughout  the  country.  Such  a  revulsion  necessarily 
checks  importations  for  a  time,  and  as  exportation  goes  on  as  Usual, 
the  balance  of  trade  is  eventually  turned  in  its  favor;  specie  again 
flows  in,  and  the  country  partially  recovers  from  its  embarrassment. 


520  READINGS  IN  ECONOMIC  HISTORY 

B.   Early  Coinage,  1791-1840  1 

The  first  coinage  act  of  the  United  States,  which  was  passed  in  1792,  provided 
for  the  coinage  of  gold,  silver  and  copper  coins.  The  important  provisions  of  this 
act  and  those  which  followed  during  the  next  forty  years  were  as  follows: 

On  the  2d  April,  1792,  a  code  of  laws  was  enacted  for  the 
establishment  and  regulation  of  the  mint,  under  which,  with  slight 
amendments,  the  coinage  was  executed  for  forty-two  years. 

The  denominations  of  coin,  with  their  rates,  were  as  follows:  — 

Gold.  The  eagle  of  ten  dollars,  to  weigh  270  grains,  the  half  and 
quarter  in  proportion;  all  of  the  fineness  of  22  carats,  or  917 
thousandths. 

Silver.  The  dollar  of  100  cents,  to  weigh  416  grains;  the  half, 
quarter,  tenth  or  dime,  and  twentieth  or  half -dime,  in  proportion; 
the  fineness  to  be  1485  parts  in  1664,  or  892.4  thousandths. 

Copper.   The  cent,  to  weigh  264  grains;  the  half-cent  in  proportion. 

Since  the  act  of  1792,  the  following  alterations  in  the  standards 
have  been  made:  — 

On  the  i4th  January,  1793,  the  weight  of  the  cent  was  reduced  to 
208  grains;  the  half-cent  in  proportion. 

January  26th,  1796.  President  Washington  issued  a  proclamation 
(as  he  had  been  empowered  to  do  by  law,)  that,  "on  account  of  the 
increased  price  of  copper,  and  the  expense  of  coinage,"  the  cent  would 
be  reduced  to  7  dwts.  or  168  grains,  and  the  half -cent  in  proportion. 
The  copper  coins  have  since  remained  at  this  standard. 

June  28th,  1834.  An  act  was  passed,  changing  the  weight  and 
fineness  of  the  gold  coins,  and  the  relative  value  of  gold  to  silver. 
Before  stating  the  alterations,  it  may  be  proper  to  observe,  that  the 
estimate  of  gold  as  being  worth  fifteen  times  as  much  as  silver,  which 
was  the  original  basis,  was  found  too  low  at  the  market  value;  which, 
although  always  fluctuating,  was  nearer  sixteen  to  one,  upon  a  general 
average.  The  effect  of  our  legal  proportions  was  to  reduce  the  coin- 
age of  gold,  and  to  restrain  its  circulation;  being  always  at  a  premium, 
the  coin  was  immediately  exported  to  Europe,  in  the  course  of  trade, 
and  there  quickly  wrought  into  other  shapes. 

To  provide  a  remedy  for  this  evil,  engaged  the  attention  of  some 
of  our  most  eminent  statesmen  for  a  series  of  fifteen  years.  At  length, 
in  June,  1834,  the  weight  of  the  eagle  was  reduced  by  law  to  258  grains, 
(the  parts  in  proportion,)  of  which  232  grains  must  be  fine  gold,  mak- 
ing the  fineness  21  carats  2  \^  car.  grains,  or  899^^0  thousandths. 

1  Hunt's  Merchants'  Magazine  (New  York,  1844),  X,  244-6. 


CURRENCY,  BANKING,  AND  STATE  DEBTS 


521 


This  was  an  increase  of  6  YoVo  per  cent  on  the  former  value  of  gold. 
The  silver  coinage  was  not  changed. 

The  disadvantages  of  the  complex  standards  of  fineness,  both  in 
gold  and  silver,  which  were  difficult  to  be  expressed  or  remembered, 
and  very  inconvenient  in  regard  to  the  frequent  calculations  which 
were  based  upon  them,  early  determined  the  present  director  to 
endeavor  to  effect  an  improvement.  The  standard  of  nine-tenths 
fine,  as  adopted  in  France  and  some  other  countries,  was  obviously 
the  most  simple,  and,  upon  every  consideration,  the  most  suitable. 
To  bring  our  silver  coins  to  that  porportion,  without  changing  the 
amount  of  fine  silver  in  them,  it  was  only  necessary  to  put 
less  copper,  by  3^  grains,  in  the  dollar,  reducing  its  weight  to 
41 2  \  grains.  The  weight  of  the  gold  was  not  to  be  changed, 
but  the  fineness  increased  about  three-fourths  of  one  thousandth, 
a  difference  far  within  the  scope  of  the  legal  allowance,  and  of 
course  hardly  appreciable.  These  proportions  were  incorporated 
in  a  carefully  digested  and  consolidated  code  of  Mint  Laws, 
which  was  enacted  by  Congress,  in  January,  1837.  By  that  act, 
the  eagle  is  to  be  900  thousandths  fine,  and  to  weigh  258  grains;  the 
half  and  quarter  in  proportion ;  and  the  [silver]  dollar,  at  the  same  fine- 
ness, to  weigh  412^  grains;  the  parts  in  proportion.  The  allowed 
deviation  in  fineness,  for  gold,  is  from  898  to  902;  for  silver,  897  to  903. 

The  following  is  a  recapitulation  of  the  various  standards,  of  the 
gold  and  silver  coins:  — 


Gold  Eagle 

Silver  Dollar 

Weight, 
Grains 

Fineness, 
Thous. 

Weight, 
Grains 

Fineness, 
Thous. 

Act  of  April  2, 
Act  of  June  28, 
Act  of  January 

I7Q2 

270 
258 
258 

916.7 
899.2 
900 

416 

412.5 

892.4 
900 

1834.  . 

18,  1837  

It  will  be  proper,  in  concluding  this  article,  to  explain  briefly  the 
organization  of  the  mint  of  the  United  States.  Until  the  year  1835, 
there  was  but  one  institution,  which  was  located  at  Philadelphia. 
In  that  year  three  branches  of  the  mint  were  created  by  act  of  Congress. 
Two  of  these  were  for  the  coinage  of  gold  only,  and  were  to  be  situated 
at  the  towns  of  Charlotte,  in  North  Carolina,  and  Dahlonega,  in 
Georgia  —  central  points  of  the  gold  mining  region.  The  third 
branch  was  for  both  gold  and  silver,  and  located  at  New  Orleans, 


522  READINGS  IN  ECONOMIC  HISTORY 

the  commercial  emporium  of  the  southwest.  These  three  institu- 
tions, which,  in  the  view  of  the  law  are  not  distinct  mints,  but  rather 
branches  of  the  mint,  are  respectively  managed  by  superintendents, 
who  are  under  the  control  of  the  director  of  the  parent  mint.  The 
branches  went  into  operation  in  the  year  1838.  Their  coinage  is 
uniform  with  that  of  the  establishment  at  Philadelphia,  being  sys- 
tematically tested  there  for  approval. 

The  whole  mint  establishment,  thus  constituted,  is  itself  a  bureau 
or  branch  of  the  treasury  department  of  the  general  government, 
and  is  under  the  supervision  of  the  secretary  of  the  treasury. 

The  coinage  at  the  principal  mint  in  1843  amounted  to  $6,530- 
043  20;  comprising  $4,062,010  in  gold,  $2,443,750  in  silver,  and 
$24,283  20  in  copper  coins,  and  composed  of  10,405,233  pieces. 
The  deposites  of  gold,  within  the  year,  amounted  to  $4,107,807,  and 
those  of  silver  to  $2,357,830. 

At  the  New  Orleans  branch  mint,  the  coinage  amounted  to 
$4,568,000;  comprising  $3,177,000  in  gold,  and  $1,391,000  in  silver 
coins,  and  composed  of  4,030,239  pieces.  The  deposites  for  coinage 
amounted  to  $3,138,990  in  gold,  and  $1,384,320  in  silver. 

The  branch  mint  at  Dahlonega  received,  during  the  year,  deposites 
of  gold  to  the  value  of  $570,080,  and  its  coinage  amounted  to  $582,- 
782  50;  composed  of  98,452  half -eagles,  and  36,209  quarter-eagles. 

The  branch  mint  at  Charlotte  received  deposites  of  gold  to  the 
value  of  $272,064,  and  its  coinage  amounted  to  $287,005;  composed 
of  44,353  half-eagles,  and  26,096  quarter-eagles.  .  .  . 

The  whole  coinage  in  the  United  States,  during  the  past  year, 
amounts  to  within  a  small  fraction  of  $12,000,000,  and  exceeds,  by 
more  than  one-half,  that  of  any  former  year.  Of  this  coinage,  more 
than  $8,000,000  is  in  gold;  showing  a  greater  proportion  to  silver 
than  has  heretofore  been  presented. 

The  branch  mints  at  Charlotte  and  Dahlonega  have  each  coined 
nearly  double  the  amount  which  they  have  reached  in  any  former 
year,  and  the  New  Orleans  mint  nearly  quadruple. 

VI.   STATE  DEBTS 

Amount  and  Character  in  1852  l 

The  attempts  of  the  states  to  build  internal  improvements  very  generally 
failed,  and  as  a  consequence  they  found  themselves  burdened  with  heavy  debts. 
In  1852  the  debts  and  resources  of  the  different  states  were  as  follows: 

1  Report  of  the  Commissioner  of  Patents  for  the  Year  1852  Agriculture.  (Wash- 
ington, 1853),  418-19. 


CURRENCY,   BANKING,   AND    STATE   DEBTS 


523 


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CHAPTER  XVI 
POPULATION  AND  LABOR,  1820-1860 

I.   CONDITION  or  THE  AMERICAN  LABORER 

A.   Prosperity  of  the  American  Laborer,  1836  l 

Travelers  in  the  United  States  before  the  Civil  War  often  remarked  about  the 
prosperous  condition  of  the  American  laborer.  There  was  no  great  wealth  in  the 
hands  of  individuals;  and  there  was  little  poverty.  There  was  plenty  of  food  and 
clothing  for  all  and  those  necessities  were  very  evenly  distributed.  Conditions 
that  obtained  in  Europe  among  the  working  classes  were  almost  unknown  in  the 
United  States,  where  laborers  were  scarce  and  wages  relatively  high.  An  English 
traveler,  the  Honorable  Charles  Augustus  Murray,  gave  his  impressions  of  the 
situation  as  follows: 

In  examining  the  structure  of  society  in  any  country,  it  would 
seem  natural  to  commence  with  that  class  which  forms  its  basement 
or  foundation.  If  such  be  the  proper  course  in  examining  the  con- 
dition of  other  countries,  more  especially  must  it  be  so  in  America, 
where  the  operative  or  labouring  class  is  possessed  of  privileges  and 
power  so  great  as  to  render  it,  in  fact,  master  both  of  the  government 
and  of  the  constitution.  I  am  well  aware  that  the  phrase  "labouring 
class"  is  distasteful  in  the  United  States  to  those  to  whom  it  is  ap- 
plied; but  that  is  of  little  consequence,  so  long  as  the  reader  under- 
stands that  I  use  it  in  reference  to  all  labourers  and  artisans,  and  to 
those  in  general  who  earn  their  daily  bread  by  the  sweat  of  their  brow. 
It  is  this  class,  this  broad  basis  of  society,  which  strikes  the  traveller 
in  America  with  the  greatest  surprise  and  admiration,  and  of  which 
the  native  American  may  be  justly  proud.  Pauperism,  that  gaunt 
and  hideous  spectre,  wrhich  has  extended  its  desolating  march  over 
Asia  and  Europe,  destroying  its  victims  by  thousands,  even  in  the 
midst  of  luxury  and  wrealth,  has  never  yet  carried  its  ravages  into  the 
United  States:  this  is  a  blessing  of  which  it  is  to  be  feared  that  few 
appreciate  the  magnitude,  and  which  is,  of  itself,  a  preponderating 
\veight  in  the  balance  of  national  happiness. 

1  Travels  in  North  America.  By  Charles  Augustus  Murray  (London,  1839), 
II,  297-8. 


POPULATION   AND  LABOR 


525 


Among  the  thousands  and  tens  of  thousands  whom  the  tide  of 
emigration  annually  pours  into  the  Atlantic  seaports,  and  many  of 
whom  arrive  without  money  or  friends,  or  health,  or  skill  wherewith 
to  procure  subsistence,  great  numbers  suffer  the  extremities  of  hard- 
ship and  want,  especially  in  the  neighbourhood  of  the  towns  where 
they  are  set  ashore;  but  these  cases  can  have  no  reference  whatever 
to  the  internal  condition  of  the  United  States;  and  it  is  a  fact  no  less 
surprising  than  pleasing  to  record,  that,  during  two  years  spent  in 
traveling  through  every  part  of  the  Union,  I  have  only  once  been 
asked  for  alms,  and  that  once  was  by  a  female  who  was  very  unwell, 
and  who,  although  decently  dressed,  told  me  that  she  wanted  a  bit 
of  money  to  buy  some  food. 

B.    Unfavorable  View  of  American  Labor,  1843  l 

There  were  those,  however,  who  took  a  pessimistic  view  of  American  laboring 
conditions,  due  in  some  cases  to  a  preconceived  determination  to  see  only  the 
worst  side,  and  in  other  cases  to  disappointments,  caused  by  not  finding  conditions 
as  favorable  as  they  expected  them  to  be. 

[January  20]  ...  It  is  much  easier  to  obtain  employment,  at 
present,  in  the  United  States  than  in  England;  but  in  this  respect 
they  are  getting  into  a  worse  and  worse  condition.  The  manu- 
facturers, in  the  East,  have  introduced  all  our  improvements  in  ma- 
chinery, (and  the  effects  are  the  same  as  in  this  country)  they  are 
making  very  large  quantities  of  goods;  competition  is  increasing, 
prices  are  very  much  reduced,  and  the  wages  of  labour,  generally, 
throughout  the  States  and  Canada,  have  been  reduced  from  thirty 
to  fifty  per  cent  within  the  last  four  years,  and  wages  are  still  reduc- 
ing in  some  parts  of  the  country,  in  spite  of  their  trades'  unions  and 
democratic  institutions;  and,  if  competition  continue,  no  parties 
can  prevent  wages  from  falling  as  low  there  as  they  are  in  England, 
and  this  within  a  comparatively  short  period.  Wages  in  America 
are  not  much  higher,  even  now,  than  they  are  with  us.  Agricultural 
labourers  can  be  hired,  in  Illinois  and  other  states,  for  from  eight  to 
twelve  dollars  per  month.  Smiths  and  mechanics  for  from  twelve 
to  eighteen  dollars  per  month,  with  board.  The  boarding  of  labourers 
of  all  kinds  is  almost  universal  in  the  small  towns  and  villages  in  the 
agricultural  districts.  They  think  nothing  of  board  and  lodging  in 
the  west;  it  can  be  found  them  well  for  from  $i  to  $1.50  or  4  s.  to  6  s. 

1  Documentary  History  of  American  Industrial  Society.  Edited  by  John  R. 
Commons  and  others  (Cleveland,  1910),  VII,  47-51.  Printed  by  permission  of 
the  pub  Ushers,  The  Arthur  H.  Clark  Company. 


526  READINGS  IN  ECONOMIC  HISTORY 

per  week.  At  Baltimore  iron  works  the  labourers  earn  about  2  s.  8  d 
per  day,  and  the  head  men,  at  the  furnaces,  get  about  $i,  or  45.  per 
day.  In  Pittsburg  the  wages  of  the  labourers,  at  the  iron  works,  is 
about  the  same.  A  few  of  the  principal  workmen,  at  the  iron  works, 
earn  as  much  as  $2  per  day.  At  the  founderies  and  engineering 
establishments,  at  Paterson,  near  New  York,  the  average  wages  of 
labour  throughout  the  works  is  only  about  43.  6  d.  per  day  now;  and 
this  may  be  taken  as  a  fair  average  of  the  wages  of  engineers  [machin- 
ists] and  founders,  in  the  eastern  cities;  great  numbers  were  out  of 
employ  when  I  landed,  in  May  last;  but  the  trade  is  much  better, 
and  very  few  are  out  of  work  now.  In  the  great  lead  district  of 
Galena  there  are  about  40  smelt  works,  and  first-rate  smelters  earn 
253.  per  week;  second-rate  smelters,  i8s.  per  week;  labourers  at  the 
smelt  works,  i6s.  per  week,  and  carters,  155.  per  week,  all  without 
board;  but  wages  are  paid  in  Galena  with  cash,  not  in  truck,  as  in 
most  places.  The  miners  were  getting  5  s.  8  d.  per  112  Ibs.  for  their 
lead  ore,  'and  pig  lead  was  selling  at  95.  6d.  per  cwt.,  112  Ibs.  The 
wages  of  labour  was  double  what  it  is  now,  in  Galena,  in  1838.  Great 
quantities  of  sale  shoes  and  boots  are  made  in  and  about  Salem,  in 
Massachusetts;  the  workmen  can  earn  only  about  i6s.  per  week; 
and  the  shoes  are  sold  as  cheap  as  sale  shoes  are  sold  in  England. 
Tailors  generally  get  good  wages,  but  they  are  not  usually  well  em- 
ployed; their  wages  are  about  6  s.  per  day.  Bricklayers,  stonemasons, 
and  plasterers  earn  as  much  as  tailors.  This  will  give  some  idea  of 
the  rate  of  wages. 

The  price  of  fuel,  and  the  rents  of  houses  for  labourers  are  very 
high  in  all  the  eastern  states;  food  is  also  much  higher  there  than  in 
the  west.  It  is  highest  at  Boston  and  New  York,  but  even  there, 
food  is  from  25  to  50  per  cent  cheaper  than  in  Liverpool.  Rents  are 
high  in  all  parts  of  the  Union,  and  clothing  is  higher  than  it  is  with 
us.  Wood  fuel  can  be  had  for  merely  the  expense  of  cutting  and 
preparing  in  most  parts  of  the  \vest.  On  the  banks  of  the  Ohio  and 
Mississippi  the  steam-boats  are  supplied  at  from  45.  to  6s.  per  cord 
of  8  feet  by  4  feet,  and  4  feet  high,  and  coals  can  be  had  at  Pittsburg, 
and  on  the  Ohio,  for  less  than  5  s.  per  ton.  Pork,  beef,  and  mutton 
are  bought  in  Indiana,  Illinois,  and  other  western  states,  at  from 
id.  to  i^ d.  per  Ib.  Our  friend  C.  F.  Green,  killed  a  cow  in  New  Har- 
mony while  we  were  there,  and  he  could  scarcely  sell  it  at  that  price, 
on  credit.  A  whole  carcass  of  good  mutton  sells  there  for  a  dollar, 
eggs  are  sold  at  2  d.  per  dozen,  good  fowls  at  4  s.  per  dozen,  butter  at 
3d.  to  4d.  per  Ib.,  Indian  corn  yd.  to  lod.  per  bushel,  wheat  at  $.50 


POPULATION  AND  LABOR  527 

to  $.60  or  as.  to  2  s.  6  d.  per  bushel.  Most  of  these  articles  are  more 
than  double  these  prices  in  the  eastern  states,  owing  to  their  not 
growing  enough  for  themselves,  and  the  expense  of  carriage  from  the 
far  west.  Apples,  pears,  peaches,  &c.,  are  very  plentiful  and  very 
cheap  in  the  west.  We  saw  whole  orchards  of  fine  apples  in  Indiana 
and  Kentucky  rotting  on  the  trees,  not  being  considered  worth  the 
expense  of  gathering.  The  same  evil  exists  in  the  western  states  of 
America,  as  respects  agricultural  produce,  as  we  find  in  England  as 
to  manufactured  goods;  excessive  competition,  and  consequent  re- 
ductions in  wages,  have  driven  so  many  from  the  eastern  states,  to 
cultivate  land  in  the  west,  added  to  the  shoals  of  emigrants  daily 
arriving  from  other  countries,  that  the  produce  is  so  abundant,  it 
can  scarcely  be  sold  for  the  expense  of  taking  it  fifty  miles  to  a  market, 
and  prices  will  still  go  lower  and  lower  as  more  and  more  land  is 
brought  into  cultivation,  till  the  man  who  cultivates  his  own  land 
will  not  be  able  to  get  a  living,  as  is  now  the  case  with  our  friend  C.  F. 
Green,  with  a  most  beautiful  and  fertile  farm  of  140  acres  freehold. 
One  of  the  greatest  evils  the  working  classes  have  to  contend  with 
in  the  United  States  and  in  Canada,  for  it  is  generally  practised  in 
both  countries,  is  the  abominable  cheating  truck  system,  which  is 
carried  on  with  more  barefaced  impudence  there,  and  to  a  greater 
extent  than  it  ever  was  practised  in  this  country.  The  following 
is  a  verbatim  copy  of  a  printed  notice  given  by  Ben.  Cozzens,  a  large 
manufacturer,  who  has  two  large  cotton  factories  and  a  print  work, 
and  employs  from  a  thousand  to  fifteen  hundred  pair  of  hands,  at 
Crompton  mills  in  Rhode  Island.  Single  men  at  board,  who  cannot 
take  goods,  have  ten  per  cent  deducted  from  their  wages  in  lieu  of  it. 

NOTICE.  Those  employed  at  these  mills  and  works  will  take  notice,  that  a 
store  is  kept  for  their  accommodation,  where  they  can  purchase  the  best  of  goods 
at  fair  prices,  and  it  is  expected  that  all  will  draw  their  goods  from  said  store. 
Those  who  do  not  are  informed,  that  there  are  plenty  of  others  who  would  be  glad 
to  take  their  places  at  less  wages. 

BENJ.  COZZENS. 
CROMPTON  MILLS,  February,  1843. 

One  of  the  printed  notices,  from  which  this  was  copied,  was  put 
into  my  hands  by  a  man  who  lately  worked  for  Benjamin  Cozzens, 
and  who  has  returned  home,  tired  of  America,  in  the  Roscius.  Five 
colliers  returned  home  by  the  same  vessel,  who  had  been  working 
at  Pittsville,  in  Pennsylvania,  where  the  same  vile  truck  system  is 
carried  on  to  the  greatest  extent.  They  declared  that  when  their 
American  wages  were  turned  into  cash,  they  could  earn  as  much,  and 


528  READINGS  IN  ECONOMIC  HISTORY 

were  as  well  off,  in  their  own  country.  I  know  the  general  prevalence 
of  this  system,  by  information  from  masters  as  well  as  men.  The 
average  of  loss  to  the  workmen  by  this  system  is  not  less  than  twenty- 
five  per  cent  of  their  wages,  and  in  many  cases  it  is  attended  with  a 
loss  of  fifty  per  cent.  When  masters  have  no  shops  of  their  own,  they 
give  notes  to  the  men  to  get  their  goods  at  other  shops,  who  supply 
them  with  inferior  articles  at  high  prices,  and  out  of  the  money  the 
workmen  are  cheated  of,  they  allow  a  per  centage  to  the  master. 
In  many  places  the  shopkeepers  will  not  give  flour  and  groceries  for 
these  notes;  they  tell  them  these  are  cash  articles  only,  in  which  case 
the  men  are  compelled  to  take  other  goods  which  they  do  not  want, 
and  then  have  to  submit  to  a  still  greater  loss  in  disposing  of  them 
for  cash  to  get  absolute  necessaries.  At  Shreeve's  iron  and  nail  works, 
in  Cincinnati,  and  at  other  cut  nail  works,  the  workmen  are  paid  in 
casks  of  cut  nails,  charged  at  high  prices,  by  which  they  lose  at  least 
twenty-five  per  cent  in  all  they  receive.  When  I  told  the  masters 
that  we  have  severe  laws  against  this  infamous  practice;  they  replied, 
"Here  we  do  as  we  like;  ours  is  a  free  country."  Yes,  America  is 
as  free  for  working  men  as  England,  for  in  both  countries,  when  trade 
is  bad,  the  workmen  must  labour  on  such  terms  as  are  offered,  or  go 
without  employment  and  starve.  The  condition  of  the  working 
classes  in  America,  however,  is  much  better  at  present  than  it  is  here; 
but  my  conviction,  from  all  I  have  seen  and  heard  in  America,  is, 
that  the  wages  of  labour  are  everywhere  falling,  and  that  the  condi- 
tion of  the  labourer  is  gradually  becoming  worse. 


II.  IMPROVEMENTS  IN  MANUFACTURES 

Labor-saving  Machinery  and  the  Demand  for  Labor,  1832  l 

The  introduction  of  labor-saving  machinery  has  often  been  opposed  by  the 
laborers  whom  it  has  displaced.  Such  opposition  in  the  United  States  was  never 
as  great  as  it  was  in  England,  yet  it  was  present,  though  neutralized  by  the  scarcity 
of  labor  and  the  abundance  of  public  land.  In  the  long  run,  however,  those  dis- 
placed by  machinery  tend  the  machines  or  seek  employment  in  new  fields. 

The  objection  usually  urged  against  improvements  in  machinery, 
is,  that  the  poor  are  deprived  of  employment.  It  is  true,  that  at  the 
introduction  of  an  invention  which  produces  the  same  quantity  with 
less  labour  than  was  before  required,  some  of  the  labourers  are  thrown 
out  of  employment  —  but  this  though  a  serious  evil  is  a  transient  one, 

1  American  Quarterly  Review  (Philadelphia,  1832),  No.  XXIV,  312. 


POPULATION  AND  LABOR  529 

and  not  for  a  moment  to  be  weighed  against  the  permanent  advan- 
tages which  result  from  the  improvement  to  the  community  generally, 
and  particularly  to  the  labourers  themselves.  The  commodity  is  not 
only  furnished  to  them  in  common  with  others  at  a  cheaper  rate, 
but  the  lasting  effect  of  every  improvement  in  machinery  is,  increased 
employment.  This  can  be  proved  by  innumerable  facts  —  and  is  a 
conclusion  which  might  be  arrived  at  by  a  priori  reasoning.  It  has 
been  shown  that  by  the  cost  of  production  being  diminished  the 
price  is  diminished;  the  price  being  diminished,  the  demand  is  in- 
creased; if  the  demand  is  increased,  in  order  to  supply  that  demand, 
a  proportionably  greater  quantity  of  the  commodity  must  be  pro- 
duced, and  to  produce  this  augmented  supply,  a  greater  number  of 
labourers  is  required.  It  has  generally  been  found  in  practice  that 
the  increased  demand  consequent  upon  diminished  price  has  been 
so  great,  that  many  more  labourers  were  required  to  supply  it  even 
with  the  improved  machines,  than  were  required  to  supply  the  old 
demand  with  the  old  machines,  although  they  required  more  labourers 
to  work  them. 

III.  THE  FACTORY  SYSTEM 

A.   Conditions  at  Waltham  and  Lynn,  1835 1 

One  of  the  first  important  centers  of  the  factory  system  was  Lowell,  Massa- 
chusetts. Conditions  there  were  good,  and  apparently  typical  of  the  conditions 
to  be  found  in  the  other  manufacturing  centers  of  textile  goods.  They  have  been 
described  from  several  angles  by  different  observers.  Other  factory  centers  in 
Massachusetts  were  Waltham  and  Lynn.  The  latter  place  was  at  an  early  date 
—  and  has  continued  to  be  down  to  the  present  time  —  an  important  center  for  the 
manufacture  of  shoes.  Miss  Martineau  visited  these  places  during  the  thirties 
and  afterward  recorded  her  impressions  as  follows: 

I  visited  the  corporate  factory-establishment  at  Waltham,  within 
a  few  miles  of  Boston.  The  Waltham  Mills  were  at  work  before  those 
of  Lowell  were  set  up.  The  establishment  is  for  the  spinning  and 
weaving  of  cotton  alone,  and  the  construction  of  the  requisite 
machinery.  Five  hundred  persons  were  employed  at  the  time  of 
my  visit.  The  girls  earn  two,  and  some  three,  dollars  a-week,  besides 
their  board.  The  little  children  earn  one  dollar  a-week.  Most  of 
the  girls  live  in  the  houses  provided  by  the  corporation,  which 
accommodate  from  six  to  eight  each.  When  sisters  come  to  the 
mill,  it  is  a  common  practice  for  them  to  bring  their  mother  to  keep 


1  Society  in  America.     By  Harriet  Martineau  (London,  1837),  II,  247-50. 


530  READINGS  IN  ECONOMIC  HISTORY 

house  for  them  and  some  of  their  companions,  in  a  dwelling  built  by 
their  own  earnings.  In  this  case,  they  save  enough  out  of  their 
board  to  clothe  themselves,  and  have  their  two  or  three  dollars  a- week 
to  spare.  Some  have  thus  cleared  off  mortgages  from  their  fathers' 
farms;  others  have  educated  the  hope  of  the  family  at  college;  and 
many  are  rapidly  accumulating  an  independence.  I  saw  a  whole 
street  of  houses  built  with  the  earnings  of  the  girls;  some  with  piazzas, 
and  green  Venetian  blinds;  and  all  neat  and  sufficiently  spacious. 

The  factory  people  built  the  church,  which  stands  conspicuous 
on  the  green  in  the  midst  of  the  place.  The  minister's  salary  (eight 
hundred  dollars  last  year)  is  raised  by  a  tax  on  the  pews.  The  cor- 
poration gave  them  a  building  for  a  lyceum,  which  they  have  fur- 
nished with  a  good  library,  and  where  they  have  lectures  every 
winter,  —  the  best  that  money  can  procure.  The  girls  have,  in  many 
instances,  private  libraries  of  some  merit  and  value. 

The  managers  of  the  various  factory  establishments  keep  the 
wages  as  nearly  equal  as  possible,  and  then  let  the  girls  freely  shift 
about  from  one  to  another.  When  a  girl  comes  to  the  overseer  to 
inform  him  of  her  intention  of  working  at  the  mill,  he  welcomes  her, 
and  asks  how  long  she  means  to  stay.  It  may  be  six  months,  or  a 
year,  or  five  years,  or  for  life.  She  declares  what  she  considers  her- 
self fit  for,  and  sets  to  work  accordingly.  If  she  finds  that  she  cannot 
work  so  as  to  keep  up  with  the  companion  appointed  to  her,  or  to 
please  her  employer  or  herself,  she  comes  to  the  overseer,  and  volun- 
teers to  pick  cotton,  or  sweep  the  rooms,  or  undertake  some  other 
service  that  she  can  perform. 

The  people  work  about  seventy  hours  per  week,  on  the  average. 
The  time  of  work  varies  with  the  length  of  the  days,  the  wages  con- 
tinuing the  same.  All  look  like  well-dressed  young  ladies.  The 
health  is  good;  or  rather,  (as  this  is  too  much  to  be  said  about  health 
anywhere  in  the  United  States,)  it  is  no  worse  than  it  is  elsewhere. 

These  facts  speak  for  themselves.  There  is  no  need  to  enlarge 
on  the  pleasure  of  an  acquaintance  with  the  operative  classes  of  the 
United  States. 

The  shoe-making  at  Lynn  is  carried  on  almost  entirely  in  private 
dwellings,  from  the  circumstance  that  the  people  who  do  it  are 
almost  all  farmers  or  fishermen  likewise.  A  stranger  who  has  not 
been  enlightened  upon  the  ways  of  the  place  would  be  astonished 
at  the  number  of  small  square  erections,  like  miniature  school-houses, 
standing  each  as  an  appendage  to  a  dwelling-house.  These  are  the 
"shoe  shops,"  where  the  father  of  the  family  and  his  boys  work. 


POPULATION  AND  LABOR  531 

while  the  women  within  are  employed  in  binding  and  trimming. 
Thirty  or  more  of  these  shoe-shops  may  be  counted  in  a  walk  of  half- 
a-mile.  When  a  Lynn  shoe  manufacturer  receives  an  order,  he  issues 
the  tidings.  The  leather  is  cut  out  by  men  on  his  premises;  and 
then  the  work  is  given  to  those  who  apply  for  it;  if  possible,  in  small 
quantities,  for  the  sake  of  dispatch.  The  shoes  are  brought  home 
on  Friday  night,  packed  off  on  Saturday,  and  in  a  fortnight  or  three 
weeks  are  on  the  feet  of  dwellers  in  all  parts  of  the  Union.  The 
whole  family  works  upon  shoes  during  the  winter;  and  in  the  summer, 
the  father  and  sons  turn  out  into  the  fields,  or  go  fishing.  .  .  . 

B.   Superiority  of  the  Operatives,  1833  l 

Another  English  traveler,  Patrick  Shirreff,  "Farmer,"  visited  Lowell  in  1835. 
The  superiority  of  the  mill  operatives  over  the  same  class  in  England  was  noticed 
by  this  traveler  and  recorded  as  follows : 

The  females  engaged  in  manufacturing  amount  to  nearly  5000, 
and  as  we  arrived  at  Lowell  on  the  afternoon  of  Saturday,  we  had 
an  opportunity  of  seeing  those  connected  with  some  of  the  largest 
cotton  factories  retiring  from  labour.  All  were  clean,  neat,  and 
fashionably  attired,  with  reticules  hanging  on  their  arms,  and  calashes 
on  their  heads.  They  commonly  walked  arm  in  arm  without  dis- 
playing levity.  Their  general  appearance  and  deportment  was  such 
that  few  British  gentlemen,  in  the  middle  ranks  of  life,  need  have 
been  ashamed  of  leading  any  one  of  them  to  a  tea-party.  Next  day, 
being  Sunday,  we  saw  the  young  females  belonging  to  the  factories 
going  to  church  in  their  best  attire,  when  the  favourable  impressions 
of  the  preceding  evening  were  not  effaced.  They  lodge,  generally, 
in  boarding-houses,  and  earn  about  8s.  6d.  sterling  per  week,  inde- 
pendent of  board;  serving  girls  earn  about  45.  3d. 

The  recent  introduction  of  large  manufacturing  establishments, 
thin  population,  and  ample  reward  of  labour,  account  for  the  apparent 
comfort  and  propriety  of  the  Lowell  young  women.  The  situation 
of  the  manufacturing  class  in  Britain  is  very  different;  nurtured  amidst 
poverty  and  vice,  they  toil  in  crowded  and  unwholesome  factories 
from  infancy,  often  disregarded  by  parents  and  employers,  and 
attaining  maturity  ruined  in  constitution  and  in  morals,  with  few 
of  the  sympathies  of  humanity. 

The  factories  and  dwelling-houses  at  Lowell  are  mostly  composed 


1  A  Tour  Through  North  America.     By  Patrick  Shirreff  (Edinburgh,  1835), 
45-6- 


532  READINGS  IN  ECONOMIC  HISTORY 

of  brick,  although  good  building  stone  is  to  be  had  everywhere.  The 
people  seem  to  be  influenced  by  habit  in  house-building  at  Lowell; 
a  wooden  dwelling-house  was  being  erected  where  rock,  which  had 
been  dug  from  the  cellar,  was  obstructing  its  progress,  and  thousands 
of  loads  of  stones  quarried  in  forming  a  railway,  were  lying  at  not 
more  than  one  hundred  yards  distant.  Here  I  saw  a  stone  arch 
building  across  a  lateral  branch  of  the  canal,  which  was  the  only 
bridge  of  that  material  I  saw  —  wood  generally  being  used  for  their 
construction.  Many  large  sized  dwelling-houses  and  factories  were 
in  the  progress  of  erection. 

C.   Home  Life  of  the  Mill  Operatives,  1854  1 

The  home  life  of  the  mill  operatives  appears  to  have  been  exceptionally  good, 
and  it  attracted  the  attention  of  English  travelers,  whose  ideas  of  factory  life  and 
work  were  gathered  from  the  squalid  surroundings  of  the  Manchester  (England) 
factories. 

Furnished  with  letters  from  Mr.  Abbott  Lawrence,  I  visited 
Lowell,  famous  for  its  factories  belonging  to  a  corporation,  and  for 
its  factory  girls,  better  known  by  the  more  elegant  title  of  the  "young 
ladies"  of  Lowell.  About  an  hour's  railway  drive  brought  me  to 
that  phenomenon  to  an  Englishman,  a  smokeless  factory  town  cano- 
pied by  an  Italian  sky.  Here,  water,  pure,  sparkling,  and  mighty 
in  strength,  from  the  Merrimack  river,  does  the  duty  of  steam-engines, 
driving  huge  wheels  and  turbines  attached  to  enormous  factories. 
To  describe  these  is  unnecessary,  as  they  differ  but  little  in  their  in- 
ternal economy  from  those  in  our  manufacturing  districts.  There 
are  eight  manufacturing  corporations  and  thirty-five  mills,  which  pro- 
duce 2,139,000  yards  of  piece-goods  weekly,  consisting  of  sheetings, 
shirtings,  drillings,  and  printing  cloths.  These  are  fully  equal  in 
quality  to  similar  goods  manufactured  in  .England.  Not  being  in 
the  trade,  the  "young  ladies"  interested  me  more  than  the  spinning- 
jennies  or  looms;  and,  before  I  had  gone  through  one  mill,  I  was 
ready  to  admit  that  the  difference  between  a  Manchester  factory 
girl  and  a  Lowell  "young  lady,"  is  great  indeed.  The  latter  is  gen- 
erally good-looking,  often  pretty,  dresses  fashionably,  wears  her  hair 
a  Vlmperatrice  or  a  la  Chinoise,  and  takes  delight  in  finery,  and  flowers, 
which  give  a  gay  appearance  to  the  factory  rooms.  But  it  would  be 
unfair  to  institute  a  comparison  between  the  Manchester  and  Lowell 


1  A  Vacation  Tour  in  the  United  States  and  Canada.     By  Charles  Richard  Weld 
(London,  1855),  50-3. 


POPULATION  AND   LABOR  533 

factory  girl ;  as  the  former  is  born  in  that  hard  school  where  work  is 
a  life-long  taskmaster,  while  the  latter  is  generally  the  daughter  or 
relative  of  a  substantial  farmer,  who  enters  the  mills  for  the  purpose 
of  gaming  a  little  independence,  and  seldom  remains  there  more  than 
a  few  years.  Thus  the  employment  takes  higher  rank  than  with 
us,  and  the  "young  ladies"  live  in  a  manner  that  would  greatly  aston- 
ish an  English  factory  girl.  Requesting  permission  to  see  one  of  the 
Lowell  boarding-houses,  where  the  "young  ladies"  reside,  I  was 
directed  to  the  establishment  usually  shown  to  visitors;  but,  conceiv- 
ing it  desirable  to  step  aside  from  the  beaten  track,  I  knocked  at  the 
door  of  a  different  house.  The  residences  of  the  "young  ladies"  are 
excellent,  forming  rows  separated  by  wide  streets,  shaded  by  a  pro- 
fusion of  trees,  and  bright  with  flowers.  My  request  to  be  permitted 
to  see  the  house  did  not  meet  with  ready  assent.  After  some  parley 
with  the  servant,  the  mistress  appeared,  and  made  particular  in- 
quiries respecting  the  object  of  my  visit,  adding,  it  was  not  her  cus- 
tom to  show  her  house  to  strangers.  This  made  me  the  more  desirous 
of  gaining  admission ;  and  having  succeeded  in  satisfying  the  lady  I 
was  merely  a  curious  Englishman,  she  allowed  me  to  enter,  and  took 
great  pains  in  showing  me  her  establishment,  assuring  me  had  she 
been  aware  of  my  visit  she  would  have  put  her  house  in  order.  But 
it  needed  no  preparation  to  convince  me  the  "young  ladies"  are 
admirably  provided  for.  A  large  sitting-room  occupied  a  considerable 
portion  of  the  basement  floor,  beyond  which  was  the  refectory;  above 
were  airy  bedrooms,  well  furnished,  containing  from  two  to  four  beds. 
The  provisions,  which  my  conductress  insisted  I  should  taste,  were 
excellent;  and  when  I  add  the  "young  ladies"  are  waited  on,  and 
have  their  clothes  washed,  with  the  exception  of  their  laces,  &c., 
which  they  prefer  washing  themselves,  it  will  be  seen  they  are  very 
comfortable.  For  their  board  and  lodging  they  pay  six  dollars  a 
month,  one-sixth  of  which  is  paid  by  the  corporation;  and  as  their 
average  earnings  are  about  three  and  a  half  dollars  a  week,  it  is  evi- 
dent that,  if  not  extravagant  in  their  dress,  they  have  it  in  their  power 
to  save  a  considerable  sum  yearly.  But  I  fear,  from  the  number  of 
gay  bonnets,  parasols,  and  dresses  which  I  saw  in  the  "young  ladies'  " 
apartments,  a  large  proportion  of  the  weekly  wages  is  spent  on  these 
objects.  At  the  same  time  it  is  right  to  add  that  the  strictest  pro- 
priety reigns  throughout  their  community,  comprising  1870  females; 
and  it  was  gratifying  to  hear  that,  although  the  famous  Lowell 
Offering  periodical  has  been  discontinued,  the  books  borrowed  from 
the  town  library,  for  the  use  of  which  half  a  dollar  is  paid  yearly, 


534  READINGS  IN  ECONOMIC  HISTORY 

are  of  a  healthy  literary  nature.  The  total  number  of  operatives 
at  Lowell  when  I  visited  it  was  nearly  10,000,  and  their  savings  in- 
vested in  the  bank  of  deposit  1,104,000  dollars. 

D.  Hours  of  Labor,  1845  l 

There  was,  however,  a  dark  side  to  the  picture  presented  by  our  English 
travelers.  The  hours  of  labor  were  long  and  the  work  arduous,  and  even  though 
conditions  at  Lowell  were  better  than  those  to  be  found  in  English  mills,  they 
merited  and  received  the  criticism  of  a  legislative  investigating  committee  in  1845. 
That  part  of  the  committee's  report  dealing  with  hours  of  labor  is  as  follows: 

During  our  short  stay  in  Lowell,  we  gathered  many  facts,  which 
we  deem  of  sufficient  importance  to  state  in  this  report,  and  first,  in 
relation  to  the  Hours  of  Labor. 

From  Mr.  Clark,  the  agent  of  the  Merrimack  Corporation,  we 
obtained  the  following  table  of  the  time  which  the  mills  run  during 
the  year. 

Begin  work.  From  ist  May  to  3ist  August,  at  5  o'clock.  From 
ist  September  to  3oth  April,  as  soon  as  they  can  see. 

Breakfast.  From  ist  November  to  28th  February,  before  going 
to  work.  From  ist  March  to  3ist  of  March,  at  7!  o'clock.  From 
ist  April  to  i gth  September,  at  seven  o'clock.  From  2oth  September 
to  3ist  October,  at  7^  o'clock.  Return  in  half  an  hour. 

Dinner.  Through  the  year  at  \2\  o'clock.  From  ist  May  to  3 ist 
August,  return  in  45  minutes.  From  ist  September  to  3©th  April, 
return  in  30  minutes. 

Quit  work.  From  ist  May  to  3 ist  August,  at  7  o'clock.  From 
ist  September  to  igth  September,  at  dark.  From  soth  September  to 
ipth  March,  at  7!  o'clock.  From  2oth  March  to  3©th  April,  at  dark. 

Lamps  are  never  lighted  on  Saturday  evenings.  The  above  is 
the  time  which  is  kept  in  all  the  mills  in  Lowell,  with  a  slight  differ- 
ence in  the  machine  shop ;  and  it  makes  the  average  daily  time  through- 
out the  year,  of  running  the  mills,  to  be  twelve  hours  and  ten  minutes. 

There  are  four  days  in  the  year  which  are  observed  as  holidays, 
and  on  which  the  mills  are  never  put  in  motion.  These  are  Fast  Day, 
Fourth  of  July,  Thanksgiving  Day,  and  Christmas  Day.  These 
make  one  day  more  than  is  usually  devoted  to  pastime  in  any  other 
place  in  New  England.  The  following  table  showrs  the  average  hours 
of  work  per  day,  throughout  the  year,  in  the  Lowell  Mills. 

1  Documentary  History  of  American  Industrial  Society.  Edited  by  John  R. 
Commons  and  others  (Cleveland,  1910),  VIII,  141-2.  Printed  by  permission  of 
the  publishers,  The  Arthur  H.  Clark  Company. 


POPULATION  AND   LABOR  535 

Hrs.  Min.  Hrs.  Min. 

January 1 1         24          July 12  45 

February 12         .  .           August 12  45 

March n         52           September 12  23 

April 13        31           October 12  10 

May 12         45           November 1 1  56 

June 12         45           December 1 1  24 


E.   An  Unfriendly  View,  1846  l 

Despite  the  superiority  of  the  American  operatives  and  the  relatively  high  wages 
received  by  them,  there  were  agitators  who  professed  to  believe  that  factory  con- 
ditions in  the  United  States  were  far  worse  than  they  really  were.  The  following 
criticism  of  the  conditions  at  Lowell  was  published  in  1846: 

We  have  lately  visited  the  cities  of  Lowell  and  Manchester, 
and  have  had  an  opportunity  of  examining  the  factory  system  more 
closely  than  before.  We  had  distrusted  the  accounts,  which  we 
had  heard  from  persons  engaged  in  the  Labor  Reform,  now  beginning 
to  agitate  New  England;  we  could  scarcely  credit  the  statements 
made  in  relation  to  the  exhausting  nature  of  the  labor  in  the  mills, 
and  to  the  manner  in  which  the  young  women,  the  operatives,  lived 
in  their  boarding-houses,  six  sleeping  in  a  room,  poorly  ventilated. 

We  went  through  many  of  the  mills,  talked  particularly  to  a  large 
number  of  the  operatives,  and  ate  at  their  boarding-house,  on  pur- 
pose to  ascertain  by  personal  inspection  the  facts  of  the  case.  We 
assure  our  readers  that  very  little  information  is  possessed,  and  no 
correct  judgments  formed,  by  the  public  at  large,  of  our  factory 
system,  which  is  the  first  germ  of  the  Industrial  or  Commercial  Feudal- 
ism, that  is  to  spread  over  our  land.  .  .  . 

In  Lowell  live  between  seven  and  eight  thousand  young  women, 
who  are  generally  daughters  of  farmers  of  the  different  States  of 
New  England;  some  of  them  are  members  of  families  that  were 
rich  the  generation  before.  .  .  . 

The  operatives  work  thirteen  hours  a  day  in  the  summer  time, 
and  from  daylight  to  dark  in  the  winter.  At  half  past  four  in  the 
morning  the  factory  bell  rings,  and  at  five  the  girls  must  be  in  the 
mills.  A  clerk,  placed  as  a  watch,  observes  those  who  are  a  few 
minutes  behind  the  time,  and  effectual  means  are  taken  to  stimulate 
to  punctuality.  This  is  the  morning  commencement  of  the  indus- 

1  Documentary  History  of  American  Industrial  Society.  Edited  by  John  R. 
Commons  and  others  (Cleveland,  1910),  VII,  132-5.  Printed  by  permission  of 
the  publishers,  The  Arthur  H.  Clark  Company. 


536  READINGS  IN  ECONOMIC  HISTORY 

trial  discipline  —  (should  we  not  rather  say  industrial  tyranny?) 
which  is  established  in  these  Associations  of  this  moral  and  Christian 
community.  At  seven  the  girls  are  allowed  thirty  minutes  for  break- 
fast, and  at  noon  thirty  minutes  more  for  dinner,  except  during  the 
first  quarter  of  the  year,  when  the  time  is  extended  to  forty-five  min- 
utes. But  within  this  time  they  must  hurry  to  their  boarding-houses 
and  return  to  the  factory,  and  that  through  the  hot  sun,  or  the  rain 
and  cold.  A  meal  eaten  under  such  circumstances  must  be  quite 
unfavorable  to  digestion  and  health,  as  any  medical  man  will  inform 
us.  At  seven  o'clock  in  the  evening  the  factory  bell  sounds  the  close 
of  the  day's  work. 

Thus  thirteen  hours  per  day  of  close  attention  and  monotonous 
labor  are  exacted  from  the  young  women  in  these  manufactories. 
...  So  fatigued  —  we  should  say,  exhausted  and  worn  out,  but 
we  wish  to  speak  of  the  system  in  the  simplest  language  —  are  num- 
bers of  the  girls,  that  they  go  to  bed  soon  after  their  evening  meal, 
and  endeavor  by  a  comparatively  long  sleep  to  resuscitate  their 
weakened  frames  for  the  toils  of  the  coming  days.  When  Capital 
has  got  thirteen  hours  of  labor  daily  out  of  a  being,  it  can  get  nothing 
more.  It  would  be  a  poor  speculation  in  an  industrial  point  of  view 
to  own  the  operative;  for  the  trouble  and  expense  of  providing  for 
times  of  sickness  and  old  age  would  more  than  counterbalance  the 
difference  between  the  price  of  wages  and  the  expense  of  board  and 
clothing.  The  far  greater  number  of  fortunes,  accumulated  by  the 
North  in  comparison  with  the  South,  shows  that  hireling  labor  is 
more  profitable  for  Capital  than  slave  labor. 

Now  let  us  examine  the  nature  of  the  labor  itself,  and  the  condi- 
tions under  which  it  is  performed.  Enter  with  us  into  the  large  rooms, 
when  the  looms  are  at  work.  The  largest  that  we  saw  is  in  the 
Amoskeag  Mills  at  Manchester.  It  is  four  hundred  feet  long,  and 
about  seventy  broad;  there  are  five  hundred  looms,  and  twenty-one 
thousand  spindles  in  it.  The  din  and  clatter  of  these  five  hundred 
looms  under  full  operation,  struck  us  on  first  entering  as  something 
frightful  and  infernal,  for  it  seemed  such  an  atrocious  violation  of  one 
of  the  faculties  of  the  human  soul,  the  sense  of  hearing.  After  a 
while  we  became  somewhat  inured  to  it,  and  by  speaking  quite  close 
to  the  ear  of  an  operative  and  quite  loud,  we  could  hold  a  conversa- 
tion, and  make  the  inquiries  we  wished. 

The  girls  attend  upon  an  average  three  looms;  many  attend  four, 
but  this  requires  a  very  active  person,  and  the  most  unremitting 
care.  However,  a  great  many  do  it.  Attention  to  two  is  as  much  as 


POPULATION   AND   LABOR  537 

should  be  demanded  of  an  operative.  This  gives  us  some  idea  of 
the  application  required  during  the  thirteen  hours  of  daily  labor. 
The  atmosphere  of  such  a  room  cannot  of  course  be  pure;  on  the 
contrary  it  is  charged  with  cotton  filaments  and  dust,  which,  we  were 
told,  are  very  injurious  to  the  lungs.  On  entering  the  room,  although 
the  day  was  warm,  we  remarked  that  the  windows  were  down;  we 
asked  the  reason,  and  a  young  woman  answered  very  naively,  and 
without  seeming  to  be  in  the  least  aware  that  this  privation  of  fresh 
air  was  anything  else  than  perfectly  natural,  that  "when  the  wind 
blew,  the  threads  did  not  work  so  well."  After  we  had  been  in  the 
room  for  fifteen  or  twenty  minutes,  we  found  ourselves,  as  did  the 
persons  who  accompanied  us,  in  quite  a  perspiration,  produced  by 
a  certain  moisture  which  we  observed  in  the  air,  as  well  as  by  the 
heat.  .  .  . 

The  young  women  sleep  upon  an  average  six  in  a  room;  three 
beds  to  a  room.  There  is  no  privacy,  no  retirement  here;  it  is  almost 
impossible  to  read  or  write  alone,  as  the  parlor  is  full  and  so  many 
sleep  in  the  same  chamber.  A  young  woman  remarked  to  us,  that 
if  she  had  a  letter  to  write,  she  did  it  on  the  head  of  a  band-box,  sitting 
on  a  trunk,  as  there  was  not  space  for  a  table.  So  live  and  toil  the 
young  women  of  our  country  in  the  boarding-houses  and  manufac- 
tories, which  the  rich  and  influential  of  our  land  have  built  for  them. 

IV.   EXPERIMENTS  IN  COMMUNISM 
A.    The  Rappiies,  1840  l 

During  the  period  1808-1860  many  experiments  in  communism  were  made 
in  the  United  States.  Of  the  best  known  of  these  experiments  one  was  carried  out 
by  the  Rappites  at  Economy,  Pennsylvania,  another  by  the  Owenites  at  New  Har- 
mony, Indiana,  and  yet  others  by  the  followers  of  Fourier  in  various  parts  of  the 
country.  An  English  traveler  gives  an  account  of  his  visit  among  the  Rappites 
as  follows: 

The  settlement  of  Economy  embraces  at  present  a  tract  of 
about  4,000  acres  of  rich  land,  on  the  northern  bank  of  the  river 
Ohio,  in  the  State  of  Pennsylvania,  from  1 6  to  20  miles  below  Pitts- 
burgh —  the  land  alone  being  worth,  at  20  dollars  an  acre,  80,000 
dollars,  and  the  dwellings,  stores,  and  larger  buildings,  80,000  dollars 
more  —  while  the  stock  of  grain  and  cattle,  materials  of  manufacture, 
machinery,  and  implements,  is  thought  to  be  worth  160,000  dollars; 

1  The  Eastern  and  Western  States  of  America.  By  J.  S.  Buckingham  (London, 
[1842]),  II,  212-3,  216-20. 


538  READINGS  IN  ECONOMIC  HISTORY 

in  addition  to  which,  they  have  in  cash,  bank-stock,  and  other  de- 
scriptions of  securities,  nearly  200,000  dollars;  so  as  to  make  the 
whole  property  amount  to  about  500,000  dollars  —  or  ioo,ooo£ 
sterling,  for  a  community  of  about  500  persons,  equivalent  to  1000 
dollars  each. 

The  plan  of  the  town  is  symmetrical;  the  streets,  about  80  feet 
in  breadth,  crossing  each  other  at  right  angles,  and  lined  on  each  side 
with  trees,  but  not  paved,  either  at  the  sides  or  centre,  as  there  is  no 
thoroughfare  of  vehicles  or  passengers  in  sufficient  numbers  to  render 
this  necessary.  The  dwelling-houses,  of  wrhich  there  are  about  100, 
are  small  —  of  two  stories  chiefly;  many  of  brick,  and  others  of  wood 
—  most  of  them  standing  separately,  and  having  a  large  portion  of 
garden-ground  attached  to  them,  which  is  very  neatly  cultivated.  .  .  . 

The  property  being  held  in  common,  no  individual  lays  claim  to 
anything  as  his  own;  and  as  nothing  is  either  bought  or  sold  among 
themselves,  money  is  of  course  unnecessary.  Stores  of  various  de- 
scriptions exist,  for  the  several  articles  in  daily  consumption  —  such 
as  provisions  of  all  kinds,  clothing,  furniture,  &c.,  all  of  a  simple, 
but  wholesome  and  substantial  kind ;  and  each  of  these  stores  is  placed 
under  the  superintendence  of  a  competent  individual.  At  stated 
periods  in  the  day  or  week,  the  caterer  for  each  family  goes  to  the 
store,  and  procures  such  articles  as  may  be  required,  and  there  is  no 
limitation  to  the  quantity  to  be  supplied.  Experience  soon  estab- 
lishes a  sort  of  standard  of  probable  sufficiency,  and  this  is  generally 
found  to  be  adequate  to  the  regular  consumption,  beyond  which 
there  is  no  temptation  either  to  hoard  or  waste.  As  there  is  always 
enough  for  every  one,  there  is  no  apprehension  of  scarcity;  and  as 
the  habit  of  care  and  economy  is  established  both  by  precept  and 
example,  waste  would  be  deemed  sinful,  and  is  never  practised.  It 
is  the  same  with  clothes  as  with  provisions.  Only  certain  articles 
of  apparel,  all  substantial  and  good,  but  simple  in  colour  and  form, 
are  made  for  males  and  females,  from  materials  woven,  and  labour 
supplied,  in  the  place;  and  whenever  any  of  these  garments  are  re- 
quired, application  to  the  store  is  sufficient  to  obtain  them,  "without 
money,  and  without  price." 

Persons  being  thus  assured  of  a  full  and  sufficient  supply  of  good 
food,  good  clothing,  comfortable  shelter,  and  an  equal  share  of  what- 
ever social  privileges,  or  accumulations  of  property  within  the  com- 
munity, may  be  the  fruits  of  this  system, —  cheerfully  give  their 
labour  as  an  equivalent  for  this;  especially  as  that  labour  is  healthy, 
light,  and  in  no  respect  degrading.  The  men  work  about  ten  hours  a 


POPULATION  AND  LABOR  539 

day;  having  breakfast  at  half-past  six  —  dinner  at  half -past  eleven  — 
and  supper  at  half-past  five.  The  females  working  in  the  cotton- 
factory  have  only  eight  hours'  labour;  and  in  the  dwellings  still  less, 
for  at  nine  in  the  evening  every  one  retires,  and  they  have  several 
hours  of  leisure  in  the  day.  .  .  . 

To  them,  it  is  matter  of  the  utmost  indifference,  whether  the 
Banks  suspend  payment  or  redeem  their  notes  in  specie  —  whether 
trade  is  flourishing  or  otherwise  —  whether  bankrupts  are  many  or 
few  —  and  whether  the  Whigs  or  the  Democrats  prevail.  They  go 
on  tilling  their  fields,  and  reaping  their  harvest;  feeding  their  sheep, 
and  shearing  their  wool;  growing  their  fruits,  and  gathering  them 
in  —  let  the  times  be  what  they  may.  All  the  materials  produced 
by  them  are  first  stored  in  sufficient  quantity  for  the  consumption 
of  their  own  community,  and  the  rest  they  send  to  market.  The 
only  things  they  require  to  buy,  are  cotton  for  their  manufactures, 
and  colonial  produce  for  their  household  supplies;  neither  of  which 
their  soil  or  climate  will  admit  of  their  growing.  Their  own  wool 
and  their  own  silk  they  work  up  into  cloth,  velvets,  silks,  and  satins. 
Of  these  also  they  sell  the  surplus  above  what  they  themselves  con- 
sume. To  avoid  all  risks,  they  sell  at  small  profit  for  ready  money; 
and  they  purchase  their  raw  cotton,  their  coffee,  tea,  sugar,  &c.,  with 
ready  money  also,  at  reduced  rates.  And  as,  in  every  year's  trans- 
actions, there  is  a  considerable  gain  to  the  community  —  since  they 
always  produce  much  more  than  they  can  consume  —  the  excess  of 
gain  is  expended  in  the  purchase  of  new  land,  the  erection  of  new 
buildings,  and  the  procuring  of  new  stock ;  or  it  is  otherwise  invested 
in  some  secure  manner,  so  as  to  ensure  the  safety  of  both  principal 
and  interest. 

B.   The  Owenites  at  New  Harmony,  1830  l 

The  experiment  at  New  Harmony  was  short  lived,  and  many  reasons  have  been 
advanced  to  account  for  the  failure  of  the  experiment.  An  account  of  the  failure, 
by  an  apparently  unbiased  observer,  is  as  follows : 

New  Harmony  is  seated  on  the  banks  of  the  Wabash;  and  follow- 
ing the  sinuosities  of  that  river,  it  is  distant  sixty-four  or  five  miles 
from  the  Ohio,  but  over  land,  not  more  than  seventeen.  This  settle- 
ment was  purchased  by  Messrs.  MacClure  and  Owen  from  Mr.  Rapp, 
in  the  year  1823.  The  Rappites  had  been  in  possession  of  the  place 
for  six  years,  during  which  they  had  erected  several  large  brick  build- 

1  A  Ramble  of  Six  Thousand  Miles  Through  the  United  States  of  America.  By 
S.  A.  Ferrall  (London,  1832),  92-3,  97-9. 


540  READINGS  IN  ECONOMIC  HISTORY 

ings  of  a  public  nature,  and  sundry  smaller  ones  as  residences,  and 
had  cultivated  a  considerable  quantity  of  land  in  the  immediate 
vicinity  of  the  town.  Mr.  Owen  intended  to  have  established  here 
a  community  of  union  and  mutual  co-operation;  but,  from  a  too 
great  confidence  in  the  power  of  the  system  which  he  advocates,  to 
reform  character,  he  has  been  necessitated  to  abandon  that  design 
at  present.  .  .  . 

Whilst  at  Harmony,  I  collected  some  information  relative  to  the 
failure  of  the  community,  and  I  shall  here  give  a  slight  sketch  of  the 
result  of  my  inquiries.  I  must  observe  that  so  many,  and  such  con- 
flicting statements,  respecting  public  measures,  I  believe  never  were 
before  made  by  a  body  of  persons  dwelling  within  limits  so  confined 
as  those  of  Harmony.  Some  of  the  ci-devant  "communicants"  call 
Robert  Owen  a  fool,  whilst  others  brand  him  with  still  more  oppro- 
brious epithets:  and  I  never  could  get  two  of  them  to  agree  as  to  the 
primary  causes  of  the  failure  of  that  community. 

The  community  was  composed  of  a  heterogeneous  mass,  collected 
together  by  public  advertisement,  which  may  be  divided  into  three 
classes.  The  first  class  was  composed  of  a  number  of  well-educated 
persons,  who  occupied  their  time  in  eating  and  drinking  —  dressing 
and  promenading  —  attending  balls,  and  improving  the  habits  of 
society;  and  they  may  be  termed  the  aristocracy  of  this  Utopian 
republic.  The  second  class  were  composed  of  practical  co-operators, 
who  were  well  inclined  to  work,  but  who  had  no  share,  or  voice,  in 
the  management  of  affairs.  The  third  and  last  class  was  a  body  of 
theoretical  philosophers  —  Stoics,  Platonics,  Pythagoreans,  Epicu- 
reans, Peripatetics,  and  Cynics,  who  amused  themselves  in  striking 
out  plans  —  exposing  the  errors  of  those  in  operation  —  caricaturing 
—  and  turning  the  whole  proceedings  into  ridicule. 

The  second  class,  disliking  the  species  of  co-operation  afforded 
them  by  the  first  class,  naturally  became  dissatisfied  with  their  inac- 
tivity —  and  the  third  class  laughed  at  them  both.  Matters  were 
in  this  state  for  some  time,  until  Mr.  Owen  found  the  funds  were 
completely  exhausted.  He  then  stated  that  the  community  should 
divide;  and  that  he  would  furnish  land,  and  all  necessary  materials, 
for  operations,  to  such  of  them  as  wished  to  form  a  community  apart 
from  the  original  establishment.  This  intimation  was  enough.  The 
first  class,  with  few  exceptions,  retired,  followed  by  part  of  both  the 
others,  and  all  exclaiming  against  Mr.  Owen's  conduct.  A  person 
named  Taylor,  who  had  entered  into  a  distillery  speculation  with  one 
of  Mr.  Owen's  sons,  seized  this  opportunity  to  get  the  control  of 


POPULATION  AND  LABOR  541 

part  of  the  property.  Mr.  Owen  became  embarrassed.  Harmony 
was  on  the  point  of  being  sold  by  the  sheriff  —  discord  prevailed, 
and  co-operation  ceased. 

C.   Description  of  a  Phalanx,  1849  l 

In  various  parts  of  the  United  States  communistic  groups  called  phalanxes 
were  organized.  A  description  of  one  of  these  phalanxes  by  a  friend  and  supporter 
follows: 

The  Wisconsin  Phalanx  was  incorporated  February,  1845.  The 
original  members  were  chiefly  from  Southport,  Wisconsin;  they 
possessed  no  experience  in  associative  life,  and  had  derived  their 
ideas  of  the  theory  of  Association,  principally  from  the  pamphlets 
and  newspaper  writings  of  the  school  of  Fourier.  By  a  clause  in  the 
charter  of  the  Phalanx,  the  increase  in  the  annual  appraisal  of  all 
the  property,  real  and  personal  of  the  Phalanx,  exceeding  the  cost, 
was  to  be  yearly  divided  or  credited  one  fourth  to  stock,  and  the 
remaining  three  fourths  to  labor,  in  such  manner  as  the  by-laws  should 
provide. 

The  Domain  of  the  Phalanx  contains  about  one  thousand,  eight 
hundred  acres  of  prime  land,  prairie,  oak-openings,  groves  and 
meadows,  in  Ceresco  township  and  vicinity,  Fond-du-lac  County. 
This  region  of  country,  is  not  exceeded  by  any  part  of  the  whole 
State,  for  beauty  of  scenery,  healthfulness  of  situation,  and  fertility 
of  soil.  No  ague  of  local  origin,  has  ever  been  known  here,  and  not 
one  adult  male  member  of  the  Society,  since  the  institution  of  the 
Phalanx,  has  deceased.  Five  women  have  died  on  the  Domain, 
during  the  entire  existence  of  the  Society;  but  before  their  coming 
to  Ceresco,  they  were  all  afflicted  with  the  diseases,  which  proved 
fatal  to  them.  Several  infants  and  small  children,  have  died  from 
complaints  incidental  to  that  period  of  life;  the  cause,  no  doubt, 
would  be  found  in  a  want  of  correct  knowledge  and  physiological 
treatment  in  regard  to  infants  and  young  children;  a  lack  of 
knowledge  certainly  not  greater  here  than  elsewhere.  We  are  con- 
fident that  no  region  in  the  whole  Northwest,  can  be  found  more 
remarkable  for  continued  good  health,  than  Ceresco,  and  the  ad- 
jacent country. 

There  is  a  good  water  power  on  the  Domain,  the  property  of  the 
Phalanx;  and  we  have  in  operation  a  Grist  Mill  and  a  Saw  Mill,  the 

1  Documentary  History  of  American  Industrial  Society.  Edited  by  John  R. 
Commons  and  others  (Cleveland,  1910),  VII,  264-6.  Printed  by  permission  of 
the  pubh'shers,  The  Arthur  H.  Clark  Company. 


542  READINGS  IN  ECONOMIC  HISTORY 

former  of  which  is  kept  constantly  employed.  A  new  and  commodious 
building,  intended  for  a  Protective  Union  Store,  has  been  erected  at 
the  private  cost  of  some  of  the  members,  and  is  nearly  sufficiently 
completed  for  the  commencement  of  business.  There  is  a  good  stone 
school  house;  a  blacksmith  shop  with  three  fires  in  full  employment; 
and  buildings  for  the  dwelling  of  members,  one  a  long  new  frame 
house,  conveniently  and  pleasantly  arranged,  several  of  the  rooms  of 
which  are  now  completed  and  occupied,  and  all  might  be  finished 
within  a  short  time,  and  at  no  great  expense.  Another  row  of  frame 
houses,  not  so  convenient  nor  strong  in  construction,  as  that  just 
referred  to,  was  put  up  at  the  first  founding  of  the  Society;  and  in 
this  latter  range  of  buildings,  the  greater  part  of  the  members  yet 
reside.  There  is  also  another  row  of  frame  buildings,  with  a  cupola 
and  a  bell,  a  kitchen,  a  bakery,  a  large  dining  room  and  apartments 
serving  for  the  accommodation  of  strangers  and  travelers.  In  addi- 
tion, there  is  a  substantial  stone  dwelling,  sufficiently  large  for  two 
families,  living  on  the  principles  of  Associative  life.  The  most  of 
these  buildings  have  been  constructed  with  a  view  to  a  unitary  mode 
of  life;  they  wrere  designed  for  temporary  use  in  a  transitional 
state  of  society  and  would  principally  be  serviceable  for  the  accommo- 
dation of  a  combined  or  friendly  company,  until  more  suitable  and 
comfortable  dwellings  were  erected.  They  would  contain  altogether 
about  thirty-five  families,  with  the  usual  average  number  of  persons 
to  a  family. 

V.   CHARACTER  OF  THE  PEOPLE  —  NORTH  AND  SOUTH 

The  Views  of  an  Englishman  with  Southern  Tendencies,  1860  l 

Although  the  people  of  different  sections  of  the  country  developed  the  same 
general  characteristics,  those  of  the  people  of  the  northern  states  differed  in  detail 
from  those  of  the  people  of  the  south.  An  Englishman  with  Southern  tendencies 
has  drawn  for  us  the  following  picture  of  the  people  of  the  different  sections: 

[CHARACTER  OF  THE  NORTHERN  PEOPLE] 

The  greatest  distinction  between  the  Northern  and  Southern 
States  of  the  Union  was  the  tendency  of  the  population  of  the  former 
to  the  towns  and  cities,  from  the  meagreness  and  unattractiveness 
of  life  in  the  country.  And  yet  it  is  a  beautiful  country  in  many 
parts  —  in  most  parts  of  New  England.  Generally  speaking,  the 
North,  as  to  healthfulness  and  scenery,  has  considerably  the  advan- 

1  Ten  Years  in  the  United  States.     By  D.  W.  Mitchell  (London,  1862),  192-6. 


POPULATION  AND   LABOR  543 

tage;  and  yet  the  natives  don't  seem  to  enjoy  rural  life;  they  neither 
talk  nor  look  as  if  they  did;  and  those  are  considered,  and  consider 
themselves,  fortunate,  who  abandon  it  to  go  and  push  their  fortunes 
in  town.  The  training  of  the  young,  and  the  notions  instilled  into 
them,  partly  account  for  this.  The  quietness  and  slow  profits  of 
farming  are  not  very  tempting  to  a  youth  who  has  been  brought  up 
to  believe  that  he  is  as  good  as  anybody  else,  and  that  there  is  no 
reason  why  he  should  not  be  a  millionaire  or  a  President,  if  he  only 
struggles  hard  enough;  a  very  unhealthy  and  irrational,  though  very 
popular  mode  of  exciting  youth  to  improve  themselves  —  seeing  that 
there  is  only  room  for  a  very  few  at  the  top  of  the  tree. 

Arrived  in  town,  the  young  American  looks  out  for  something 
light  and  genteel,  abandoning  hard  and  dirty  work  to  foreigners. 
While  the  West  has  been  calling  for  labourers,  workmen,  and  agri- 
culturists of  all  grades,  there  have  been  large  numbers  of  superfluous 
young  men  hanging  about  in  the  large  eastern  cities,  competing  for 
poorly  paid  employment,  principally  as  "clerks,"  as  shopmen  are 
called. 

The  universality  of  education  —  of  ability  to  read,  and  write, 
and  figure  a  little  —  accounts  partly  for  this  tendency.  A  youth  who 
has  been  to  school,  and  who  has  read  of  the  successful  struggles  of 
genius  with  poverty,  feels  that  he  is  lowering  himself,  and  throwing 
away  his  chances  of  rising  in  society,  by  submitting  to  hard,  long- 
continued  physical  labour;  especially  in  a  climate  like  that  of  the 
Northern  States,  where  the  summer  heat  and  winter  cold  are  so 
exhausting  to  the  system,  that  after  the  ordinary  ten  hours'  work, 
and  the  time  spent  in  rest  and  meals,  and  getting  to  and  from  the 
place  of  business,  the  workman  has  neither  leisure  nor  inclination  for 
intellectual  culture  by  study  of  any  kind.  Climate  has  not  yet  had 
time  to  tell  on  the  population  of  the  United  States  in  general,  recruited 
as  it  has  incessantly  been  by  immigrants  from  Europe;  but  by  analyz- 
ing the  population,  and  observing  that  portion  of  it  which  has  been 
longest  and  most  exposed  to  the  dry  land-air,  the  hot  summers,  and 
long,  cold  winters,  and  great  and  sudden  meteorological  changes  of  the 
North,  we  may  see  some  of  the  combined  effects  of  the  climate  and 
his  mode  of  life  and  general  circumstances  on  the  man  of  the  United 
States.  That  portion  is  the  farming  population,  of  Yankee  descent. 

The  type  of  this  class  is  a  rather  tall;  bony,  sinewy,  strong  man, 
with  very  little  fat;  with  none  of  the  English  ruddiness  of  complexion; 
with  a  good,  full,  well-formed  head,  and  a  brain  above  the  English 
average;  active,  persevering,  and  full  of  energy  —  not  a  lazy  bone 


544  READINGS  IN  ECONOMIC  HISTORY 

in  his  body;  well  marked,  intelligent,  decided  features,  highly  ex- 
pressive of  a  cautious,  secretive,  determined  character;  by  no  means 
a  handsome  man,  but  frequently  fine-looking  in  youth.  There  is 
too  often  about  him  a  look  of  being  overworked  both  in  mind  and 
body,  and  a  want  of  ease,  content,  and  cheerfulness.  His  mind  is 
always  at  work,  engaged  seriously 'on  something  useful  or  profitable; 
and  he  wears  himself  out  with  unceasing  anxious  thought  about  gain- 
ing and  saving:  not  avariciously,  but  to  provide  for  the  future,  and 
to  raise  himself  and  his  family  in  the  social  scale.  The  most  serious 
faults  in  his  character  are  too  much  thought  of  his  own  personal 
independence  and  dignity,  too  much  jealousy  of  any  superiority,  and 
an  unduly  excited  pride  and  ambition;  to  which  he  sacrifices  that 
little  occasional  indulgence  in  careless,  hearty,  social  enjoyment, 
which  is  necessary  to  health  of  mind  and  body. 

This  is,  I  think,  a  fair  description  of  the  predominant  race  in  the 
eastern  and  northern  States,  and  in  many  parts  of  the  west.  The 
Irish,  indeed,  interfere  seriously  with  its  supremacy,  and  lately,  to  a 
still  greater  extent,  the  Germans;  but  till  within  the  last  ten  years, 
this  Yankee  race  gave  the  tone  and  character  to  the  legislation  of 
the  free-labour  States. 

[CHARACTER  OF  THE  SOUTHERN  PEOPLE] 

The  typical  Southern  man  is  in  many  respects,  though  it  will  hardly 
be  expected,  more  British  and  European  in  habits,  appearance,  and 
character.  He  has  plenty  on  his  mind,  but  he  is  not  so  uneasy  about 
his  social  position,  and  allows  himself  more  pleasure  and  social  enjoy- 
ment —  often  too  much;  hence,  at  forty  and  fifty,  he  is  well  enough 
off  for  flesh  and  fat,  but  not  to  excess.  What  in  Europe  would  be 
called  a  fat  person  is  a  great  rarity  in  America,  and  is  seldom  to  be 
met  with,  except  among  the  Germans,  Englishmen,  negroes,  and 
negresses:  these  last  especially;  for  while  among  the  native-born 
whites  there  is  a  strong  tendency  to  dyspepsia,  the  blacks  seem 
constitutionally  inclined  to  hyperpepsia. 

The  preference  for  rural  life,  and  the  love  of  quiet  social  inter- 
course and  enjoyment,  mainly  distinguish  the  South  from  the  North; 
in  the  latter  section  the  want  of  domestic  unostentatious  sociableness 
has  been  much  dwelt  upon  at  times  by  the  press;  but  excessive  devo- 
tion to  money-making  and.  getting  on  in  the  world  seems  to  have 
become  an  incurable  habit.  There  are  four  national  holidays  — 
New  Year's  Day,  4th  of  July,  Thanksgiving  Day  and  Christmas 
Day, —  though,  in  fact,  Christmas  is  little  noticed  in  the  North,  while 


POPULATION  AND  LABOR  545 

New  Year's  Day  is  not  much  kept  at  the  South.  In  an  article  on 
this  subject,  headed,  "Are  we  a  happy  people?"  in  a  widely-read 
periodical,  it  was  asked,  "How  can  we  get  rid  of  the  Fourth  Holiday?" 
it  being  regarded  as  an  inconvenient  interruption :  in  towns,  at  least. 
And  one-third  of  the  people  of  the  United  States  live  in  towns  and 
cities:  in  the  North,  it  must  be  nearly  one-half;  and  in  the  South  a 
large  portion  of  the  few  town  people  live  nearly  half  the  year  on  their 
property  in  the  country. 


VI.  POPULATION 

Distribution  in  1860  l 

The  census  of  1860  showed  several  important  facts  regarding  the  growth  of 
population  during  the  previous  decade  and  its  distribution  in  1860.  The  largest 
growth  had  been  in  the  west  and  southwest,  while  in  one  state,  Vermont,  the 
increase  in  population  had  been  less  than  one  per  cent.  The  center  of  population, 
however,  was  in  the  east,  but  moving  steadily  westward. 

Though  the  number  of  States  has  increased  during  the  last  decen- 
nial period  from  thirty-one  to  thirty-four,  and  five  new  Territories 
have  been  organized,  the  United  States  has  received  no  accessions 
of  territory  within  that  term,  except  a  narrow  strip  to  the  southward 
of  the  Colorado  river,  along  the  Mexican  line,  not  yet  inhabited. 
As  general  good  health  prevailed,  and  peace  reigned  throughout  the 
country,  there  was  no  apparent  cause  of  disturbance  or  interruption 
to  the  natural  progress  of  population.  It  is  true  that  the  very  large 
immigration  from  Europe,  together  with  an  influx  of  considerable 
magnitude  from  Asia  to  California,  has  added  largely  to  the  augmen- 
tation which  the  returns  show  to  have  taken  place  during  the  decade. 

In  comparing  the  gain  of  any  class  of  the  population,  or  of  the 
whole  of  it,  one  decade  with  another,  the  rate  per  cent,  is  not  a  full 
test  of  advancement.  The  rate  of  gain  necessarily  diminishes  with 
the  density  of  population,  while  the  absolute  increase  continues  un- 
abated. The  actual  increase  of  the  entire  free  and  slave  population 
from  1850  to  1860,  omitting  the  Indian  tribes,  was  8,225,464,  and  the 
rate  per  cent,  is  set  down  at  35.46;  while  from  1840  to  1850  the  posi- 
tive increment  of  all  classes  was  6,122,423,  yet  the  ratio  of  gain  was 
35.87  per  cent.  The  two  decades  from  1800  to  1810,  and  from  1840 
to  1850,  were  marked  by  the  great  historical  facts  of  the  annexation 
of  Louisiana,  and  the  acquisition  of  Texas,  New  Mexico,  and  Cali- 

1  Preliminary  Report  on  the  Eighth  Census,  1860  (Washington,  1862),  3-8. 


546  READINGS  IN  ECONOMIC  HISTORY 

fornia.  Each  of  these  regions  contributed  considerably  to  the  popu- 
lation of  the  country,  and  we  accordingly  find  that  during  those  terms 
there  was  a  ratio  of  increase  in  the  whole  body  of  the  people  greater 
by  a  small  fraction  than  shown  by  the  table  annexed  for  the  decade 
preceding  the  Eighth  Census.  The  preponderance  of  gain,  however, 
for  that  decennial  term  above  all  the  others  since  1790,  is  signally 
large.  No  more  striking  evidence  can  be  given  of  the  rapid  advance- 
ment of  our  country  hi  the  first  element  of  national  progress  than 
that  the  increase  of  its  inhabitants  during  the  last  ten  years  is  greater 
by  more  than  1,000,000  of  souls  than  the  whole  population  in  1810, 
and  nearly  as  great  as  the  entire  number  of  people  hi  1820.  That 
the  whole  of  this  gain  is  not  from  natural. increase,  but  is,  in  part,  de- 
rived from  the  influx  of  foreigners  seeking  here  homes  for  themselves 
and  then-  children,  is  a  fact  which  may  justly  enhance  rather  than 
detract  from  the  satisfaction  wherewith  we  should  regard  this  aug- 
mentation of  our  numbers. 

Thus  far  hi  our  history  no  State  has  declined  in  population.  Ver- 
mont has  remained  nearly  stationary,  and  is  saved  from  a  positive  loss 
of  inhabitants  by  only  one-third  of  one  per  cent.  New  Hampshire, 
likewise,  has  gained  but  slowly,  her  increment  being  only  8,097,  or 
two  and  one-half  per  cent,  on  that  of  1850.  Maine  has  made  the 
satisfactory  increase  of  45,110,  or  7.74  per  cent.  The  old  agricultural 
States  may  be  said  to  be  filled  up,  so  far  as  regards  the  resources 
adapted  to  a  rural  population  in  the  present  condition  of  agricultural 
science.  The  conditions  of  their  increase  undergo  a  change  upon  the 
general  occupation  and  allotment  of  their  areas.  Manufactures  and 
commerce,  then,  come  in  to  supply  the  means  of  subsistence  to  an 
excess  of  inhabitants  beyond  what  the  ordinary  cultivation  of  the 
soil  can  sustain.  This  point  hi  the  progress  of  population  has  been 
reached,  and,  perhaps,  passed  in  most,  if  not  all,  of  the  New  England 
States.  But  while  statistical  science  may  demonstrate  within  narrow 
limits  the  number  of  persons  who  may  extract  a  subsistence  from  each 
square  mile  of  arable  land,  it  cannot  compute  with  any  reasonable 
approach  to  certainty  the  additional  population,  resident  on  the 
same  soil,  which  may  obtain  its  living  by  the  thousand  branches 
artificial  industry  which  the  demands  of  society  and  civilization  have 
created.  This  is  forcibly  illustrated  by  the  returns  relative  to  the 
three  other  New  England  States  —  Massachusetts,  Rhode  Island, 
and  Connecticut  —  which  contain  13,780  square  miles.  The  follow- 
ing table  shows  then-  population  in  1850  and  1860,  and  its  density 
at  each  period. 


POPULATION   AND   LABOR 


547 


18 

50 

18 

60 

States 

Population 

Number  of 

inhabitants 
to  the 
square  mile 

Population 

Number  of 
inhabitants 
to  the 
square  mile 

Massachusetts  

004^14 

127.49 

1,231,066 

157.83 

Connecticut  

370,792 

79-33 

460,147 

98.42 

Rhode  Island  

147,545 

112.97 

174.620 

133.63 

1,412,851 

1,865.833 

The  aggregate  territorial  extent  of  Maine,  Xew  Hampshire,  and 
Vermont,  is  48,336  square  miles;  the  number  of  their  inhabitants 
1,269,450,  or  26.26  to  the  square  mile.  The  stated  point  of  density 
was  passed  by  the  three  States  named  in  the  table  more  than  fifty 
years  ago,  and  yet  they  go  on  increasing  in  population  with  a  rapidity 
as  great  as  at  any  former  period  of  their  history. 

South  Carolina  has  gained  during  the  decade  35,201  inhabitants 
of  all  conditions,  equal  to  5.27  per  cent.  Of  this  increase  16,825  are 
whites,  and  the  remainder  free  colored  and  slaves.  It  is  perhaps 
a  little  remarkable  that  the  relative  increase  of  the  free  colored  class 
in  this  State  was  more  considerable  than  that  of  any  other.  As 
their  number,  9914,  is  so  small  as  to  excite  neither  apprehension  or 
jealousy  among  the  white  race,  the  increase  is  probably  due  both  to 
manumission  and  natural  causes.  This  State  has  made  slower  prog- 
ress during  the  last  term  than  any  other  in  the  south,  having  ad- 
vanced only  from  27.28  to  28.72  inhabitants  to  the  square  mile. 

Tennessee,  it  will  be  observed,  has  made  but  the  moderate  gain 
of  10.68  per  cent,  for  all  classes.  Of  this  aggregate  increase  the  whites 
have  gained  at  the  rate  of  9.24  per  cent,  upon  1850,  the  free  colored 
13.67,  and  slaves  15.14. 

The  next  lowest  in  the  rate  of  increase  in  the  list  of  southern 
States  is  Virginia,  whose  gain  upon  her  aggregate  population,  in 
1850,  was  174,657,  equal  to  12.29  per  cent.  The  white  class  gained 
152,611,  or  17.06  per  cent.,  the  slaves  18,337,  or  3-88  per  cent. 

These  are  examples  of  the  States  wherein  the  population  has 
advanced  with  slowest  progress  the  past  ten  years.  Turning  now 
to  the  States  which  have  made  the  most  rapid  advance,  we  find  that 
New  York  has  increased  from  3,097,394  to  3,880,735,  exhibiting  an 


548  READINGS  IN  ECONOMIC  HISTORY 

augmentation  of  783,341  inhabitants,  being  at  the  rate  of  25.29  per 
cent.  The  free  colored  population  has  fallen  off  64  since  1850,  a  di- 
minution to  be  accounted  for  probably  by  the  operation  of  the  fugitive 
slave  law,  which  induced  many  colored  persons  to  migrate  further 
north. 

The  gain  of  Pennsylvania  has  been  in  round  numbers  595,000. 
In  that  State  the  free  colored  have  increased  about  3,000.  The  greater 
mildness  of  the  climate  and  a  milder  type  of  the  prejudices  con- 
nected with  this  class  of  population,  the  result  of  benevolent  influ- 
ences and  its  proximity  to  the  slaveholding  States,  may  account  for 
the  fact  that  this  race  holds  its  own  in  Pennsylvania,  while  undergoing 
a  diminution  in  the  State  next  adjoining  on  the  north. 

Minnesota  was  chiefly  unsettled  territory  at  the  date  of  the  Seventh 
Census;  its  large  present  population,  as  shown  by  the  returns,  is 
therefore  nearly  clear  gain.  • 

The  vast  region  of  Texas  ten  years  since  was  comparatively  a 
wilderness.  It  has  now  a  population  of  over  600,000,  and  the  rate  of 
its  increase  is  given  as  184  per  cent. 

Illinois  presents  the  most  wonderful  example  of  great,  continuous, 
and  healthful  increase.  In  1830  Illinois  contained  157,445  inhabit- 
ants; in  1840,  476,183;  in  1850,  851,470;  in  1860,  1,711,951.  The 
gain  during  the  last  decade  was,  therefore,  860,481,  or  101.06  per 
cent.  So  large  a  population,  more  than  doubling  itself  in  ten  years, 
by  the  regular  course  of  settlement  and  natural  increase,  is  without 
a  parallel.  The  condition  to  which  Illinois  has  attained  under  the 
progress  of  the  last  thirty  years  is  a  monument  of  the  blessings  of 
industry,  enterprise,  peace,  and  free  institutions. 

The  growth  of  Indiana  in  population,  though  less  extraordinary 
than  that  of  her  neighboring  State,  has  been  most  satisfactory,  her 
gain  during  the  decade  having  been  362,000,  or  more  than  thirty- 
six  per  cent,  upon  her  number  in  1850. 

Michigan,  Wisconsin,  and  Iowa  have  participated  to  the  full  ex- 
tent in  the  surprising  development  of  the  northwest.  The  remark- 
able healthfulness  of  the  climate  of  that  region  seems  to  more  than 
compensate  for  its  rigors,  and  the  fertility  of  the  new  soil  leads  men 
eagerly  to  contend  with  and  overcome  the  harshness  of  the  elements. 
The  energies  thus  called  into  action  have,  in  a  few  years,  made  the 
States  of  the  northwest  the  granary  of  Europe,  and  that  section  of 
our  Union  which,  within  the  recollection  of  living  men,  was  a  wilderness 
is  now  the  chief  source  of  supply  in  seasons  of  scarcity  for  the  suffering 
millions  of  another  continent. 


POPULATION  AND  LABOR  549 

Looking  cursorily  over  the  returns,  it  appears  that  the  fifteen 
slaveholding  States  contain  12,240,000  inhabitants,  of  whom  8,039,000 
are  whites,  251,000  free  colored  persons,  and  3,950,000  are  slaves. 
The  actual  gain  of  the  whole  population  in  those  States  from  1850 
to  1860,  was  2,627,000,  equal  to  27.33  Per  cent.  The  slaves  advanced 
in  numbers  749,931,  or  23.44  per  cent.  This  does  not  include  the 
slaves  of  the  District  of  Columbia,  who  decreased  502  in  the  course 
of  the  ten  years.  The  nineteen  free  States  and  seven  Territories, 
together  with  the  federal  District,  contained,  according  to  the  Eighth 
Census,  19,201,546  persons,  including  27,749  Indians;  of  whom 
18,936,579  were  white,  and  237,218  free  colored.  The  increase  of 
both  classes  was  5,598,603,  or  41.24  per  cent.  No  more  satisfactory 
indication  of  the  advancing  prosperity  of  the  country  could  be  de- 
sired than  this  general  and  remarkable  progress  in  population.  North 
and  south  we  find  instances  of  unprecedented  gains,  as  in  the  case  of 
Illinois,  just  adverted  to.  In  the  southwest  the  great  State  of  Mis- . 
souri  has  increased  by  the  number  of  500,000  inhabitants,  which  is 
within  a  fraction  of  74  per  cent.  It  is  due  to  candor  to  state  that  the 
marked  disproportion  between  the  rate  of  gain  in  the  north  and  south 
respectively,  is  manifestly  to  some  extent  caused  by  the  larger  num- 
ber of  immigrants  who  settle  in  the  former  section,  on  account  of 
congeniality  of  climate,  the  variety  of  occupation,  the  dignity  where- 
with respectable  employment  is  invested,  and  the  freedom  of  labor. 

Having  thus  briefly  and  imperfectly  noticed  the  manner  in  which 
the  general  gain  of  population  during  the  last  ten  years  has  been 
distributed  among  the  States,  we  may  with  advantage  examine  the 
progress  of  the  country  as  a  whole,  in  this  respect,  from  1 790  to  1860 — 

.  .  .  [[There  has  beenj  considerable  uniformity  in  the  rate  of  pro- 
gression of  the  whole  population.  It  has  varied  in  the  different  de- 
cades from  32j6(j-  per  cent,  increase  to  365.  The  whites,  constituting 
the  great  bulk  of  the  inhabitants,  have  governed  the  ratio  of  augmenta- 
tion for  the  mass.  The  lowest  rate  of  increase  shown  for  that  class  was 
by  the  census  of  1830,  namely,  a  fraction  less  than  34  per  cent.  In 
1850  it  has  risen  above  38  per  cent.,  and  continued  to  be  about  the 
same  from  1850  to  1860.  The  number  of  free  colored  persons  was 
small  in  1 790,  and  as  a  condition  or  class  in  society  it  holds  about  the 
same  position  as  then.  We  possess  very  insufficient  means  for  esti- 
mating the  natural  increase  of  this  division  of  our  population.  Their 
aggregate  number  has  been  so  continually  affected  by  manumissions, 
by  legislation  changing  their  condition,  and  to  a  small  extent  by  emi- 
gration, that  from  these  causes,  rather  than  by  the  ordinary  progress 


55° 


READINGS  IN  ECONOMIC  HISTORY 


of  increase,  they  have  reached  a  total  of  nearly  half  a  million,  and  the 
rate  per  cent,  of  their  advancement  in  seventy  years,  has  been  equal 
to  that  of  the  whole  population,  and  not  very  far  below  that  of  the 
whites;  and  that  at  the  same  time  they  have  gained  in  a  ratio  nearly 
one-half  greater  than  the  slaves.  .  .  . 

[Aggregate  Population  and  Number  of  Inhabitants  to  the  Square  Mile'] 


185 

0. 

i86c 

/ 

States 

Area  in 
square 
miles 

Popula- 
tion 

No.  of 
inhabit- 
ants to 
square 
mile 

Popula- 
tion 

No.  of 
inhabit- 
ants to 
square 
mile 

New  England  States  (6)  

62,116 

2,728,106 

43.O2 

7T  7  C    28? 

e;o  4.7 

Middle  States,  including  Mary- 
land, Delaware,  and  Ohio  (6).  . 
Coast  planting  States,  including 
South      Carolina,      Georgia, 
Florida,  Alabama,  Mississippi, 
and  Louisiana  (6) 

151,760 
286,077 

8,553,713 

•j  ire?  8?2 

56.36 
12  At 

10,597,661 
A    l(\A  O27 

69.83 
I  ?  2C 

Central  slave  States,  Virginia, 
North    Carolina,    Tennessee, 
Kentucky,  Missouri,  and  Ark- 
ansas (6) 

•?  00,210 

•;,l67,276 

16  71 

6  471  887 

2O  O7. 

Northwestern   States,   Indiana, 
Illinois,  Michigan,  Wisconsin, 
Iowa,  Minnesota   (6)  

•277,01:7 

2,  734.,  O4.C 

8.90 

r  426,176 

1  6.08 

Texas  

237,  321 

212,^02 

0.8o 

604.,  2  1  ^ 

2.CC 

California  

188,982 

165,000 

0.87 

770,004 

2.OI 

VII.  IMMIGRATION 

Extent  and  Character,  1820-1860  1 

The  immigration  question  was  of  considerable  importance  even  before  the 
Civil  War.  There  can  be  no  doubt  that  the  immigrants  affected  American  life, 
and  they  in  turn  were  affected  by  American  ideals  and  ideas.  The  extent  and 
character  of  the  immigration  up  to  the  year  1860  are  given  by  the  census  authorities 
as  follows: 

One  of  the  commissioners  sent  by  the  Continental  Congress  to 
Europe,  Silas  Deane,  expressed  the  expectation  that  if  the  colonies 
established  their  independence,  the  immigration  from  the  Old  World 

1  Preliminary  Report  on  the  Eighth  Census,  1860  (Washington,  1862),  12-19, 


POPULATION  AND  LABOR  551 

would  be  prodigiously  increased;  and  as  a  consequence,  the  cultivated 
lands  would  rise  in  value,  and  new  lands  would  be  brought  into  market. 
This  anticipation  has  been  strikingly  and  abundantly  realized.  And 
in  connexion  with  the  census  of  nativities,  the  records  of  immigration 
have  a  special  importance  as  indicating  the  progressive  augmentation 
of  the  immigrants  who  have  sought  to  improve  their  fortunes  in  the 
New  World. 

From  a  survey  of  the  irregular  data  previous  to  1819,  by  Dr. 
Seybert,  Prof.  Tucker,  and  other  statists,  it  appears  that  from  1790 
to  1800,  about  50,000  Europeans,  or  "aliens,"  arrived  in  this  country; 
in  the  next  ten  years  the  foreign  arrivals  were  about  70,000,  and 
in  the  ten  years  following,  114,000,  ending  with  1820.  To  de- 
termine the  actual  settlers,  a  deduction  of  14.5  per  cent,  from  these 
numbers  should  probably  be  made  for  transient  passengers,  as  here- 
after described. 

Louisiana  was  purchased  from  France  in  1803.  The  portion  of 
this  territory  south  of  the  thirty-third  parallel,  according  to  the  his- 
torian Hildreth,  comprised  a  population  of  about  50,000,  more  than 
half  of  whom  were  slaves.  With  these  should  be  counted  about 
10,000  in  the  settlements  north  of  that  parallel,  augmented  by  a  recent 
immigration,  with  a  predominance  of  whites.  The  foreign  population 
acquired  with  the  whole  Louisiana  territory  may  thus  be  reckoned 
at  60,000;  about  one-half  or  30,000  being  whites  of  French,  Spanish, 
and  British  extraction;  and  the  other  30,000  being  slaves  and  free 
colored.  This  number  of  whites  should  evidently  be  added  to  the 
current  immigration  by  sea  already  mentioned,  in  order  to  obtain  the 
foreign  accession  to  the  white  population  of  the  United  States  during 
that  period. 

Instead  of  scattered  notices  from  shipping  lists,  the  arrival  of 
passengers  has  been  officially  recorded  at  the  custom-houses,  since 
1819,  by  act  of  Congress.  There  are  some  deficiencies  perhaps  in 
the  returns  of  the  first  ten  or  twelve  years,  but  the  subsequent  reports 
are  considered  reliable.  While  the  classified  lists  exhibit  the  whole 
number  of  foreign  passengers,  the  great  majority  of  whom  are  emi- 
grants, they  also  furnish  valuable  information  not  otherwise  obtain- 
able respecting  the  statistical  history  of  immigration. 

The  following  numbers,  registered  under  the  act  of  1819,  are 
copied  from  the  authentic  summary  of  Bromwell,  to  which  the  num- 
bers for  the  last  five  years  have  been  added  from  the  annual  reports  of 
the  State  Department,  thus  bringing  the  continuation  down  to  the 
year  of  the  present  census. 


552 


READINGS  IN  ECONOMIC  HISTORY 


Statement  of  the  number  of  Alien  passengers  arriving  in  the  United  States  by  sea  from 
foreign  countries  from  September  jo,  1819,  to  December  jj,  1860. 


Year 

Males 

Females 

Sex  not 
stated 

Total 

Year  ending  September  30, 

Quarter  ending  December  31, 
Year  ending  December  31, 

First     three     quarters    of 
Year  ending  September  30, 

Quarter  ending  December  3  1  , 
Year  ending  December  31, 

Total  

1820  

4,871 

4,651 
3,816 
3,598 
4,706 
6,917 
7,702 
11,803 
17,261 
",303 
6,439 
14,909 

34,596 
4,691 
4i,546 
38,796 
28.196 
47^865 
48,837 
23,474 
42,932 
52,883 
48,082 
62,277 
30,069 
44,431 
65,015 
87,777 
136,086 
133,906 
177,232 

196,331 
32,990 
217,181 
212,469 
207,958 
256,177 

H5,307 
115,846 
146,215 
72,824 
69,161 
88,477 

2,393 
1,636 

1,013 
848 

i,393 

2,959 
3,078 
5,939 
10,060 

S,H2 

3,i35 

7,724 
18,583 
2,512 
17,094 
22,540 
17,027 
27,553 
27,653 
13,685 
25,125 
31,132 
32,031 
41,907 
22,424 
34,184 

48;i  15 
65,742 
97,917 
92,149 
119,280 
112,635 
26,805 
162,219 
157,696 
160,615 
171,656 
85,567 
84,590 
105,091 
50,002 
51,640 
65,077 

1,121 

2,840 
2,082 
1,908 
1,813 
323 
57 
i,i33 
61 
6,105 
13,748 

8,385 
9,127 
6,911 

6,354 
7,912 
10,199 
10,837 

18,875 
27,382 
22,520 
23,322 
22,633 
53,179 
7,303 
58,640 
65,365 
45,374 
76,242 
79,340 
38,9H 
68,069 
84,066 
80,289 
104,565 
52,496 
78,615 
"4,371 
I54,4i6 
234,968 
226,527 
297,024 
310,004 
59,976 
379,4^6 
37i,6o3 
368,645 
427,833 
200,877 
200,436 
251,306 
123,126 
121,282 
153,640 

1821  

1822  

1823.  . 

1824.  . 

1821;.  . 

1826  

1827  

1828  

1820.  . 

1830.  . 

1831.  . 

l8?2.  . 

1832  

100 

1833  

1834  

4,029 

151 
824 
2,850 
i,755 

12 

51 
I76 
381 

3 

1835  

1836  

1837.  . 

1838  

l8?Q 

1840 

1841  

1842  

1843. 

1844  

184?.  . 

1,241 
897 
965 
472 
512 
1,038 
181 
66 
i,438 
72 

1846  

1847  

1848  

I  840  .  . 

18^0.  . 

1850.  . 

1851  

1852.  . 

185?.  . 

i8<?4 

iS?!; 

3 

i8<;6. 

18157.  . 

1858.  . 

300 

481 
86 

18^0 

1860  

2,977,603 

2,035,536 

49,275   (5,062414 

POPULATION  AND   LABOR 


553 


The  following  aggregates  also  exhibit  the  number  of  arrivals  of 
passengers  from  foreign  countries  during  periods  of  nearly  ten  years 
each,  and  thus  indicate  the  accelerated  progress  of  immigration: 


Periods 

Passengers  of 
Foreign  birth 

American 
and  Foreign 

In  the  10  years  ending  September  30,  1829  

128,502 

151  636 

In  the  10^  years  ending  December  31,  1839 

«8  381 

C72  7l6 

In  the  pf  years  ending  September  30,  1849. 

I  427  337 

I  47O  478 

In  the  ii  j  years  ending  December  31,  1860.  .  .  . 

2  968   194 

2    2s  s    sOI 

In  the  41  j  years  ending  December  31,  1860.  .  .  . 

>.  062.  414 

c  4CO  421 

Adjusting  the  returns  to  the  periods  of  the  decennial  census, 
by  the  aid  of  the  quarterly  reports,  we  find  very  nearly  the  follow- 
ing numbers: 


Three  census  periods 

Passengers  of 
Foreign  birth 

In  the  10  yeai 
Do...    . 

"s  previous  to  June  i,  1840   .  .  . 

552,000 
1,558,300 
2,707,624 

.    .  .  .do  1850.  .  .  . 

Do  

.    .  .  .do  1860.  .  .  . 

To  arrive  at  the  true  immigration,  these  numbers  should  be  largely 
increased  for  those  who  have  come  by  way  of  Canada.  On  the  other 
hand,  they  should  be  diminished  for  return  emigrants,  and  for  the 
merchants,  factors,  and  visitors  who  go  and  come  repeatedly,  and  are 
thus  enumerated  twice  or  more  in  the  returns. 

For  an  example  of  the  former  class,  according  to  British  registry, 
17,798  emigrants  returned  from  the  United  States  to  Great  Britain 
in  the  year  1860.  How  numerous  has  been  the  latter  class  who  have 
been  counted  twice  or  more,  is  not  definitely  known;  to  make  note 
of  these  would  constitute  a  desirable  improvement  in  the  future 
official  reports. 

The  preceding  summaries  embrace  passengers  of  foreign  birth, 
together  with  397,007  native  born  Americans,  who  were  also  regis- 
tered as  arriving  from  foreign  ports.  In  the  record  of  ages  following, 
both  classes  are  united;  but  since  the  foreigners  are  far  more  numer- 
ous, the  result  will  exhibit  very  nearly  the  relative  number  at  each 


554 


READINGS  IN  ECONOMIC  HISTORY 


age  of  the  foreign  passengers.  A  careful  reduction  of  the  whole 
number  whose  ages  were  specified,  has  just  been  completed  in  con- 
nexion with  the  census,  as  follows: 

Distribution  of  Ages  on  arrival. 


Number  of  ages  stated 
from  1820  to  1860 

Proportions 

Ages 

Males 

Females 

Total 

Males 

Females 

Total 

Under  5  

218,417 

200,676 

4.IQ.OCH 

414.'? 

3  806 

7  6AG 

5  and  under  10 

199,704 

180,606 

380,310 

3.788 

3-425 

7.213 

10  and  under  15 

194,580 

166,833 

36l,4I3 

3.691 

3.164 

6-855 

15  and  under  20 

404,338 

349,755 

75*,°93 

7.669 

6.633 

14.302 

20  and  under  25 

669,853 

428,974 

1,098,827 

12.706 

8.136 

20.842 

25  and  under  30 

576,822 

269,554 

846,376 

IO.940 

5.112 

16.052 

30  and  under  35 

352,619 

163,778 

516,397 

6.688 

3.106 

9-794 

35  and  under  40 

239,468 

114,165 

353,633 

4-542 

2.165 

6.707 

40  and  upwards. 

342,022 

200,322 

542,344 

6.487 

3-799 

10.286 

Total  

3,197,823 

2,074,663 

5.272,486 

60.654 

39-346 

IOO.OOO 

From  the  foregoing  table  it  will  be  seen  that  the  distribution  is 
materially  different  from  that  of  a  settled  population;  the  females 
are  less  than  the  males  in  the  ratio  of  two  to  three;  almost  precisely 
one-half  of  the  total  passengers  are  between  fifteen  and  thirty  years 
of  age.  It  will  further  be  noted  that  the  sexes  approach  nearest 
to  equality  in  children  and  the  youthful  ages,  as  would  naturally 
be  expected  in  the  migration  of  families;  while  from  twenty-five 
years  of  age  to  forty  the  male  passengers  are  double  the  number  of 
females.  .  .  . 

The  passengers  from  foreign  ports  arrive  at  all  seasons  of  the  year; 
the  greatest  number,  however,  make  the  passage  in  the  second  and 
third  quarters,  or  in  the  summer  months,  and  a  smaller  number  in 
the  winter  months. 

The  deaths  on  the  voyage  during  the  last  five  years  have  been 
only  about  one-sixth  of  one  per  cent. ;  the  time  of  passage  being  gen- 
erally some  thirty  days.  .  .  . 

From  the  first  of  the  two  following  tables  it  will  be  seen  that  the 
most  numerous  class  among  the  passengers  is  that  of  laborers;  the 
next  in  order  are  farmers,  mechanics,  and  merchants.  The  "seam- 
stresses and  milliners,"  and  nearly  all  of  the  "servants,"  are  females; 
the  other  female  passengers,  with  few  exceptions,  have  been  entered 


POPULATION  AND  LABOR  555 

under  the  category  of  "not  stated,"  and  comprise  about  five-sevenths 
of  that  division. 

It  will  be  proper  to  mention  that  the  ten  trades  and  professions 
marked  with  a  star  in  the  table  were  always  enumerated  during  the 
whole  period.  The  other  occupations  were  not  reported  during  the 
four  years  i856-'59,  except  that  their  aggregate  only  was  embraced 
under  the  single  title  of  "other  occupations."  But  the  omission 
could  be  roughly  supplied  by  assuming  the  number  in  each  trade 
during  the  four  years  to  be  the  same  fraction  of  the  yearly  passengers 
as  it  was  in  the  other  six  years. 

In  i856-'5Q,  the  deaths  on  the  passage  also  were  omitted  in  the 
official  total  of  passengers,  though  retained  in  all  previous  years  and 
in  1860;  for  the  sake  of  uniformity  this  temporary  omission  of  deaths 
is  restored  in  the  present  collection  of  tables,  which  have  been  veri- 
fied throughout  with  the  greatest  care. 

The  next  following  table,  stating  the  birthplace  or  "country  where 
born,"  will  form  a  valuable  supplement  to  the  decennial  census  of 
nativities.  Excepting  the  first  numeric  column,  which  commenced 
with  small  numbers  October  i,  1819,  the  remaining  columns  corre- 
spond as  nearly  with  the  census  periods  as  the  official  yearly  reports 
allow  without  interpolation. 

The  total  number  arriving  from  the  United  Kingdom  of  Great 
Britain  and  Ireland  on  our  shores  is  thus  stated  to  be  2,750,874. 
But  a  recent  statement  from  British  official  sources  gives  the  number 
emigrating  to  the  United  States  in  the  forty-six  years,  i8i5~'6o,  as 
3,048,206.  The  difference  of  the  two  returns  will  be  explained  partly 
by  those  who  emigrated  in  the  interval,  1815-19,  before  our  registry 
commenced,  being  about  55,000;  and  chiefly  by  the  more  numerous 
class  who  entered  the  United  States  by  way  of  Canada,  and  so  were 
not  included  in  our  custom-house  returns. 

In  the  same  period  of  forty-six  years  it  is  also  stated  that  1,196,521 
persons  emigrated  from  the  United  Kingdom  to  the  British  colonies 
in  North  America.  A  large  portion  of  these  are  known  to  have 
eventually  settled  in  the  United  States.  Thus  it  appears  safe  to  as- 
sume that  since  the  close  of  the  last  war  with  that  country,  in  1814, 
about  three  and  a  quarter  millions  of  the  natives  of  Great  Britain  and 
Ireland,  "a  population  for  a  kingdom,"  have  emigrated  to  this  country. 

Next  in  magnitude  is  the  migration  from  Germany,  amounting  to 
1,486,044  by  our  custom-house  returns;  the  next  is  that  from  France, 
208,063;  and  from  the  other  countries,  as  shown  in  the  table.  A 
large  share  of  the  German  emigrants  have  embarked  from  the  port 


556 


READINGS  IN  ECONOMIC  HISTORY 


Of  Havre;  others  from  Bremen,  Hamburg,  Antwerp;  many  have  also 
crossed  over  and  taken  passage  from  British  ports. 

As  our  own  people,  following  "  the  star  of  empire,"  have  migrated  to 
the  west  in  vast  numbers,  their  places  have  been  supplied  by  Euro- 
peans, which  has  modified  the  character  of  the  population,  yet  the 
great  mass  of  the  immigrants  are  found  to  cherish  true  patriotism 
for  the  land  of  their  adoption. 

Occupation  of  passengers  arriving  in  the  United  States  from  foreign  countries  during 
the  forty-one  years  ending  with  1860 


Occupation 

1820  to 
1830 

1831  to 
1840 

1841  to 

1850 

1851  to 
1860 

1820  to 
1860 

*Merchants  

10,4-  34 

41,881 

46,388 

124  IAD 

27T   8C2 

*Farmers  

I<C,OCX 

88,240 

256  880 

AOA  712 

76/1  877 

*Mechanics  

6,8o=? 

?6,?82 

1  6  A  All 

I7O  726 

*Mariners  

4,QQC 

8.OOA 

6  308 

10  087 

*Miners          

7.41 

368 

i  73? 

77  ?27 

*Laborers      .... 

IO,28o 

?3,i6o 

281,229 

?27  6lO 

8?2   7T7 

Shoemakers.  .  . 

I.IOO 

i,  066 

63 

336 

Tailors. 

083 

2,2?2 

6? 

77A 

7  67/1 

Seamstresses  and  milli- 
ners 

4.1-2 

1,672 

2  OO6 

I   O6? 

C    2A.fi 

Actors 

18? 

87 

277 

8? 

588 

Weavers  and  spinners.  . 
*Clergymen.  .  . 

2,937 

4ic 

6,6OO 
O32 

I,3°3 
I    ??O 

717 

",557 

A  726 

Clerks  

882 

I.IAl 

1,065 

7O2 

3  882 

*Lawyers  

~>\/\ 

461 

831 

I.I4O 

2  676 

*Physicians  

801; 

I.Q?Q 

2,116 

2  229 

7  IOO 

Engineers  

226 

311 

6C4 

82=; 

2  Ol6 

Artists  

I  30 

?I7 

1,22^ 

61? 

2  4OO 

Teachers  

27? 

267 

8^2 

1^4 

I  528 

Musicians  

140 

l65 

236 

188 

720 

Printers  

170 

472 

14 

4O 

7O? 

Painters  

232 

360 

8 

38 

647 

Masons  

7Q  7 

I.43C 

24. 

e8 

2  3IO 

Hatters  

137 

114 

I 

2?6 

Manufacturers  

17? 

I  O7 

1,833 

I.  CO? 

•2  ,12O 

Millers  

I  no 

1  80 

72 

2IO 

631 

Butchers  

320 

472 

76 

1  08 

04^ 

Bakers  

$83 

^60 

28 

02 

1,272 

*Servants  

1,327 

2,^71 

24..?  38 

21,058 

40,404 

Other  occupations  
Not  stated.  .  .  . 

5,466 

IOI  AA2 

4,004 

363  2?2 

2,892 

060  411 

13,844 
T    SAA   AClA 

26,206 

2  O78  ?OO 

Total  .  .    . 

176,4.73 

640  086 

I  768  17? 

2  8?4  68? 

S4?O  421 

POPULATION  AND   LABOR 

Country  where  born 


557 


Countries 

1820  to 
1830 

1831  to 
1840 

1841  to 

l850 

1851  to 
1860 

1820  to 
1860 

England  

15,837 

7,611 

32  OO2 

2A7  12^ 

302  665 

Ireland  

27,106 

29,188 

162,332 

7<l8  7AO 

067  366 

Scotland  

3,180 

2  667 

3712 

28  ^1 

A  7  800 

Wales  

I  7O 

iSc 

I,26l 

6  ^10 

7  O31? 

Great  Britain  and  Ire- 
land   

•2r  r^A 

2AT.    ZA.O 

848  366 

207  ^78 

i  425  018 

Total  United  Kingdom  . 
France  

81,827 

8,868 

283,191 

4.^    >7> 

1,047,763 
77,262 

1,338,093 

76  3=;8 

2,750,874 
2o8  063 

Spain  

2,616 

2,12=; 

2,209 

o  208 

1  6  248 

Portugal  

1  80 

829 

;;Q 

I  O^s 

2  6lA 

Belgium  

28 

22 

C.O74. 

4  738 

9  862 

Prussia  

14.6 

4.  2t;o 

I2.I4.O 

4^  887 

60  4.32 

Germany  

7,583 

14.8  2O4. 

422,477 

007  780 

I  4.86  OAA. 

Holland  

1,127 

I  4.12 

8,251 

10  780 

21   OO 

Denmark  

1  80 

1,063 

C2Q 

3  7AO 

?   ^4.0 

Norway  and  Sweden.  .  . 
Poland  

94 

21 

I,2CI 
^60 

13,903 

IOi 

20,931 
1,164 

36,129 

i  6=;o 

Russia  

80 

277 

e;i 

4.^7 

1,374 

Turkey  

21 

7 

;n 

83 

1  70 

Switzerland  

•2.2C7 

4,821 

4,644 

25,011 

37,733 

Italy  

180 

2,211 

I.5QO 

7,012 

I  I,2O2 

Greece  

20 

40 

16 

31 

116 

Sicily  

17 

3; 

79 

420 

^60 

Sardinia.  . 

32 

7 

2OI 

I   7OO 

2  O3O 

Corsica  

2 

e 

2 

o 

Malta  

I 

3C 

78 

c 

IIO 

Iceland  

IO 

IO 

Europe  

2 

CI 

473 

526 

British  America  

2,486 

13,624 

A  1,723 

^9,309 

117,142 

South  America 

C4.2 

856 

2,C7Q 

1,221 

6  2OI 

Central  America  

IO7 

4-4 

368 

4.4.0 

968 

Mexico  

4,818 

6,=CQo 

^,271 

3,078 

17,766 

West  Indies  

2.008 

I2,3OI 

13,  =528 

10,660 

40,487 

China.  . 

•3 

8 

•21; 

AI   "?Q7 

4.1  4.4.3 

East  Indies   .... 

Q 

•2Q 

36 

A^ 

127 

Persia  

7 

I  c 

22 

Asia  

3 

I 

4 

10 

27 

Liberia  

I 

8 

c 

C 

10 

Egypt  

A 

4 

Morocco  

A 

I 

c 

Algiers  

2 

2 

558 


READINGS  IN  ECONOMIC  HISTORY 

Country  where  born  —  Continued 


Countries 

1820  to 
1830 

1831  to 

1840 

1841  to 

1850 

1851  to 
1860 

1820  to 
1860 

Barbary  States  

4 

4 

Cape  of  Good  Hope.  .  .  . 

2 

2 

Africa  .  . 

IO 

rf 

4.7 

1  86 

270 

Azores  

It 

2Q 

327 

2,873 

3,242 

Canary  Islands  .... 

271 

6 

I 

8 

286 

Madeira  Islands.  . 

7O 

C2 

-i 

189 

•JI4. 

Cape  Verd  Islands.  . 

4 

1C 

•2 

7 

2Q 

Sandwich  Islands.  . 

I 

6 

28 

/\i\ 

70 

Society  Islands.  . 

I 

6 

7 

Australia 

2 

•2 

104 

109 

St.  Helena.  .           .    . 

I 

•2 

17 

17 

Isle  of  France. 

2 

I 

T. 

South  Sea  Islands..  .  . 

70 

79 

New  Zealand  

4 

4 

Not  stated  

^2,802 

60,700 

12,72:; 

25,438 

180,854 

Total  Aliens  

I<?I,824 

<CQQ,i2^ 

I,7l3,2i;i 

2,598,214 

5,062,414 

United  States  

24,649 

40,961 

54,924 

276,473 

397,007 

Total  

176,473 

640,086 

1,768,175 

2,874,687 

5,459,421 

CHAPTER   XVII 
SLAVERY  AND   THE  SOUTH,   1823-1860 

I.  THE  ECONOMICS  OF  SLAVE  LABOR 

A.   A  Philosophic  View  of  Slave  Labor,  1860  x 

Slavery  discussions  just  before  the  Civil  War  centered  largely  around  the 
question  of  the  advantages  and  disadvantages  of  slave  labor.  Those  friendly  to 
the  system  contended  that  the  employment  of  negro  slaves  in  the  south  was  not 
only  necessary  but  also  desirable.  Opponents  of  the  system  could  not  deny  that 
the  nature  of  the  southern  crops  demanded  a  large  supply  of  permanent,  unskilled, 
hand  labor,  and  that  the  negro  slave  possessed  those  characteristics,  but  they  claimed 
that  the  same  economic  ends  could  be  attained  under  free  competition,  among  both 
whites  and  blacks.  Some  writers  on  the  question  attempted  to  be  fair  in  their 
examinations,  but  even  they  oftentimes  appear  to  be  trying  to  prove  points 
rather  than  to  discover  facts.  The  large  majority,  however,  was  biased,  either  for 
or  against  slavery,  and  each  one  selected  arguments  to  suit  his  particular  needs. 
Of  those  who  attempted  to  examine  the  economics  of  slavery  from  a  purely  imper- 
sonal viewpoint,  the  English  economist,  J.  E.  Cairnes,  was  perhaps  the  best  known. 
His  views  were  as  follows: 

A  circumstance  more  influential  in  determining  the  history  of  slav- 
ery in  America  than  either  origin  or  climate  is  pointed  at  by  Tocque- 
ville  in  his  remark,  that  the  soil  of  New  England  "was  entirely  opposed 
to  a  territorial  aristocracy."  "To  bring  that  refractory  land  into 
cultivation,  the  constant  and  interested  exertions  of  the  owner  him- 
self were  necessary;  and,  when  the  ground  was  prepared,  its  produce 
was  found  to  be  insufficient  to  enrich  a  master  and  a  farmer  at  the 
same  time.  The  land  was  then  naturally  broken  up  into  small  por- 
tions which  the  proprietor  cultivated  for  himself."  Such  a  country, 
for  reasons  which  will  presently  be  more  fully  indicated,  was  entirely 
unsuited  to  cultivation  by  slave  labour;  but  what  I  wish  here  to  re- 
mark is,  that  this  fact,  important  as  it  is  with  reference  to  our  subject, 
is  yet  insufficient  in  itself  to  afford  the  solution  which  we  seek;  for, 
though  it  would  account  for  the  disappearance  of  slavery  from  the 
New  England  States,  it  fails  entirely  when  applied  to  the  country 

1  The  Slaw  Power.     By  J.  E.  Cairnes  (London  and  Cambridge,  1863),  42-52. 


560  READINGS  IN  ECONOMIC  HISTORY 

west  and  south  of  the  Hudson,  which  is  for  the  most  part  exceedingly 
fertile,  but  in  which,  nevertheless,  slavery,  though  extensively  intro- 
duced, has  not  been  able  to  maintain  itself.  To  understand,  there- 
fore, the  conditions  on  which  the  success  of  a  slave  regime  depends, 
we  must  advert  to  other  considerations  than  any  which  have  yet  been 
adduced. 

The  true  causes  of  the  phenomenon  will  appear,  if  we  reflect  on 
the  characteristic  advantages  and  disadvantages  which  attach  respec- 
tively to  slavery  and  free  labour,  as  productive  instruments,  in  con- 
nexion with  the  external  conditions  under  which  these  forms  of  in- 
dustry came  into  competition  in  North  America. 

The  economic  advantages  of  slavery  are  easily  stated:  they  are 
all  comprised  in  the  fact  that  the  employer  of  slaves  has  absolute 
power  over  his  workmen,  and  enjoys  the  disposal  of  the  whole  fruit 
of  their  labours.  Slave  labour,  therefore,  admits  of  the  most  com- 
plete organization,  that  is  to  say,  it  may  be  combined  on  an  extensive 
scale,  and  directed  by  a  controlling  mind  to  a  single  end,  and  its  cost 
can  never  rise  above  that  which  is  necessary  to  maintain  the  slave 
in  health  and  strength. 

On  the  other  hand,  the  economical  defects  of  slave  labour  are  very 

serious.     They  may  be  summed  up  under  the  three  following  heads: 

—  it  is  given  reluctantly;  it  is  unskilful;  it  is  wanting  in  versatility. 

It  is  given  reluctantly,  and  consequently  the  industry  of  the  slave 
can  only  be  depended  on  so  long  as  he  is  watched.  The  moment  the 
master's  eye  is  withdrawn,  the  slave  relaxes  his  efforts.  The  cost 
of  slave  labour  will  therefore,  in  great  measure,  depend  on  the  degree 
in  which  the  work  to  be  performed  admits  of  the  workmen  being 
employed  in  close  proximity  to  each  other.  If  the  work  be  such  that 
a  large  gang  can  be  employed  with  efficiency  within  a  small  space, 
and  be  thus  brought  under  the  eye  of  a  single  overseer,  the  expense 
of  superintendence  will  be  slight;  if,  on  the  other  hand,  the  nature  of 
the  work  requires  that  the  workmen  should  be  dispersed  over  an  ex- 
tended area,  the  number  of  overseers,  and  therefore,  the  cost  of  the 
labour  which  requires  this  supervision,  will  be  proportionately  in- 
creased. The  cost  of  slave  labour  thus  varies  directly  with  the  degree 
in  which  the  work  to  be  done  requires  dispersion  of  the  labourers,  and 
inversely  as  it  admits  of  their  concentration.  Further,  the  work  being 
performed  reluctantly,  fear  is  substituted  for  hope,  as  the  stimulus 
to  exertion.  But  fear  is  ill  calculated  to  draw  from  a  labourer 
all  the  industry  of  which  he  is  capable.  "Fear,"  says  Bentham, 
"leads  the  labourer  to  hide  his  powers,  rather  than  to  show  them; 


SLAVERY  AND  THE  SOUTH  561 

to  remain  below,  rather  than  to  surpass  himself.  ...  By  displaying 
superior  capacity,  the  slave  would  only  raise  the  measure  of  his 
ordinary  duties;  by  a  work  of  supererogation  he  would  only  prepare 
punishment  for  himself."  He  therefore  seeks,  by  concealing  his 
powers,  to  reduce  to  the  lowest  the  standard  of  requisition.  "His 
ambition  is  the  reverse  of  that  of  the  free  man;  he  seeks  to  descend 
in  the  scale  of  industry,  rather  than  to  ascend." 

Secondly,  slave  labour  is  unskilful,  and  this,  not  only  because 
the  slave,  having  no  interest  in  his  work,  has  no  inducement  to  exert 
his  higher  faculties,  but  because,  from  the  ignorance  to  which  he  is 
of  necessity  condemned,  he  is  incapable  of  doing  so.  In  the  Slave 
States  of  North  America,  the  education  of  slaves,  even  in  the  most 
rudimentary  form,  is  proscribed  by  law,  and  consequently  their 
intelligence  is  kept  uniformly  and  constantly  at  the  very  lowest  point. 
"You  can  make  a  nigger  work,"  said  an  interlocutor  in  one  of  Mr. 
Olmsted's  dialogues,  "but  you  cannot  make  him  think."  He  is 
therefore  unsuited  for  all  branches  of  industry  which  require  the 
slightest  care,  forethought,  or  dexterity.  He  cannot  be  made  to 
co-operate  with  machinery;  he  can  only  be  trusted  with  the  coarsest 
implements;  he  is  incapable  of  all  but  the  rudest  forms  of  labour. 

But  further,  slave  labour  is  eminently  defective  in  point  of  versa- 
tility. The  difficulty  of  teaching  the  slave  anything  is  so  great,  that 
the  only  chance  of  turning  his  labour  to  profit  is,  when  he  has  once 
learned  a  lesson,  to  keep  him  to  that  lesson  for  life.  Where  slaves, 
therefore,  are  employed  there  can  be  no  variety  of  production.  If 
tobacco  be  cultivated,  tobacco  becomes  the  sole  staple,  and  tobacco 
is  produced,  whatever  be  the  state  of  the  market,  and  whatever  be 
the  condition  of  the  soil.  This  peculiarity  of  slave  labour,  as  we  shall 
see,  involves  some  very  important  consequences. 

Such  being  the  character  of  slave-labour,  as  an  industrial  instru- 
ment, let  us  now  consider  the  qualities  of  the  agency  with  which, 
in  the  colonization  of  North  America,  it  was  brought  into  competition. 
This  was  the  labour  of  peasant  proprietors,  a  productive  instrument, 
in  its  merits  and  defects,  the  exact  reverse  of  that  with  which  it  was 
called  upon  to  compete.  Thus,  the  great  and  almost  the  sole  excel- 
lence of  slave  labour  is,  as  we  have  seen,  its  capacity  for  organization; 
and  this  is  precisely  the  circumstance  with  respect  to  which  the  labour 
of  peasant  proprietors  is  especially  defective.  In  a  community  of 
peasant  proprietors,  each  workman  labours  on  his  own  account,  with- 
out much  reference  to  what  his  fellow-workmen  are  doing.  There 
is  no  commanding  mind  to  whose  guidance  the  whole  labour  force 


562  READINGS  IN  ECONOMIC  HISTORY 

will  yield  obedience,  and  under  whose  control  it  may  be  directed  by 
skilful  combinations  to  the  result  which  is  desired.  Nor  does  this 
system  afford  room  for  classification  and  economical  distribution  of 
a  labour  force  in  the  same  degree  as  the  system  of  slavery.  Under 
the  latter,  for  example,  occupation  may  be  found  for  a  whole  family 
of  slaves,  according  to  the  capacity  of  each  member,  in  performing 
the  different  operations  connected  with  certain  branches  of  industry. 
Thus,  in  the  culture  of  tobacco,  the  women  and  children  may  be 
employed  in  picking  the  worms  off  the  plants,  or  gathering  the  leaves 
as  they  become  ripe,  while  the  men  are  engaged  in  the  more  laborious 
tasks.  But  it  is  otherwise  when  the  cultivator  is  a  small  proprietor. 
His  children  are  at  school,  and  his  wife  finds  enough  to  occupy  her 
in  her  domestic  duties:  he  can,  therefore,  command  for  all  operations, 
however  important  or  however  insignificant,  no  other  labour  than 
his  own,  or  that  of  his  grown-up  sons  —  labour  which  would  be  greatly 
misapplied  in  performing  such  manual  operations  as  I  have  described. 
His  team  of  horses  might  be  standing  idle  in  the  stable,  while  he  was 
gathering  tobacco  leaves  or  picking  worms,  an  arrangement  which 
would  render  his  work  exceedingly  costly.  The  system  of  peasant 
proprietorship,  therefore,  does  not  admit  of  combination  and  classi- 
fication of  labour  in  the  same  degree  as  that  of  slavery.  But  if  in 
this  respect  it  lies  under  a  disadvantage  as  compared  with  its  rival, 
in  every  other  respect  it  enjoys  an  immense  superiority.  The  peasant 
proprietor,  appropriating  the  whole  produce  of  his  toil,  needs  no  other 
stimulus  to  exertion.  Superintendence  is  here  completely  dispensed 
with.  The  labourer  is  under  the  strongest  conceivable  inducement 
to  put  forth,  in  the  furtherance  of  his  task,  the  full  powers  of  his  mind 
and  body;  and  his  mind,  instead  of  being  purposely  stinted  and  stupe- 
fied, is  enlightened  by  education,  and  aroused  by  the  prospect  of 
reward. 

Such  are  the  two  productive  agencies  which  came  into  competi- 
tion on  the  soil  of  North  America.  If  we  now  turn  to  the  external 
conditions  under  which  the  competition  took  place,  we  shall,  I  think, 
have  no  difficulty  in  understanding  the  success  of  each  respectively 
in  that  portion  of  the  Continent  in  which  it  did  in  fact  succeed. 

The  line  dividing  the  Slave  from  the  Free  States  marks  also  an 
important  division  in  the  agricultural  capabilities  of  North  America. 
North  of  this  line,  the  products  for  which  the  soil  and  climate  are 
best  adapted  are  cereal  crops,  while  south  of  it  the  prevailing  crops 
are  tobacco,  rice,  cotton,  and  sugar;  and  these  two  classes  of  crops 
are  broadly  distinguished  in  the  methods  of  culture  suitable  to  each. 


SLAVERY  AND   THE   SOUTH  563 

The  cultivation  of  the  one  class,  of  which  cotton  may  be  taken  as  the 
type,  requires  for  its  efficient  conduct  that  labour  should  be  com- 
bined and  organized  on  an  extensive  scale.  On  the  other  hand,  for 
the  raising  of  cereal  crops  this  condition  is  not  so  essential.  Even 
where  labour  is  abundant  and  that  labour  free,  the  large  capitalist 
does  not  in  this  mode  of  farming  appear  on  the  whole  to  have  any 
preponderating  advantage  over  the  small  proprietor,  who,  with  his 
family,  cultivates  his  own  farm,  as  the  example  of  the  best  cultivated 
states  in  Europe  proves.  Whatever  superiority  he  may  have  in  the 
power  of  combining  and  directing  labour  seems  to  be  compensated 
by  the  greater  energy  and  spirit  which  the  sense  of  property  gives  to 
the  exertions  of  the  small  proprietor.  But  there  is  another  essential 
circumstance  in  which  these  two  classes  of  crops  differ.  A  single 
labourer,  Mr.  Russell  tells  us,  can  cultivate  twenty  acres  of  wheat 
or  Indian  corn,  while  he  cannot  manage  more  than  two  of  tobacco, 
or  three  of  cotton.  It  appears  from  this  that  tobacco  and  cotton 
fulfil  that  condition  which  we  saw  was  essential  to  the  economical 
employment  of  slaves  —  the  possibility  of  working  large  numbers 
within  a  limited  space;  while  wheat  and  Indian  corn,  in  the  cultiva- 
tion of  which  the  labourers  are  dispersed  over  a  wide  surface,  fail 
in  this  respect.  We  thus  find  that  cotton,  and  the  class  of  crops 
of  which  cotton  may  be  taken  as  the  type,  favour  the  employment 
of  slaves  in  the  competition  with  peasant  proprietors  in  two  leading 
ways:  first,  they  need  extensive  combination  and  organization  of 
labour  —  requirements  which  slavery  is  eminently  calculated  to  sup- 
ply, but  in  respect  to  which  the  labour  of  peasant  proprietors  is  de- 
fective; and  secondly,  they  allow  of  labour  being  concentrated,  and 
thus  minimize  the  cardinal  evil  of  slave  labour  —  the  reluctance  with 
which  it  is  yielded.  On  the  other  hand,  the  cultivation  of  cereal 
crops,  in  which  extensive  combination  of  labour  is  not  important, 
and  in  which  the  operations  of  industry  are  widely  diffused,  offers 
none  of  these  advantages  for  the  employment  of  slaves,  while  it  is 
remarkably  fitted  to  bring  out  in  the  highest  degree  the  especial 
excellencies  of  the  industry  of  free  proprietors.  Owing  to  these  causes 
it  has  happened  that  slavery  has  been  maintained  in  the  Southern 
States,  which  favour  the  growth  of  tobacco,  cotton,  and  analogous 
products,  while,  in  the  Northern  States,  of  which  cereal  crops  are 
the  great  staple,  it  from  an  early  period  declined  and  has  ultimately 
died  out.  And,  in  confirmation  of  this  view,  it  may  be  added  that 
wherever  in  the  Southern  States  the  external  conditions  are  especially 
favourable  to  cereal  crops,  as  in  parts  of  Virginia,  Kentucky,  and 


564  READINGS  IN  ECONOMIC  HISTORY 

Missouri,  and  along  the  slopes  of  the  Alleghanies,  there  slavery  has 
always  failed  to  maintain  itself.  It  is  owing  to  this  cause  that  there 
now  exists  in  some  parts  of  the  South  a  considerable  element  of  free 
labouring  population. 

These  considerations  appear  to  explain  the  permanence  of  slavery 
in  one  division  of  North  America,  and  its  disappearance  from  the  other; 
but  there  are  other  conditions  essential  to  the  economic  success  of 
the  institution  besides  those  which  have  been  brought  into  view  in 
the  above  comparison,  to  which  it  is  necessary  to  advert  in  order  to 
a  right  understanding  of  its  true  basis.  These  are  high  fertility  of 
the  soil,  and  a  practically  unlimited  extent  of  it. 

The  necessity  of  these  conditions  to  slavery  will  be  apparent  by 
reflecting  on  the  unskilfulness  and  want  of  versatility  in  slave  labour 
to  which  we  have  already  referred. 

B.  Cheapness  of  Slave  Labor,  1852  1 

The  friends  of  the  system  argued  that  slave  labor  was  not  only  more  permanent 
than  free  labor,  but  also  that  it  was  cheaper.  The  following  is  typical  of  the  more 
moderate  claims  of  the  time  for  the  cheapness  of  slave  labor: 

Probably,  however,  the  greatest  advantage  we  have  over  the 
Indian  producers  is  in  the  cheapness  of  our  labor.  It  is  true  that 
wages  are  very  low  in  India,  but  the  labor  is  also  inefficient.  We 
have  the  cheapest  and  most  efficient  labor  in  the  world. 

The  African  slave  in  the  southern  states  is  well  fed  with  good 
and  substantial  food,  that  gives  him  strength,  endurance,  and  health. 
He  is  well  clad  in  winter,  and  well  lodged,  to  protect  him  from  the 
inclemencies  of  the  season.  He  is  cheerful,  able  to  work,  and  he  works 
faithfully.  As  the  whole  cost  of  this  labor  to  the  state  is  made  up  of 
the  simplest  necessaries  of  life,  the  support  of  the  young,  and  the 
old,  and  the  feeble,  it  is  evident  that  the  south  has  the  cheapest  labor 
that  is  possible.  It  was  the  doctrine  of  Malthus,  that  in  every  country 
there  is  a  constant  tendency  to  reduce  the  wages  of  labor  down  to  the 
mere  support  of  the  laborer.  That  limit,  however  approximated  to 
elsewhere,  has  never  been  reached  but  in  the  south. 

The  slave  is  supplied  with  all  he  wants  of  meal,  and  with  as  much 
meat  as  is  needed  for  his  health  and  strength.  This  meal  is  prepared 
in  many  ways,  and  makes  a  most  palatable  bread.  His  master 
generally  feeds  on  it  in  preference  to  flour.  He  has  a  garden,  where 

1  Eighty  Years'  Progress.  By  Professor  C.  F.  McCay,  of  Columbia,  South 
Carolina  (Hartford,  1869),  110-21. 


SLAVERY  AND   THE   SOUTH  565 

he  can  raise  potatoes,  cabbages,  collards,  greens,  turnips,  beans,  and 
such  other  vegetables  as  the  taste  and  industry  of  the  family  may 
desire.  He  has  clothing  —  cheap,  it  is  true,  but  warm  and  substantial. 

There  is  a  separate  dwelling  for  each  family,  and  an  unlimited 
supply  of  fuel  for  the  winter.  The  old,  who  are  unable  to  labor  in 
the  field,  find  some  slight  work  about  the  house  —  the  men  in  the 
garden,  the  women  in  the  care  of  young  children  whose  mothers  are 
out  on  the  usual  plantation  work.  .  .  . 

Another  element  of  the  cheapness  of  this  labor  is  that  nothing  is 
wasted  in  vicious  indulgences.  In  other  countries,  a  large  part  of 
the  wages  of  labor  is  expended  in  strong  drink;  but  the  most  stringent 
laws  are  everywhere  passed  against  selling  spirits  to  slaves;  the  Maine 
liquor  law  is  enforced  with  the  most  severe  penalties,  and  with  the 
utmost  certainty  of  conviction  for  the  guilty. 

Much  time  is  lost  in  free  countries  in  holidays  and  shows;  in  idle- 
ness and  neglect  of  work;  in  seeking  employment;  in  change  from 
one  place  to  another;  but  all  this  is  saved  in  the  south,  for  there  are 
no  idle  hands  about  the  plantation,  and,  excepting  the  week  between 
Christmas  and  New  Year's  day,  when  there  is  a  general  holiday, 
there  is  no  lost  time,  except  from  sickness,  in  any  part  of  the  year. 

The  children  are  all  put  at  work  at  eleven  or  twelve  years  of  age, 
as  soon  as  they  are  able  to  guide  a  plough  or  pick  cotton  in  the  fields. 
The  women  and  men  are  both  efficient  workers,  and  the  division  of 
labor  is  so  complete  that  the  children  of  many  mothers  are  watched 
over  and  cared  for  by  one,  and  the  cooking  for  many  families  attended 
to  by  a  single  cook. 

This  system  of  labor  is  thus  the  cheapest  possible.  The  corn  and 
the  meat  being,  in  most  cases,  raised  on  the  plantation,  and  not  bur- 
dened with  the  cost  of  transportation,  are  supplied  at  the  cheapest 
prices;  the  work  is  all  light  and  easy,  so  that  women  and  boys,  as 
well  as  men,  can  engage  in  it  efficiently.  Every  thing  is  arranged 
so  that  labor  is  secured  at  the  lowest  possible  rate.  .  .  . 

The  culture  of  cotton  is  specially  suited  for  slave  labor,  because 
of  its  giving  full  employment  for  the  whole  year.  January  is  devoted 
to  fitting  up  the  fences,  clearing  off  the  decayed  trees  that  have  fallen 
in  the  fields,  and  putting  in  order  the  cultivators  and  all  the  imple- 
ments of  the  farm.  The  ploughs  are  also  started,  and  some  of  the 
ground  broken  up  for  spring  planting.  February  is  the  main  time 
for  ploughing,  and  in  the  more  southern  part  of  the  cotton  country, 
corn  is  planted  in  this  month.  In  latitude  31°  the  time  for  corn  is 
the  2oth  of  February;  above  this  line  it  gradually  becomes  later. 


566  READINGS  IN  ECONOMIC  HISTORY 

About  a  month  after  the  corn,  cotton  is  planted.  In  every  locality 
it  is  desired  to  have  the  cotton  up  as  soon  as  the  fear  of  frost  is  gone. 
The  season  for  planting  begins  as  early  as  the  1 5th  of  March  in  the  most 
southern  latitudes,  is  delayed  to  the  ist  of  April  at  the  parallel  of  32°, 
to  the  1 5th  in  latitude  34°,  and  later  still  above  this  line.  As  the  seed 
are  planted  close  together  in  drills,  the  hands  pass  along  the  rows  and 
chop  down  the  weakest  and  smallest  plants,  leaving  them  in  bunches, 
fifteen  to  twenty  inches  apart.  The  ploughs  follow  or  precede  the 
hoes,  both  being  necessary  to  kill  the  grass  and  soften  the  ground 
about  the  plants.  The  hoes  follow  again,  and  thin  out  the  bunches 
to  one  or  two  stalks,  and  finally  they  are  reduced  to  one,  the  rest 
having  perished  from  the  cutworm  or  insects,  or  the  blows  of  the 
plough  and  the  hoe.  For  two  or  three  months  this  hoeing  and  plough- 
ing, to  soften  the  ground  and  destroy  the  grass,  gives  full  employment 
to  the  hands.  The  corn  has  also  to  be  treated  in  the  same  way,  and 
the  work  is  continued  on  both  until  the  summer  has  come  and  the 
fruit  begins  to  appear  on  the  cotton.  There  is  a  little  leisure  now  to 
the  hands  before  the  picking  is  begun,  and  this  gives  time  to  harvest 
the  wheat  that  has  been  sown;  to  cut  the  oats,  and  gather  the  fodder 
from  the  corn.  This  work  fills  up  the  time  until  the  picking  begins. 
At  first,  but  few  of  the  pods  are  open.  The  hands  pass  between  the 
rows  —  which  are  from  three  to  four  feet  wide  on  the  poor  lands, 
and  from  six  to  seven  on  the  richest  —  and  as  the  branches  stretch 
out  so  as  to  reach  each  other,  they  each  gather  from  two  rows  as  they 
pass  through  the  field.  By  September  the  fields  are  white  with  the 
opening  cotton,  and  every  hand,  young  and  old,  male  and  female, 
that  can  be  of  any  service,  is  busied  in  gathering  the  cotton,  lest  the 
rain  should  come  and  beat  it  out,  and  scatter  it  on  the  ground.  In 
October  this  picking  continues  undiminished.  At  the  close  of  this 
month,  frost  usually  appears,  and  stops  the  growth  of  the  plant  and 
kills  the  leaves,  but  the  pods  keep  opening,  and  new  cotton  offering 
itself  to  the  hands  until  December.  The  fields  are  picked  over  twice 
or  three  times  if  the  season  is  favorable  and  the  crop  large,  and  five 
or  six  times  if  the  opening  cotton  does  not  hurry  the  planter.  The 
gathered  cotton  has  now  to  be  sunned,  and  dried,  and  ginned,  and 
packed,  and  delivered  at  the  nearest  railway  station  or  river  landing, 
or  sold  in  the  neighboring  town.  Thus  is  the  year  completed  with 
unremitting  toil,  from  Christmas  to  Christmas. 

The  distribution  of  labor  between  the  white  and  black  races, 
so  that  the  former  shall  have  the  selection  of  the  products  and  of 
the  place  of  labor,  of  the  seeds  and  the  mode  of  cultivation,  and  of 


SLAVERY   AND   THE   SOUTH  567 

all  the  plans  and  management  of  the  plantation,  is  another  great  aid 
to  the  cheapness  and  the  efficiency  of  the  labor. 

Some  political  economists  have  supposed  that  free  is  cheaper  than 
slave  labor;  but  though  there  are  pursuits  where  the  watchfulness, 
foresight,  intelligence,  and  energy  of  a  free  man  will  make  his  labor 
so  much  more  productive  than  that  of  a  slave  as  to  pay  the  superior 
cost  of  his  support,  it  is  certain  that  the  want  of  these  qualities  in  the 
slave  is  but  a  slight  drawback  to  the  value  of  his  labor  in  the  produc- 
tion of  cotton.  The  work  is  so  regular,  and  simple,  and  easy,  that 
the  free  man  performs  it  no  better  than  the  slave,  and  as  the  direction, 
and  management,  and  skill  are  in  the  master,  the  work  is  well  directed, 
and  wisely  managed.  The  slave  works  enough,  though  he  does  not 
work  as  hard  as  some  free  men.  In  fact,  it  is  very  doubtful  if  a  free 
white  man,  impelled  by  necessity  or  the  desire  of  accumulation,  would 
be  more  efficient  in  the  cotton  field  than  the  slave.  Certain  it  is  that 
in  the  south,  where  the  hot  sun  breeds  disease,  and  the  malarious 
air  brings  fevers,  the  white  freeman  could  not  produce  as  much  as 
the  slave,  much  less  could  he  labor  as  cheaply.  His  expenditures 
being  more,  his  wife  and  children  not  working  at  all,  or  but  little, 
his  waste  of  time  and  money  in  vicious  practices  and  holidays,  would 
require  larger  wages,  and  for  these  he  has  nothing  more  to  give  than 
the  slave. 

C.  Radical  View  on  the  Efficiency  of  Slavery,  1860  l 

Of  all  the  arguments  advanced  in  support  of  the  contention  that  slavery  was 
efficient  and  economical,  none  was  more  radical  than  that  advanced  by  Mr.  Wolfe, 
of  Virginia,  in  his  reply  to  the  arguments  made  in  Helper's  Impending  Crisis.  The 
following  extract  is  illustrative  of  the  more  extreme  view  on  the  subject: 

We  will  now  consider  some  of  the  statistical  fallacies  of  Helper's 
book.  Not  only  does  this  incendiary  work  abound  with  incentives 
to  treason,  massacre,  and  bloody  revolution,  but  the  statistics  are 
fallacious,  and  evidently  prepared  for  the  purpose  of  deceiving  the 
ignorant  and  fanatical  portion  of  the  community.  The  attentive  and 
intelligent  reader,  who  will  take  the  trouble  of  examining  them  closely, 
will  easily  detect  their  fallacy.  By  way  of  showing  the  superior  pro- 
ductiveness of  the  free  States  over  the  slave  States,  he  compares  the 
value  of  their  respective  cereals,  and  gives  at  page  22  of  the  Compen- 
dium the  following  results: 

1  Helper's  Impending  Crisis  Dissected.  By  Sarnl.  M.  Wolfe  (Philadelphia, 
1860),  38-45. 


$68  READINGS  IN  ECONOMIC  HISTORY 

CEREALS 

Free  States $351,709,70.? 

Slave  States 306,927,067 

In  favor  of  the  free  States $  44,782,636 

At  page  37  the  value  of  the  other  agricultural  products  of  the 
North  and  South  are  compared  as  follows: 

OTHER  AGRICULTURAL  PRODUCTS 

Free  States $214,422,523 

Slave  States 155,223,415 

In  favor  of  the  free  States $  59,199,108 

The  aggregate  difference  between  all  the  agricultural  products  of 
the  South  and  North  thus  appear  to  be: 

TOTAL  PRODUCTS 

Free  States $566,132,226 

Slave  States 462,150,482 

In  favor  of  the  free  States $103,981,744 

Now,  the  fallacy  of  this  deduction  will  be  made  clear  by  turning 
to  a  table  at  page  71  of  the  Compendium,  in  which  the  population 
of  the  free  and  slave  States  is  compared: 

Northern  population 13,434,922 

Southern  population 9,612,979 

It  will  be  thus  seen  that  the  Northern  population  is  one  and  a 
half  that  of  the  Southern,  and  yet  it  does  not  produce  one-fifth  more. 
According  to  the  foregoing  figures  the  North  ought  to  yield,  in  order 
to  make  its  productions  equal  to  the  South,  $645,682,722,  as  any  school- 
boy can  calculate  by  the  rule  of  simple  proportion  thus: 

Southern  Northern 

Population          Population  Answer 

9,612,979      :      13,434,922     ::     $462,150,482      :      $645,684,722 

The  true  state  of  the  case,  therefore,  is: 

What  they  ought  to  produce $645,685,722 

What  the  free  States  do  produce 566,132,226 

Against  the  free  States  and  in  favor  of  slave..  .$  79,553,496 


SLAVERY  AND   THE   SOUTH  569 

Again,  if  we  take  the  proportion  of  population  to  the  square  mile, 
the  figures  will  be  still  more  in  favor  of  the  South.  According  to  one 
of  the  tables  quoted  in  Helper's  Compendium,  (at  page  71,)  the  popu- 
lation of  the  South  is  only  11.29  the  square  mile,  whereas  the  popula- 
tion of  the  North  is  21.91.  By  the  rule  of  proportion,  the  result  on 
this  basis  ought  to  be: 

Pop.  Sq.  M.     Pop.  Sq.  M.  Answer 

11.29  :         21.91  :   :        $462,150,482        :        $898,469,181 

Now  let  us  subtract  what  the  North  actually  produces  from  what 
it  ought  to  produce  on  this  basis,  as  follows: 

What  it  ought  to  produce $898,469,182 

What  it  actually  produced 566,132,226 

Against  the  free  States $332>336,956 

It  will  be  thus  seen,  according  to  Helper's  own  figures,  that  there 
is  a  balance  of  $332,336,956  against  the  free  States,  and  in  favor  of 
the  slave,  instead  of  $103,981,744  to  the  credit  of  the  Northern  States, 
as  the  dishonest  writer  pretends.  If  we  add  these  two  amounts 
together,  the  result  will  show  that  he  lies  for  abolition  to  the  trifling 
sum  of  $436,318,700  —  four  hundred  and  thirty-six  millions,  three 
hundred  and  eighteen  thousand,  seven  hundred  dollars? 

Such  is  a  specimen  of  his  statistics,  on  which  as  little  reliance  is 
to  be  placed  as  on  .his  other  facts  and  arguments  against  the  South. 
The  book  is  a  tissue  of  falsehoods  worthy  of  the  bad  cause  for  which 
it  is  written,  and  its  endorsement  is  a  disgrace  to  all  who  have  given 
it  the  sanction  of  their  names. 

The  ingenuity  of  man  never  devised  a  more  effectual  or  plausible 
mode  of  deceiving  and  misleading  the  human  understanding,  than  a 
shrewd  arrangement  of  figures.  By  this  device,  Helper  has,  by  an 
assumed  fairness  in  forming  statistical  tables,  been  able  to  render  his 
book  plausible  to  many  persons  who  are  too  apt,  in  most  matters, 
to  take  whatever  is  presented  to  their  understanding  in  the  shape  of 
figures,  as  so;  —  believing  it  to  be  a  work  of  too  much  labor  for  figures 
to  lie. 

The  analysis,  however,  of  Helper's  figures,  shows  a  studied  and 
wanton  misrepresentation  of  important  facts.  In  one  table  he 
arranges  the  respective  products  of  the  North  and  South,  and  very 
clearly,  as  he  asserts,  shows  that  white  labor  is  much  more  productive 
than  slave  labor.  It  is  due  to  the  superior  ingenuity  and  skill  of  the 
white  man  over  the  dull  and  torpid  African  to  admit  that  fact;  but 


570  READINGS  IN  ECONOMIC  HISTORY 

we  deny  that  Helper  has  honestly  shown  it;  upon  the  contrary  we 
show  that,  by  a  fair  comparison  of  the  number  of  inhabitants  to  the 
square  mile,  the  South  produces  much  more  than  the  North.  .  .  . 

The  exportable  products  of  the  fifteen  Slave  States  amount  annu- 
ally to  $270,000,000  exclusive  of  gold  and  foreign  merchandise  re- 
exported;  and  their  annual  demand  for  the  productions  of  other 
countries  is  about  $225,000,000.  There  are  80,000  cotton  planta- 
tions in  the  South,  and  the  aggregate  value  of  their  annual  products  is 
$128,000,000.  There  are  16,000  tobacco  plantations,  and  their  an- 
nual products  amount  to  $15,000,000.  There  are  2,600  sugar  plan- 
tations, the  products  of  which  average  annually  $13,000,000.  There 
are  700  rice  plantations,  which  yield  annually  a  revenue  of  $6,000,000. 
Bread-stuffs  and  provisions  yield  $78,000,000;  the  products  of  the 
forest  amount  to  $10,700,000;  manufactures  yield  $31,000,000;  and 
the  products  of  the  sea  yield  $3,356,000;  exclusive  of  $30,000,000 
we  send  to  the  North! 

These  facts  and  figures  rest  mostly  upon  the  authority  of  the 
Southern  Cultivator,  De  Bow's  Review,  and  the  speeches  in  Congress 
of  Senator  Hammond,  and  Hon.  L.  M.  Keitt,  M.  C.  of  South  Carolina. 
But  we  are  happy  to  find  them  sustained  by  the  Secretary  of  the 
Treasury,  in  a  late  Report;  and  laid  before  Congress  by  "His  Excel- 
lency President  Buchanan,"  and  by  him  endorsed. 

The  Secretary  of  the  Treasury,  in  a  late  Report,  sets  down  the 
exportation  of  domestic  produce,  exclusive  of  specie,  at  $266,438,  051. 
Of  this  amount,  cotton,  which  is  exclusively  from  the  South,  furnishes 
$128,382,351;  tobacco  gives  $12,221,843,  and  rice  yields  $2,390,233,— 
both  of  which,  also,  are  exclusively  Southern;  breadstuffs  and  pro- 
visions are  estimated  at  $77,686,455;  products  of  the  forests  at  $10,- 
694,184;  of  manufactures  at  $30,970,992;  of  the  sea  at  $3,356,797. 
Now  take  $128,382,351  for  the  value  of  cotton,  and  $12,221,843  for 
tobacco,  and  $2,390,233  for  rice,  which  are  exclusively  Southern 
staples,  and  we  have  the  sum  of  $142,994,427,  which  the  South  con- 
tributes to  the  exportations  of  the  country,  in  these  staple  products, 
which,  in  the  Union,  are  only  raised  within  her  limits.  But  her  con- 
tribution does  not  stop  here.  Of  the  $77,686,455  furnished  by  bread- 
stuffs  and  provisions,  she  contributed  at  least "$2 5, 000,000;  of  the 
products  of  the  forest,  in  the  shape  of  lumber,  etc.,  she  contributed 
about  $5,000,000,  or  one-half  of  the  exportation.  Then  $30,000,000, 
added  to  the  $142,994,427,  which  we  have  already  shown  was  fur- 
nished by  cotton,  tobacco  and  rice,  make  up  $172,994,427,  out  of 
the  $266,438,051,  to  which  the  whole  domestic  exportation  amounts. 


SLAVERY  AND   THE   SOUTH  571 

This  would  leave  $93,443,051  for  the  domestic  exportation  from  all 
the  free  States.  But  this  is  more  than  they  are  entitled  to.  Of  the 
$30,970,992  contributed  by  domestic  manufactures,  at  least 
$10,000,000  is  the  value  of  the  raw  material  not  grown  at  the  North. 
This  leaves  only  $83,442,624  as  the  contribution  of  the  free  States, 
against  $172,994,427,  as  the  contribution  of  the  Southern  or  slave 
States,  to  the  domestic  exportation  of  the  country. 

D.   Cheapness  of  Free  Labor,  1823  l 

Perhaps  a  majority  of  those  who  argued  on  the  efficiency  and  cheapness  of 
slave  and  free  labor  favored  the  latter  system.  The  friends  of  free  labor  pointed 
out  the  inherent  tendency  of  man  to  shirk  labor  when  he  had  no  direct  concern 
in  its  product,  and  naturally  they  concluded  that  the  slave  would  work  no  more  than 
was  absolutely  necessary,  and  that  as  a  result  his  output  would  be  less,  relative 
to  his  cost,  than  the  output  of  a  free  laborer.  In  some  cases  friends  of  free  labor 
even  contended  that  free  men  could  be  induced  to  labor  for  less  wages  than  slaves. 

If  slave  labour  were  cheaper  than  free  labour,  we  should  naturally 
expect  that,  in  a  state  where  slavery  was  allowed,  land,  ceteris  paribus, 
would  be  most  valuable  in  the  districts  where  that  system  prevailed; 
and  that  in  two  adjoining  states,  in  the  one  of  which  slavery  was 
allowed,  and  in  the  other  prohibited,  land  would  be  least  valuable 
in  the  latter;  but  the  contrary  is  notoriously  the  fact.  In  a  late  com- 
munication from  America  on  this  subject,  from  an  intelligent  observer, 
it  is  remarked:  "The  system  of  slave  cultivation,  as  practised  in  the 
United  States  of  America,  has  likewise  a  most  destructive  effect  on 
the  soil  of  our  country.  The  state  of  Maryland,  though  a  slave  state, 
has  comparatively  but  few  slaves  in  the  upper  or  western  part  of  it; 
the  land  in  this  upper  district  is  generally  more  broken  by  hills  and 
stones,  and  is  not  so  fertile  as  that  on  the  southern  and  eastern  parts. 
The  latter  has  also  the  advantage  of  being  situated  upon  the  navigable 
rivers  that  flow  into  the  Chesapeake  Bay,  and  its  produce  can  be 
conveyed  to  market  at  one-third  of  the  average  expense  of  that  from 
the  upper  parts  of  the  state;  yet,  with  all  these  advantages  of  soil, 
situation,  and  climate,  the  land  within  the  slave  district  will  not,  upon 
a  general  average,  sell  for  half  as  much  per  acre  as  that  in  the  upper 
districts,  which  is  cultivated  principally  by  free  men.  This  fact  may 
be  also  further  and  more  strikingly  illustrated  by  the  comparative 
value  of  land  within  the  states  of  Virginia  and  Pennsylvania,  the  one 
lying  on  the  south,  and  the  other  on  the  north  side  of  Maryland; 


1  A  Letter  to  M.  Jean-Baptiste  Say,  on  the  Comparative  Expense  of  Free  and 
Slave  Labour.     By  Adam  Hodgson  (Liverpool,  1823),  13-17,  29-30. 


572  READINGS  IN  ECONOMIC  HISTORY 

the  one  a  slave,  the  other  a  free  state.  In  Virginia,  land  of  the  same 
natural  soil  and  local  advantages,  will  not  sell  for  one-third  as  high  a 
price  as  the  same  description  of  land  will  command  in  Pennsylvania. 
This  single,  plain,  incontrovertible  fact  speaks  volumes  upon  the 
relative  value  of  slave  and  free  labor,  and  it  is  presumed  renders  any 
further  illustration  unnecessary." 

If  slave  labour  were  cheaper  than  free  labour,  we  might  fairly 
infer  that,  in  a  state  in  which  slavery  was  allowed,  free  labour  would 
be  reduced  by  competition  to  a  level  with  the  labour  of  slaves,  and 
not  slave  labour  to  a  level  with  the  labour  of  freemen;  and  that  in 
two  adjoining  states,  in  the  one  of  which  slavery  was  allowed,  and 
in  the  other  prohibited,  labour  would  be  highest,  ceteris  paribus,  in 
that  in  which  slavery  was  proscribed.  But  experience  proves  the 
reverse.  .  .  .  When  in  Norfolk,  Virginia,  in  the  winter  of  1820,  I  was 
told,  that  many  slaves  gave  their  masters  two  dollars,  or  nine  shillings 
per  week,  for  permission  to  work  for  themselves,  and  retain  the  surplus. 
I  also  found,  that  the  common  wages  of  slaves  who  are  hired,  were 
20 s.  3d.  per  week  and  their  food,  at  the  very  time  when  flour  was 
4  dollars,  or  i8s.,  per  barrel  of  196  Ibs.,  and  beef  and  mutton  3d.  to 
4d.  per  Ib.  Five  days  afterward,  in  travelling  through  the  rich  agri- 
cultural districts  of  the  free  state  of  Pennsylvania,  I  found  able 
bodied  white  men  willing  to  work  for  their  food  only.  This,  indeed, 
was  in  the  winter  months,  and  during  a  period  of  extraordinary 
pressure. 

I  was  told,  however,  that  the  average  agricultural  wages  in  this 
free  state,  were  5  or  6  dollars  per  month,  and  food;  while,  in  Norfolk, 
at  the  time  I  allude  to,  they  were  18  dollars  per  month,  and  food. 
If  it  should  be  replied,  that  in  the  town  of  Norfolk  wages  were  likely 
to  be  much  higher  than  in  the  country,  I  would  ask,  why  they  are 
not  so  in  the  principal  towns  of  Russia? 

If  slave  labour  were  cheaper  than  free  labour,  we  should  naturally 
expect  to  find  it  employed  in  the  cultivation  of  those  articles  in 
which  extended  competition  had  reduced  profits  to  the  lowest  point. 
On  the  contrary,  however,  we  find  that  slave  labour  is  gradually 
exterminated  when  brought  into  competition  with  free  labour,  ex- 
cept where  legislative  protection,  or  peculiarity  of  soil  and  climate, 
establish  such  a  monopoly  as  to  admit  of  an  expensive  system  of 
management.  The  cultivation  of  indigo  by  slaves  in  Carolina,  has 
been  abandoned,  and  the  price  of  cotton  reduced  one-half,  since 
these  articles  have  had  to  compete  in  the  European  markets  with  the 
productions  of  free  labour;  and  notwithstanding  an  additional  duty 


SLAVERY  AND  THE   SOUTH  573 

on  East  India  sugar  of  los.  per  cwt.  and  a  transportation  of  three 
times  the  distance,  the  West  India  planters  are  beyond  all  doubt 
reduced  to  very  great  distress,  and  declare  that  they  shall  be  ruined 
if  sugar  from  the  East  Indies  shall  be  admitted  on  the  same  terms 
as  from  the  West. 

If  slave  labour  were  cheaper  than  free  labour,  we  might  reason- 
ably infer,  that  in  proportion  as  the  circumstances  of  the  cultivators 
rendered  economy  indispensable,  either  from  the  difficulty  of  obtaining 
slaves,  or  other  causes,  the  peculiar  features  of  slavery  would  be  more 
firmly  established,  and  that  every  approach  to  freedom  would  be 
more  sedulously  shunned  in  the  system  of  culture.  But  it  is  found 
by  the  experience  of  both  ancient  and  modern  times,  that  nothing 
has  tended  more  to  assimilate  the  condition  of  the  slave  to  that  of 
the  free  labourer,  or  actually  to  effect  his  emancipation,  than  the 
necessity  imposed  by  circumstances  of  adopting  the  most  economical 
mode  of  cultivation.  .  .  . 

If,  then,  it  has  appeared  that  we  should  be  naturally  led  to  infer, 
from  the  very  constitution  of  human  nature,  that  slave  labour  is  more 
expensive  than  the  labour  of  freemen;  if  it  has  appeared  that  such 
has  been  the  opinion  of  the  most  eminent  philosophers  and  enlight- 
ened travellers  in  different  ages  and  countries;  if  it  has  appeared 
that  in  a  state  where  slavery  is  allowed,  land  is  most  valuable  in  those 
districts  where  the  slave  system  prevails  the  least,  notwithstanding 
great  disadvantages  of  locality;  and  that  in  adjoining  states,  with 
precisely  the  same  soil  and  climate,  in  the  one  of  which  slavery  is 
allowed,  and  in  the  other  prohibited,  land  is  most  valuable  in  that 
state  in  which  it  is  proscribed;  if  it  has  appeared  that  slave  labour 
has  never  been  able  to  maintain  its  ground  in  competition  with  free 
labour,  except  where  monopoly  has  secured  high  profits,  or  prohibitory 
duties  afforded  artificial  support;  if  it  has  appeared  that,  in  every 
quarter  of  the  globe,  in  proportion  as  the  circumstances  of  the  planter 
rendered  attention  to  economy  more  indispensable,  the  harsher  fea- 
tures of  the  slave-system  have  disappeared,  and  the  condition  of  the 
slave  has  been  gradually  assimilated  to  that  of  the  free  labourer; 
and  if  it  has  appeared  that  the  mitigation  of  slavery  has  been  found 
by  experience  to  substitute  the  alacrity  of  voluntary  labour,  for 
the  reluctance  of  compulsory  toil ;  and  that  emancipation  has  rendered 
the  estates  on  which  it  has  taken  place,  greatly  and  rapidly  more 
productive  —  I  need  not,  I  think,  adduce  additional  proofs  of  the 
truth  of  the  general  position,  that  slave  labour  is  more  expensive 
than  the  labour  of  freemen. 


574  READINGS  IN  ECONOMIC  HISTORY 

E.   Heavy  Expense  of  Slave  Labor,  1839  l 

In  any  examination  of  the  relative  cost  of  the  two  systems  of  labor,  the  price 
of  slaves  necessarily  occupied  a  prominent  place.  This  phase  of  the  subject  was 
carefully  considered  by  an  English  traveler,  Mr.  Buckingham,  as  follows: 

On  this  question,  of  the  false  economy  of  employing  slave-labour 
in  the  cultivation  of  the  land,  every  thing  I  heard  and  saw  confirmed 
me  in  the  opinion,  that  it  was  most  injurious  to  the  interests  of  the 
planters;  and  that  none  would  benefit  more  by  a  system  of  free  labour 
than  the  very  landowners  themselves.  At  present,  if  a  planter  wishes 
to  purchase  an  estate  for  cultivation,  he  can  get  1000  acres  of  land 
for  10000  dollars;  and  if  he  could  obtain  free  labour  to  till  his  fields, 
hiring  it  by  the  day,  and  paying  for  such  labour  as  he  required,  and 
no  more,  5000  dollars  would  be  ample  for  a  reserved  capital  by  which 
to  procure  his  seed,  labour,  and  stock.  But  as  he  must,  according 
to  the  present  system,  buy  his  slaves  as  well  as  his  land,  it  will  require 
at  least  500  dollars,  or  £100  sterling,  for  each  working  negro  that  he 
may  need;  and  supposing  only  100  negroes  to  be  purchased,  this 
would  require  £0,000  dollars  to  be  laid  out  in  the  purchase  of  pro- 
spective labour,  paying  for  it  before  he  receives  the  slightest  benefit, 
and  under  all  the  risks  of  sickness,  desertion,  and  death.  In  this 
manner,  according  to  the  statement  of  Mr.  Clay,  in  his  recent  Anti- 
abolition  speech  in  Congress,  there  is  locked  up,  of  dead  capital,  in 
the  purchase  and  cost  of  the  negro  slaves  of  the  United  States,  the 
enormous  sum  of  twelve  hundred  millions  of  dollars,  or  about  two 
hundred  and  fifty  millions  sterling!  Now,  if  slavery  had  never  been 
permitted  to  exist  here,  and  labour  could  have  been  hired  by  the 
day,  or  week,  or  year,  as  in  other  free  countries,  this  enormous  amount 
of  capital  would  have  been  available  to  devote  to  other  purposes; 
and  the  whole  country  would  have  been  advanced  at  least  a  century 
beyond  its  present  condition. 

It  may  be  quite  true  that  the  African  race  can  alone  sustain  the 
exposure  to  heat  and  labour  combined,  which  the  cultivation  of  rice, 
sugar,  and  cotton,  demand;  but  it  is  at  the  same  time  as  true,  that 
their  labour  might  be  hired  and  paid  for  only  as  it  was  employed, 
instead  of  the  ruinously  improvident  system  of  buying  up  all  the  labour 
of  their  lives,  and  paying  for  it  beforehand;  thus  sinking  an  immense 
capital  in  the  very  country  where  capital  is  more  valuable,  because 
more  productive  of  wealth,  than  in  any  other  country  that  can  be 

1  The  Slave  Slates  of  America.  By  J.  S.  Buckingham  (London  [1842]),  I,  200-3, 
401-2. 


SLAVERY  AND   THE   SOUTH  575 

named.  If  a  large  manufacturer  in  England,  when  he  had  built  his 
mill  and  fitted  his  machinery,  were  required  to  buy  all  his  working 
hands  at  £100  each,  and  then  maintain  them  all  their  lives,  sick  or 
well,  aged  or  infirm,  with  the  risk  of  loss  by  desertion  or  death,  he 
would  be  less  able  to  work  his  mill  with  £100,000  than  he  now  is  with 
£20,000;  and  consequently  not  half  or  a  fourth  of  the  mills  now  in 
operation  could  be  established.  If  a  shipowner,  when  he  had  built, 
equipped,  and  provisioned  his  ship  for  her  voyage,  had  to  buy  up  all 
his  seamen  at  £100  a  head,  and  maintain  them  all  their  lives  after- 
wards, it  would  require  four  times  the  capital  that  is  now  necessary 
to  send  a  large  ship  to  sea,  and  consequently  fewer  persons  could 
equip  vessels.  Thus  the  manufacturing  and  the  shipping  interests 
would  both  be  retarded  in  their  progress  by  this  improvident  and 
heavy  burden  of  paying  for  a  life  of  labour  in  advance,  instead 
of  paying  for  it  by  the  week  or  the  month,  as  its  benefits  were 
reaped  by  them. 

Exactly  the  same  effects  are  produced  in  retarding  the  prosperity 
of  agriculture;  and  thus  it  is  that  the  old  slave-states  of  Virginia  and 
Maryland  are  already  exhausted.  The  Carolinas  and  Georgia  are  al- 
ready partially  so;  and  in  process  of  time  this  will  be  the  fate  of  Ala- 
bama, Mississippi,  Kentucky,  and  the  other  slave-states;  while  those 
who  employ  the  cheaper,  more  vigorous,  and  more  productive  element 
of  free  labour,  will  outstrip  them  in  the  race,  from  the  mere  advantage 
of  a  better  system  of  industry.  While  I  believe,  therefore,  that  the 
condition  of  the  slaves  would  be  much  improved  by  their  being 
placed  under  the  influence  of  those  higher  and  better  motives  to 
labour  which  the  enjoyment  of  the  reward  of  their  toil  can  alone 
create,  I  also  believe  that  the  planters  would  all  benefit  by  the  sub- 
stitution of  free-labour  for  slave-labour,  because  the  former  is  cheaper 
and  more  productive  than  the  latter  can  ever  be  made.  The  slave- 
owners are  indeed  their  own  enemies,  in  opposing  or  retarding  the 
emancipation  of  their  labourers.  .  .  . 

In  the  course  of  the  protracted  conversation  to  which  these  topics 
led,  a  gentleman  from  Kentucky,  engaged  in  the  growing  of  corn 
and  grazing  of  cattle,  himself  a  slaveholder  to  a  considerable  extent, 
and  joining  in  all  the  denunciations  of  the  Abolitionists,  undertook 
to  show,  that  after  all,  slavery  was  a  much  greater  curse  to  the  owners 
than  it  was  to  the  slaves,  as  it  absorbed  their  capital,  ate  up  their 
profits,  and  proved  a  perpetual  obstacle  to  their  progressive  prosperity. 
He  said  he  had  not  only  made  the  calculation,  but  actually  tried  the 
experiment  of  comparing  the  labour  of  the  free  white  man  and  the 


576  READINGS  IN  ECONOMIC  HISTORY 

negro  slave;  and  he  found  the  latter  always  the  dearest  of  the  two. 
It  took,  for  instance,  2000  dollars  to  purchase  a  good  male  slave. 
The  interest  of  money  in  Kentucky  being  ten  per  cent,  here  was 
200  dollars  a  year  of  actual  cost;  but  to  insure  his  life  it  would  require 
at  least  five  per  cent  more,  which  would  make  300  dollars  a  year.  Add 
to  this  the  necessary  expenses  of  maintenance  while  healthy,  and 
medical  attendance  while  sick,  with  wages  of  white  overseers  to  every 
gang  of  men  to  see  that  they  do  their  duty,  and  other  incidental 
charges,  and  he  did  not  think  that  a  slave  could  cost  less,  in  interest, 
insurance,  subsistence,  and  watching,  than  500  dollars  or  ioo£  sterling 
a  year;  yet,  after  all,  he  would  not  do  more  than  half  the  work  of  a 
white  man,  who  could  be  hired  at  the  same  sum,  without  the  outlay  of 
any  capital,  or  the  incumbrance  of  maintenance  while  sick,  and  was, 
therefore,  by  far  the  cheapest  labourer  of  the  two. 

F.   Radical  View  on  the  Inefficiency  of  Slave  Labor,  1860  l 

Not  all  the  radical  arguments  were  advanced  by  the  friends  of  slavery.  Those 
opposed  to  the  system  were  oftentimes  biased  and  intolerant,  and  even  unfair. 
Perhaps  the  best  known  of  the  radical  opponents  of  slavery  was  Mr.  Helper  of 
North  Carolina,  who  pictured  the  evil  effects  of  slavery  on  the  south  as  follows: 

It  is  a  fact  well  known  to  every  intelligent  Southerner  that  we 
are  compelled  to  go  to  the  North  for  almost  every  article  of  utility 
and  adornment,  from  matches,  shoepegs  and  paintings  up  to  cotton- 
mills,  steamships  and  statuary;  that  we  have  no  foreign  trade,  no 
princely  merchants,  nor  respectable  artists;  that,  in  comparison  with 
the  free  states,  we  contribute  nothing  to  the  literature,  polite  arts 
and  inventions  of  the  age;  that,  for  want  of  profitable  employment 
at  home,  large  numbers  of  our  native  population  find  themselves 
necessitated  to  emigrate  to  the  West,  whilst  the  free  states  retain  not 
only  the  larger  proportion  of  those  born  within  their  own  limits,  but 
induce,  annually,  hundreds  of  thousands  of  foreigners  to  settle  and 
remain  amongst  them;  that  almost  everything  produced  at  the 
North  meets  with  ready  sale,  while,  at  the  same  time,  there  is  no 
demand,  even  among  our  own  citizens,  for  the  productions  of  Southern 
industry;  that,  owing  to  the  absence  of  a  proper  system  of  business 
amongst  us,  the  North  becomes,  in  one  way  or  another,  the  proprietor 
and  dispenser  of  all  our  floating  wealth,  and  that  we  are  dependent 
on  Northern  capitalists  for  the  means  necessary  to  build  our  railroads, 
canals  and  other  public  improvements;  that  if  we  want  to  visit  a 

1  The  Impending  Crisis.     By  Hinton  R.  Helper  (New  York,  1860),  21-4. 


SLAVERY  AND   THE   SOUTH  577 

foreign  country,  even  though  it  may  lie  directly  South  of  us,  we  find 
no  convenient  way  of  getting  there  except  by  taking  passage  through 
a  Northern  port;  and  that  nearly  all  the  profits  arising  from  the 
exchange  of  commodities,  from  insurance  and  shipping  offices,  and 
from  the  thousand  and  one  industrial  pursuits  of  the  country,  accrue 
to  the  North,  and  are  there  invested  in  the  erection  of  those  mag- 
nificent cities  and  stupendous  works  of  art  which  dazzle  the  eyes  of 
the  South,  and  attest  the  superiority  of  free  institutions! 

The  North  is  the  Mecca  of  our  merchants,  and  to  it  they  must 
and  do  make  two  pilgrimages  per  annum  —  one  in  the  spring  and  one 
in  the  fall.  All  our  commercial,  mechanical,  manufactural,  and 
literary  supplies  come  from  there.  We  want  Bibles,  brooms,  buckets 
and  books,  and  we  go  to  the  North;  we  want  pens,  ink,  paper,  wafers 
and  envelopes,  and  we  go  to  the  North;  we  want  shoes,  hats,  handker- 
chiefs, umbrellas  and  pocket  knives,  and  we  go  to  the  North;  we  want 
furniture,  crockery,  glassware  and  pianos,  and  we  go  to  the  North; 
we  want  toys,  primers,  school  books,  fashionable  apparel,  machinery, 
medicines,  tomb-stones,  and  a  thousand  other  things,  and  we  go  to 
the  North  for  them  all.  Instead  of  keeping  our  money  in  circulation 
at  home,  by  patronizing  our  own  mechanics,  manufacturers,  and 
laborers,  we  send  it  all  away  to  the  North,  and  there  it  remains; 
it  never  falls  into  our  hands  again. 

In  one  way  or  another  we  are  more  or  less  subservient  to  the  North 
every  day  of  our  lives.  In  infancy  we  are  swaddled  in  Northern 
muslin;  in  childhood  we  are  humored  with  Northern  gewgaws;  in 
youth  we  are  instructed  out  of  Northern  books;  at  the  age  of  maturity 
we  sow  our  "wild  oats"  on  Northern  soil;  in  middle-life  we  exhaust 
our  wealth,  energies  and  talents  in  the  dishonorable  vocation  of 
entailing  our  dependence  on  our  children  and  on  our  children's  chil- 
dren, and,  to  the  neglect  of  our  own  interests  and  the  interests  of 
those  around  us,  in  giving  aid  and  succor  to  every  department  of 
Northern  power;  in  the  decline  of  life  we  remedy  our  eye-sight  with 
Northern  spectacles,  and  support  our  infirmities  with  Northern 
canes;  in  old  age  we  are  drugged  with  Northern  physic;  and, 
finally,  when  we  die,  our  inanimate  bodies,  shrouded  in  Northern 
cambric,  are  stretched  upon  the  bier,  borne  to  the  grave  in  a  Northern 
carriage,  entombed  with  a  Northern  spade,  and  memorized  with  a 
Northern  slab! 

But  it  can  hardly  be  necessary  to  say  more  in  illustration  of  this 
unmanly  and  unnational  dependence,  which  is  so  glaring  that  it  can- 
not fail  to  be  apparent  to  even  the  most  careless  and  superficial  ob- 


578  READINGS  IN  ECONOMIC  HISTORY 

server.  All  the  world  sees,  or  ought  to  see,  that  in  a  commercial, 
mechanical,  manufactural,  financial,  and  literary  point  of  view,  we  are 
as  helpless  as  babes;  that,  in  comparison  with  the  Free  States,  our 
agricultural  resources  have  been  greatly  exaggerated,  misunderstood 
and  mismanaged;  and  that,  instead  of  cultivating  among  ourselves 
a  wise  policy  of  mutual  assistance  and  co-operation  with  respect  to 
individuals,  and  of  self-reliance  with  respect  to  the  South  at  large, 
instead  of  giving  countenance  and  encouragement  to  the  industrial 
enterprises  projected  in  our  midst,  and  instead  of  building  up,  aggran- 
dizing and  beautifying  our  own  States,  cities  and  towns,  we  have  been 
spending  our  substance  at  the  North  and  are  daily  augmenting  and 
strengthening  the  very  power  which  now  has  us  so  completely  under 
its  thumb.  .  .  . 

II.   SOUTHERN  AGRICULTURE 

An  Unfavorable  View,  1860  1 

The  way  in  which  agriculture  was  carried  on  in  all  parts  of  the  country  robbed 
the  soil  of  much  of  its  fertility;  but  it  was  more  especially  in  the  south,  where  the 
heavy  crops  of  cotton,  tobacco  and  sugar  cane  were  grown,  that  the  "mining"  of 
the  soil  progressed  most  rapidly.  An  authority  on  southern  agriculture  called 
attention  in  1860  to  the  defective  system  of  agriculture  in  that  section  as  follows: 

In  no  part  of  Christendom,  enjoying  a  good  government,  and 
settled  by  an  intelligent  population,  does  land  sell  at  so  contempt- 
ible a  price  as  in  the  Plantation  States.  In  Georgia,  for  instance, 
land  does  not  command  an  average  price  of  five  dollars  per  acre.  Vari- 
ous causes  have  been  assigned  for  this  low  value.  It  will  be  instructive 
to  examine  them. 

The  reason  generally  assigned  at  the  South  is  the  proximity  of 
an  abundance  of  cheap  fertile  lands  at  the  West.  If  this  be  a  sound 
reason  at  the  South,  it  should  also  be  true  at  the  North,  as  it  is  as 
easy  to  reach  new  lands  from  New  York  as  it  is  from  Georgia.  But 
land  is  steadily  rising  in  value  in  New  York  and  other  northern  States. 
The  proximity  of  new  lands  cannot,  therefore,  be  the  cause  of  the 
low  price  of  land  at  the  South,  as  it  does  not  produce  this  result  at 
the  North. 

It  is  said,  again,  that  the  supply  of  land  is  greater  than  the  demand, 
in  consequence  of  the  sparseness  of  our  population;  capital  seeks  its 

1  Report  of  the  Commissioner  of  Patents  for  the  Year  1860.  Agriculture 
(Washington,  1861),  225-7.  Article  by  Rev.  C.  W.  Howard,  Associate  Editor  of 
the  Southern  Cultivator,  Kingston,  Georgia. 


SLAVERY  AND  THE  SOUTH  579 

most  profitable  investment.  There  is  money  enough  in  the  Southern 
States  to  have  given  a  much  higher  value  to  our  land.  But  the 
truth  is  that  prudent  men  have  found  that,  under  our  present  system, 
land  will  not  pay  an  interest  on  more  than  its  present  price.  Hence 
this  capital,  instead  of  being  invested  in  land,  is  appropriated  to  the 
building  of  railroads,  factories,  &c.  It  will  also  be  found  that  in  the 
Southern  States  where  the  white  population  is  least  dense  the  lands 
are  highest  in  price,  and  the  reverse. 

Many  persons  suppose  that  it  is  the  form  of  labor  prevalent  at 
the  South  which  diminishes  the  value  of  Southern  lands.  This 
supposition  is  worthy  of  a  brief  consideration. 

The  remarks  made  upon  it  will  not  touch  the  moral  or  political 
aspect  of  Negro  Slavery;  it  will  be  considered  merely  as  a  matter  of 
agricultural  interest. 

If  Negro  Slavery  diminishes  the  value  of  Southern  lands,  it  must 
produce  this  result  in  some  one  of  the  following  forms. 

Before  noticing  these  forms  it  may  be  proper  to  make  the  general 
remark  that  at  the  South  where  the  negroes  are  the  most  numerous 
the  lands  bear  the  highest  price,  as  the  rice,  Sea  Island  cotton,  and 
sugar-cane  lands.  Some  of  our  best  rice  lands  now  command  from 
two  hundred  to  three  hundred  dollars  an  acre.  The  reason  of  this 
high  price  will  be  given  hereafter. 

Does  slave  labor  affect  injuriously  the  value  of  Southern  lands 
from  its  want  of  constancy?  It  is  the  most  constant  form  of  labor. 
The  negro  has  no  court-house,  no  jury,  no  musters,  no  mill  to  attend. 
He  has  no  provision  to  buy,  and  no  anxiety  or  loss  of  time  on  this 
account;  food  for  himself  and  family  is  provided.  If  his  family  are 
sick,  careful  nurses  are  provided  for  them.  The  details  of  cotton 
and  rice  culture  could  not  be  conducted  with  a  form  of  labor  less 
constant. 

Is  there  a  deficiency  of  vigor  in  slave  labor?  In  all  forms  of  out- 
of-door  bodily  and  severe  labor,  to  be  continued  for  a  length  of  time, 
the  well-fed  negro  is  more  capable  than  the  white  man.  The  regular 
and  almost  universal  allowance  of  food  upon  plantations  shows  that, 
as  a  general  rule,  the  negroes  have  a  sufficiency  of  hearty  and  nutri- 
tious food. 

Is  there  a  deficiency  of  intelligence  in  Slave  labor?  There  is  less 
intelligence  than  among  white  laborers  at  the  North,  in  Scotland,  and 
some  parts  of  England;  but  not  less  intelligence  than  exists  among 
the  mass  of  French,  Irish,  and  Belgian  laborers.  Yet  land  rates  as 
high  in  Belgium  as  in  any  other  part  of  Europe.  The  cultivation 


580  READINGS  IN  ECONOMIC  HISTORY 

is  also  as  perfect  as  can  be  found  elsewhere.  It  is  not  so  much  the 
intelligence  of  the  laborers  as  of  the  controlling  and  directing  mind, 
which  is  of  the  greatest  moment  in  agriculture. 

Is  there  a  deficiency  of  economy  in  slave  labor?  The  entire  ex- 
pense of  a  negro  laborer  on  a  plantation  cannot  be  put  down  at  more 
than  fifty  cents  a  day.  Can  any  other  labor  in  this  country  be  ob- 
tained as  cheaply  as  this?  Beyond  this,  multitudes  of  men  have 
largely  increased  their  fortunes  by  the  natural  increase  of  their  labor- 
ing force. 

If  there  be  no  deficiency  in  the  constancy,  vigor,  intelligence,  or 
economy  of  slave  labor,  it  cannot  be  supposed,  with  justice,  to  affect 
the  value  unfavorably  of  Southern  land. 

In  the  present  excited  state  of  the  public  mind  it  is  proper  to  re- 
peat the  remark  that  this  brief  inquiry  is  made,  not  with  a  view  to 
exciting  discussion  of  a  vexed  topic,  but  solely  of  arriving  at  the  true 
cause  of  the  low  price  of  Southern  land,  and  of  suggesting  a  remedy. 
This  inquiry  could  not  be  conducted  without  an  examination  of  the 
character  of  the  labor  employed  upon  the  land. 

Does  the  Southern  climate  affect  injuriously  the  price  of  Southern 
lands?  It  does  not;  because  the  lands  are  of  the  greatest  value 
(greater  than  anywhere  else  in  the  Union)  in  those  parts  of  the  South 
which  are  not  sickly,  as  the  rice  lands.  As  a  general  remark,  the 
climate  of  the  middle  belt  of  the  Southern  States,  including  rolling 
oak  and  hickory  lands,  very  closely  resembles  the  climate  of  France, 
which  is  considered  to  be  the  best  climate  of  Europe  for  agricultural 
purposes.  In  most  of  this  region  there  are  but  few  days  in  winter 
in  which  the  plough  need  be  stopped  on  account  of  the  frozen  state 
of  the  earth. 

Is  there  a  deficiency  in  the  natural  fertility  of  the  Southern  soil? 
No  one  will  pretend  to  say  that  the  original  fertility  of  the  great 
body  of  the  Southern  States  was  inferior  to  that  of  the  Middle  and 
Northern  States,  where  land  has  attained  a  great  comparative 
value. 

Is  there  a  deficiency  in  the  salable  value  of  Southern  products  of 
the  soil?  These  products  generally  command  a  better  price  at  the 
South  than  the  North.  The  most  valuable  products  of  the  South, 
cotton  and  rice,  are  peculiar  to  it. 

If  the  low  value  of  landed  estate  at  the  South  is  to  be  attributed 
neither  to  the  proximity  of  cheap  Western  lands,  to  slave  labor,  to 
defective  climate,  to  sparseness  of  population,  or  deficiency  in  the 
value  of  its  products,  to  what  is  this  low  value  attributable? 


SLAVERY  AND   THE   SOUTH  581 

The  answer  is,  to  the  Defective  System  of  Southern  Agriculture. 
That  system  is  defective,  among  others,  in  the  following  particulars: 

i  st.  This  system  is  such  that  the  planter  scarcely  considers  his 
land  as  a  part  of  his  permanent  investment.  It  is  rather  a  part  of 
his  current  expenses.  He  buys  a  wagon  and  uses^  it  until  it  is  worn 
out,  and  then  throws  it  away.  He  buys  a  plough  or  hoe,  and  treats 
both  in  the  same  way.  He  buys  land,  uses  it  until  it  is  exhausted, 
and  then  sells  it,  as  he  sells  scrap  iron,  for  whatever  it  will  bring. 
It  is  with  him  a  perishable  or  movable  property.  It  is  something  to 
be  worn  out,  not  improved.  The  period  of  its  endurance  is  therefore 
estimated  in  the  original  purchase,  and  the  price  is  regulated  accord- 
ingly. If  it  be  very  rich  level  land,  that  will  last  a  number  of  years, 
the  purchaser  will  pay  a  fair  price  for  it.  But  if  it  be  rolling  land,  as 
is  the  great  bulk  of  the  interior  of  the  Southern  States,  he  considers 
how  much  of  the  tract  is  washed  or  worn  out,  how  long  the  fresh  land 
will  last,  how  much  is  too  broken  for  cultivation,  and  in  view  of  these 
points  determines  the  value  of  the  property.  Of  course  he  places  a 
low  estimate  upon  it. 

sd.  The  system  of  Southern  agriculture  is  such  that  a  very  large 
proportion  of  the  landed  estate  yields  no  annual  income.  A  consider- 
able amount  is  in  woodland,  yielding  nothing  but  a  supply  of  rails 
and  fuel.  This  is  to  a  great  degree  dead  capital.  A  large  number  of 
acres  on  almost  every  farm  in  the  older  parts  of  the  cotton  States 
is  worn  out  and  at  rest  —  of  course  paying  no  interest.  The  only 
paying  part  of  the  tract  is  that  which  is  under  the  plough.  The  in- 
terest on  the  land  which  the  planter  does  not  cultivate  must  be  charged 
to  that  which  he  does  cultivate,  and  this  brings  down  the  value  of 
the  whole  property  to  a  very  low  figure. 

3d.  The  Southern  system  of  agriculture  allows  to  land  no  value 
independent  of  the  labor  put  upon  it.  The  negro  is  the  investment 
rather  than  the  land.  The  value  of  the  negro  is  instantly  affected 
by  a  change  in  the  price  of  cotton,  while  the  value  of  the  land  which 
grows  the  cotton  is  comparatively  unaffected.  It  is  an  extraordinary 
anomaly  that  perishable  labor  should  take  precedence  of  imperishable 
land.  It  is  not  uncommon  to  hear  young  men  at  the  South  giving 
it  as  a  reason  for  their  entering  a  profession,  that  while  they  owned 
a  large  body  of  land  they  owned  but  twenty  or  thirty  negroes,  and 
that  it  would  be  impossible  to  make  a  support  with  so  small  a  force. 
When  asked  how  the  rest  of  the  world  managed  who  have  no  negroes, 
the  reply  is  "our  system  differs  from  theirs,  ours  requires  a  large 
amount  of  labor." 


582  READINGS  IN  ECONOMIC  HISTORY 

Precisely,  and  therein  it  is  defective,  and  until  that  defect  be  reme- 
died, land  will  continue  to  be  comparatively  a  drug  in  the  market. 
It  is  the  design  of  this  Essay  to  show  that  it  is  possible  to  give  land 
a  value  independent  of  any  costly  or  complicated  annual  labor  be- 
stowed upon  it. 

4th.  The  Southern  system  of  agriculture  includes  a  succession  of 
crops  of  a  most  exhausting  or  otherwise  injurious  character.  These 
crops  are  cotton  and  corn,  varied  only  by  small  grain.  This  succession 
is  continued  until  the  land  is  worn  out  and  turned  out  to  rest. 

5th.  These  crops  are  not  only  exhausting  and  hurtful  in  conse- 
quence of  the  clean  culture  they  require,  but  they  also  require  an 
amount  of  labor  not  known  elsewhere.  If  we  consider  the  amount 
of  productive  land,  that  is,  the  number  of  acres  yielding  an  annual 
income,  we  shall  find  the  amount  of  labor  used  on  an  ordinary  South- 
ern plantation  to  be  greater  per  productive  acre  than  the  amount  of 
labor  use  in  the  most  perfectly  cultivated  portions  of  Europe.  In 
the  latter  every  acre  produces  something,  whether  in  pasture,  meadow, 
or  cultivated  crops.  At  the  South  nothing  but  the  cotton  or  grain 
pays.  The  rest  of  the  plantation  is  idle. 

III.  PLANTATION  MANAGEMENT 

A.   Instructions  of  a  Mississippi  Planter  to  his  Overseer,  1857  l 

Many  of  the  planters  laid  down  definite  rules  for  the  management  of  their 
plantations  and  took  care  to  see  that  their  overseers  faithfully  carried  out  these 
rules  as  far  as  possible.  The  following  instructions  show  the  management  of  the 
slaves  on  a  Mississippi  plantation: 

State  of  Mississippi,  Coahoma  County,  near  Friars  Point,  A.  D. 

1857- 

The  health,  happiness,  good  discipline  and  obedience;  good,  suf- 
ficient and  comfortable  clothing,  a  sufficiency  of  good  wholesome  and 
nutritious  food  for  both  man  and  beast  being  indispensably  necessary 
to  successful  planting,  as  well  as  for  reasonable  dividends  for  the 
amount  of  capital  invested,  without  saying  anything  about  the  Mas- 
ter's duty  to  his  dependants,  to  himself  and  his  God  —  I  do  hereby 
establish  the  following  rules  and  regulations  for  the  management 
of  my  Prairie  Plantation,  and  require  an  observance  of  the  same  by 

1  Documentary  History  of  American  Industrial  Society.  Edited  by  Ulrich  B. 
Phillips  and  others  (Cleveland,  1910),  I,  112-5.  Printed  by  permission  of  the 
publishers,  The  Arthur  H.  Clark  Company. 


SLAVERY   AND   THE   SOUTH  583 

any  and  all  Overseers  I  may  at  any  time  have  in  charge  thereof  to 
wit:  — 

Punishment  must  never  be  cruel  or  abusive,  for  it  is  absolutely 
mean  and  unmanly  to  whip  a  negro  from  mere  passion  or  malice, 
and  any  man  who  can  do  this  is  entirely  unworthy  and  unfit  to  have 
control  of  either  man  or  beast. 

My  negroes  are  permitted  to  come  to  me  with  their  complaints 
and  grievances  and  in  no  instance  shall  they  be  punished  for  so  doing. 
On  examination,  should  I  find  they  have  been  cruelly  treated,  it  shall 
be  considered  a  good  and  sufficient  cause  for  the  immediate  discharge 
of  the  Overseer. 

Prove  and  show  by  your  conduct  towards  the  negroes  that  you 
feel  a  kind  and  considerate  regard  for  them.  Never  cruelly  punish 
or  overwork  them,  never  require  them  to  do  what  they  cannot  reason- 
ably accomplish  or  otherwise  abuse  them,  but  seek  to  render  their 
situation  as  comfortable  and  contented  as  possible. 

See  that  their  necessities  are  supplied,  that  their  food  and  clothing 
be  good  and  sufficient,  their  houses  comfortable;  and  be  kind  and 
attentive  to  them  in  sickness  and  old  age. 

See  that  the  negroes  are  regularly  fed  and  that  their  food  be  whole- 
some, nutritious  and  well  cooked. 

See  that  they  keep  themselves  well  cleaned:  at  least  once  a  week 
(especially  during  summer)  inspect  their  houses  and  see  that  they 
have  been  swept  clean,  examine  their  bedding  and  see  that  they  are 
occasionally  well  aired;  their  clothes  mended  and  everything  attended 
to  that  conduces  to  their  health,  comfort  and  happiness. 

If  any  of  the  negroes  have  been  reported  sick,  be  prompt  to  see 
what  ails  them  and  that  proper  medicine  and  attention  be  given 
them.  Use  good  judgment  and  discretion  in  turning  out  those  who 
are  getting  well. 

I  greatly  desire  that  the  Gospel  be  preached  to  the  Negroes  when 
the  services  of  a  suitable  person  can  be  procured.  This  should  be 
done  on  the  Sabbath;  day  time  is  preferable,  if  convenient  to  the 
Minister. 

Christianity,  humanity  and  order  elevate  all  —  injure  none — 
whilst  infidelity,  selfishness  and  disorder  curse  some  —  delude  others 
and  degrade  all.  I  therefore  want  all  of  my  people  encouraged  to 
cultivate  religious  feeling  and  morality,  and  punished  for  inhumanity 
to  their  children  or  stock  —  for  profanity,  lying  and  stealing. 

All  hands  should  be  required  to  retire  to  rest  and  sleep  at  a  suitable 
hour  and  permitted  to  remain  there  until  such  time  as  it  will  be  neces- 


584  READINGS  IN  ECONOMIC  HISTORY 

sary  to  get  out  in  time  to  reach  their  work  by  the  time  they  can  see 
well  how  to  work  —  particularly  so  when  the  nights  are  short  and  the 
mornings  very  cold  and  inclement. 

Allow  such  as  may  desire  it  a  suitable  piece  of  ground  to  raise 
potatoes,  tobacco.  They  may  raise  chickens  also  with  privileges  of 
marketing  the  same  at  suitable  leisure  times. 

There  being  a  sufficient  number  of  negroes  on  the  plantation  for 
society  among  themselves,  they  are  not  to  be  allowed  to  go  off  the 
plantation  merely  to  seek  society,  nor  on  business  without  a  permit 
from  myself  or  the  Overseer  in  charge  —  nor  are  other  negroes  allowed 
to  visit  the  plantation. 

After  taking  proper  care  of  the  negroes,  stock,  etc.  the  next  most 
important  duty  of  the  Overseer  is  to  make  (if  practicable)  a  sufficient 
quantity  of  corn,  hay,  fodder,  meat,  potatoes  and  other  vegetables 
for  the  consumption  of  the  plantation  and  then  as  much  cotton  as 
can  be  made  by  requiring  good  and  reasonable  labor  of  operatives 
and  teams. 

Have  a  proper  and  suitable  place  for  everything  and  see  that 
everything  is  kept  in  its  proper  place,  ah1  tools  when  not  in  use  should 
be  well  cleaned  and  put  away. 

Let  the  cotton  be  well  dried  before  cleaning  it.  Be  sure  the  seed 
put  up  for  planting  are  well  dried  and  a  sufficient  quantity  saved 
to  plant  the  farm  two  or  three  times  over;  and  will  suggest  the  pro- 
priety of  sending  a  few  trustworthy  hands  ahead  of  the  regular  pickers 
to  gather  from  the  early  opening  —  where  the  plant  is  well  supplied 
with  bolls  —  for  seed  for  planting  the  ensueing  year;  in  this  way  by 
gathering  sufficient  quantity  every  year  to  plant  twenty  or  twenty 
five  acres  we  shall  be  able  to  keep  up  a  supply  of  the  best  and  most 
approved  Seed  —  nor  should  there  be  less  care  observed  in  selecting 
the  Seed  corn  from  the  crib. 

I  would  that  every  human  being  have  the  gospel  preached  to  them 
in  its  original  purity  and  simplicity;  it  therefore  devolves  upon  me 
to  have  these  dependants  properly  instructed  in  all  that  pertains  to 
the  salvation  of  their  souls;  to  this  and  whenever  the  services  of  a 
suitable  person  can  be  secured,  have  them  instructed  in  these  things  — 
in  view  of  the  fanaticism  of  the  age  it  behooves  the  Master  or  Overseer 
to  be  present  on  all  such  occasions.  They  should  be  instructed  on 
Sundays  in  the  day  time  if  practicable,  if  not  then  on  Sunday  night. 

J.  W.  FOWLER. 


SLAVERY  AND   THE   SOUTH  585 

B.   Management  of  Slaves  on  a  Cotton  Plantation,  1852  l 

Detailed  instructions  for  the  management  of  a  cotton  plantation  reveal  the 
many-sided  relations  of  the  owner  to  his  slaves. 

My  first  care  has  been  to  select  a  proper  place  for  my  "  Quarter," 
well  protected  by  the  shade  of  forest  trees,  sufficiently  thinned  out 
to  admit  a  free  circulation  of  air,  so  situated  as  to  be  free  from  the 
impurities  of  stagnant  water,  and  to  erect  comfortable  houses  for  my 
negroes.  Planters  do  not  always  reflect  that  there  is  more  sickness, 
and  consequently,  greater  loss  of  life,  from  the  decaying  logs  of  negro 
houses,  open  floors,  leaky  roofs,  and  crowded  rooms,  than  all  other 
causes  combined;  and  if  humanity  will  not  point  out  the  proper 
remedy,  let  self-interest  for  once  act  as  a  virtue,  and  prompt  him  to 
save  the  health  and  lives  of  his  negroes,  by  at  once  providing  com- 
fortable quarters  for  them.  There  being  upwards  of  150  negroes 
on  the  plantation,  I  provide  for  them  24  houses  made  of  hewn  post 
oak,  covered  with  cypress,  16  by  18,  with  close  plank  floors  and  good 
chimneys,  and  elevated  two  feet  from  the  ground.  The  ground  under 
and  around  the  houses  is  swept  every  month,  and  the  houses,  both 
inside  and  out,  white-washed  twice  a  year.  The  houses  are  situated 
in  a  double  row  from  north  to  south,  about  200  feet  apart,  the  doors 
facing  inwards,  and  the  houses  being  in  a  line,  about  50  feet  apart. 
At  one  end  of  the  street  stands  the  overseer's  house,  workshops,  tool 
house,  and  wagon  sheds;  at  the  other,  the  grist  and  saw-mill,  with 
good  cisterns  at  each  end,  providing  an  ample  supply  of  pure  water. 
My  experience  has  satisfied  me,  that  spring,  well,  and  lake  water  are 
all  unhealthy  in  this  climate,  and  that  large  under-ground  cisterns, 
keeping  the  water  pure  and  cool,  are  greatly  to  be  preferred.  They 
are  easily  and  cheaply  constructed,  very  convenient,  and  save  both 
doctors'  bills  and  loss  of  life.  The  negroes  are  never  permitted  to 
sleep  before  the  fire,  either  lying  down  or  sitting  up,  if  it  can  be 
avoided,  as  they  are  always  prone  to  sleep  with  their  heads  to  the  fire, 
are  liable  to  be  burnt  and  to  contract  diseases:  but  beds  with  ample 
clothing  are  provided  for  them,  and  in  them  they  are  made  to  sleep. 
As  to  their  habits  of  amalgamation  and  intercourse,  I  know  of  no 
means  whereby  to  regulate  them,  or  to  restrain  them;  I  attempted 
it  for  many  years  by  preaching  virtue  and  decency,  encouraging  mar- 
riages, and  by  punishing,  with  some  severity,  departures  from  marital 
obligations;  but  it  was  all  in  vain.  I  allow  for  each  hand  that  works 

1  The  Industrial  Resources  of  the  Southern  and  Western  Slates.  Edited  by 
J.  D.  B.  De  Bow  (New  Orleans,  1852),  II,  330-3. 


5 86  READINGS  IN  ECONOMIC  HISTORY 

out,  four  pounds  of  clear  meat  and  one  peck  of  meal  per  week.  Their 
dinners  are  cooked  for  them,  and  carried  to  the  field,  always  with  vege- 
tables, according  to  the  season.  There  are  two  houses  set  apart  at 
mid-day  for  resting,  eating,  and  sleeping,  if  they  desire  it,  and  they 
retire  to  one  of  the  weather  sheds  or  the  grove  to  pass  this  time,  not 
being  permitted  to  remain  in  the  hot  sun  while  at  rest.  They  cook 
their  own  suppers  and  breakfasts,  each  family  being  provided  with 
an  oven,  skillet,  and  sifter,  and  each  one  having  a  coffee-pot,  (and 
generally  some  coffee  to  put  in  it,)  with  knives  and  forks,  plates,  spoons, 
cups,  &c.,  of  their  own  providing.  The  wood  is  regularly  furm'shed 
them;  for  I  hold  it  to  be  absolutely  mean  for  a  man  to  require  a  negro 
to  work  until  daylight  closes  in,  and  then  force  him  to  get  wood, 
sometimes  half  a  mile  off,  before  he  can  get  a  fire,  either  to  warm  him- 
self or  cook  his  supper.  Every  negro  has  his  hen-house,  where  he 
raises  poultry,  which  he  is  not  permitted  to  sell,  and  he  cooks  and 
eats  his  chickens  and  eggs  for  his  evening  and  morning  meals  to  suit 
himself;  besides,  every  family  has  a  garden,  paled  in,  where  they 
raise  such  vegetables  and  fruits  as  they  take  a  fancy  to.  A  large  house 
is  provided  as  a  nursery  for  the  children,  where  all  are  taken  at  day- 
light, and  placed  under  the  charge  of  a  careful  and  experienced  woman, 
whose  sole  occupation  is  to  attend  to  them,  and  see  that  they  are 
properly  fed  and  attended  to,  and  above  all  things  to  keep  them  as 
dry  and  as  cleanly  as  possible,  under  the  circumstances.  The  suck- 
ling women  come  in  to  nurse  their  children  four  times  during  the  day; 
and  it  is  the  duty  of  the  nurse  to  see  that  they  do  not  perform  this 
duty  until  they  have  become  properly  cool,  after  walking  from  the 
field.  In  consequence  of  these  regulations,  I  have  never  lost  a  child 
from  being  burnt  to  death,  or,  indeed,  by  accidents  of  any  description; 
and  although  I  have  had  more  than  thirty  born  within  the  last  five 
years,  yet  I  have  not  lost  a  single  one  from  teething,  or  the  ordinary 
summer  complaints  so  prevalent  amongst  the  children  in  this  climate. 
I  give  to  my  negroes  four  full  suits  of  clothes  with  two  pair  of  shoes, 
every  year,  and  to  my  women  and  girls  a  calico  dress  and  two  hand- 
kerchiefs extra.  I  do  not  permit  them  to  have  "truck  patches" 
other  than  their  gardens,  or  to  raise  anything  whatever  for  market; 
but  in  lieu  thereof,  I  give  to  each  head  of  a  family  and  to  every  single 
negro,  on  Christmas  day,  five  dollars,  and  send  them  to  the  county 
town,  under  the  charge  of  the  overseer  or  driver,  to  spend  their  money. 
In  this  way,  I  save  my  mules  from  being  killed  up  in  summer,  and 
my  oxen  in  winter,  by  working  and  hauling  off  their  crops;  and  more 
than  all,  the  negroes  are  prevented  from  acquiring  habits  of  trading 


SLAVERY   AND   THE   SOUTH  587 

in  farm  produce,  which  invariably  leads  to  stealing,  followed  by 
whipping,  trouble  to  the  master,  and  discontent  on  the  part  of  the 
slave.  I  permit  no  spirits  to  be  brought  on  the  plantation,  or  used 
by  any  negro,  if  I  can  prevent  it ;  and  a  violation  of  this  rule,  if  found 
out,  is  always  followed  by  a  whipping,  and  a  forfeiture  of  the  five 
dollars  next  Christmas. 

I  have  a  large  and  comfortable  hospital  provided  for  my  negroes 
when  they  are  sick;  to  this  is  attached  a  nurse's  room;  and  when  a 
negro  complains  of  being  too  unwell  to  work,  he  is  at  once  sent  to  the 
hospital,  and  put  under  the  charge  of  a  very  experienced  and  careful 
negro  woman,  who  administers  the  medicine  and  attends  to  his  diet, 
and  where  they  remain  until  they  are  able  to  work  again.  This  woman 
is  provided  with  sugar,  coffee,  molasses,  rice,  flour,  and  tea,  and  does 
not  permit  a  patient  to  taste  of  meat  or  vegetables  until  he  is  restored 
to  health.  Many  negroes  relapse  after  the  disease  is  broken,  and  die, 
in  consequence  of  remaining  in  their  houses  and  stuffing  themselves 
with  coarse  food  after  their  appetites  return,  and  both  humanity  and 
economy  dictate  that  this  should  be  prevented.  From  the  system 
I  have  pursued,  I  have  not  lost  a  hand  since  the  summer  of  1845, 
(except  one  that  was  killed  by  accident,)  nor  has  my  physician's  bill 
averaged  fifty  dollars  a  year,  notwithstanding  I  live  near  the  edge 
of  the  swamp  of  Big  Black  River,  where  it  is  thought  to  be  very 
unhealthy. 

I  cultivate  about  ten  acres  of  cotton  and  six  of  corn  to  the  hand, 
not  forgetting  the  little  wheat  patch  that  your  correspondent  speaks 
of,  which  costs  but  little  trouble,  and  proves  a  great  comfort  to  the 
negroes;  and  have  as  few  sour  looks  and  as  little  whipping  as  almost 
any  other  place  of  the  same  size. 

I  must  not  omit  to  mention  that  I  have  a  good  fiddler,  and  keep 
him  well  supplied  with  catgut,  and  I  make  it  his  duty  to  play  for  the 
negroes  every  Saturday  night  until  twelve  o'clock.  They  are  exceed- 
ingly punctual  in  their  attendance  at  the  ball  while  Charley's  fiddle 
is  always  accompanied  with  Ihurod  on  the  triangle,  and  Sam  to 
"pat." 

I  also  employ  a  good  preacher,  who  regularly  preaches  to  them  on 
the  Sabbath  day,  and  it  is  made  the  duty  of  every  one  to  come  up 
clean  and  decent  to  the  place  of  worship.  As  Father  Garritt  regu- 
larly calls  on  Brother  Abram  (the  foreman  of  the  prayer-meeting,) 
to  close  the  exercises,  he  gives  out  and  sings  his  hymn  with  much 
unction,  and  always  cocks  his  eye  at  Charley,  the  fiddler,  as  much  as 
to  say,  "Old  fellow,  you  had  your  time  last  night;  now  it  is  mine." 


588  READINGS  IN  ECONOMIC  HISTORY 

I  would  gladly 'learn  every  negro  on  the  place  to  read  the  Bible, 
but  for  a  fanaticism  which,  while  it  professes  friendship  to  the  negro, 
is  keeping  a  cloud  over  his  mental  vision,  and  almost  crushing  out 
his  hopes  of  salvation. 

These  are  some  of  the  leading  outlines  of  my  management,  so  far 
as  my  negroes  are  concerned.  That  they  are  imperfect,  and  could  be 
greatly  improved,  I  readily  admit;  and  it  is  only  with  the  hope  that 
I  shall  be  able  to  improve  them  by  the  experience  of  others,  that  I 
have  given  them  to  the  public. 

Should  you  come  to  the  conclusion  that  these  rules  would  be  of 
any  service  when  made  known  to  others,  you  will  please  give  them  a 
place  in  the  "Review." 

A  MISSISSIPPI  PLANTER. 

RULES  AND  REGULATIONS  FOR  THE  GOVERNMENT  OF  A  SOUTHERN 

PLANTATION 

1.  There  shall  be  a  place  for  everything,  and  everything  shall  be 
kept  in  its  place. 

2.  On  the  first  days  of  January  and  July,  there  shall  be  an  account 
taken  of  the  number  and  condition  of  all  the  negroes,  stock,  and  farm- 
ing utensils  of  every  description  on  the  premises,  and  the  same  shall 
be  entered  in  the  plantation  book. 

3.  It  shall  be  the  duty  of  the  overseer  to  call  upon  the  stock- 
minder  once  every  day,  to  know  if  the  cattle,  sheep,  and  hogs  have 
been  seen  and  counted,  and  to  find  out  if  any  are  dead,  missing,  or 
lost. 

4.  It  shall  be  the  duty  of  the  overseer,  at  least  once  in  every  week, 
to  see  and  count  the  stock  himself,  and  to  inspect  the  fences,  gates, 
and  water-gaps,  on  the  plantation,  and  see  that  they  are  in  good  order. 

5.  The  wagons,  carts,  and  all  other  implements,  are  to  be  kept 
under  the  sheds,  and  in  the  houses  where  they  belong,  except  when 
in  use. 

6.  Each  negro  man  will  be  permitted  to  keep  his  own  axe,  and 
shall  have  it  forthcoming  when  required  by  the  overseer.     No  other 
tool  shall  be  taken  or  used  by  any  negro  without  the  permission  of 
the  overseer. 

7.  Humanity  on  the  part  of  the  overseer,  and  unqualified  obedi- 
ence on  the  part  of  the  negro,  are,  under  all  circumstances,  indis- 
pensable. 

8.  Whipping,  when  necessary,  shall  be  in  moderation,  and  never 
done  in  a  passion;   and  the  driver  shall  in  no  instance  inflict  punish- 


SLAVERY  AND   THE   SOUTH  589 

ment,  except  in  the  presence  of  the  overseer,  and  when,  from  sickness, 
he  is  unable  to  do  it  himself. 

9.  The  overseer  shall  see  that  the  negroes  are  properly  clothed 
and  well  fed.    He  shall  lay  off  a  garden  of  at  least  six  acres,  and  cul- 
tivate it  as  part  of  his  crop,  and  give  the  negroes  as  many  vegetables 
as  may  be  necessary. 

10.  It  shall  be  the   duty  of   the  overseer  to  select  a  sufficient 
number  of  the  women,  each  week,  to  wash  for  all.     The  clothes  shall 
be  well  washed,  ironed,  and  mended,  and  distributed  to  the  negroes  on 
Sunday  morning;  when  every  negro  is  expected  to  wash  himself,  comb 
his  head,  and  put  on  clean  clothes.     No  washing  or  other  labor  will 
be  tolerated  on  the  Sabbath. 

11.  The  negroes  shall  not  be  worked  in  the  rain,  or  kept  out  after 
night,  except  in  weighing  or  putting  away  cotton. 

12.  It  shall  be  the  duty  of  the  driver,  at  such  hours  of  the  night  as 
the  overseer  may  designate,  to  blow  his  horn,  and  go  around  and  see 
that  every  negro  is  at  his  proper  place,  and  to  report  to  the  overseer 
any  that  may  be  absent;   and  it  shall  be  the  duty  of  the  overseer,  at 
some  hour  between  that  time  and  daybreak,  to  patrol  the  quarters 
himself,  and  see  that  every  negro  is  where  he  should  be. 

13.  The  negro  children  are  to  be  taken,  every  morning,  by  their 
mothers,  and  carried  to  the  houses  of  the  nurses;    and  every  cabin 
shall  be  kept  locked  during  the  day. 

14.  Sick  negroes  are  to  receive  particular  attention.     When  they 
are  first  reported  sick,  they  are  to  be  examined  by  the  overseer,  and 
prescribed  for,  and  put  under  the  care  of  the  nurse,  and  not  put  to 
work  until  the  disease  is  broken  and  the  patient  beyond  the  power 
of  a  relapse. 

15.  When  the  overseer  shall  consider  it  necessary  to  send  for  a 
physician,  he  shall  enter  in  the  plantation  book  the  number  of  visits, 
and  to  what  negro  they  are  made. 

16.  When  the  negro  shall  die,  an  hour  shall  be  set  apart  by  the 
overseer  for  his  burial;  and  at  that  hour  all  business  shall  cease,  and 
every  negro  on  the  plantation,  who  is  able  to  do  so,  shall  attend  the 
burial. 

17.  The  overseer  shall  keep  a  plantation  book,  in  which  he  shall 
register  the  birth  and  name  of  each  negro  that  is  born;  the  name  of 
each  negro  that  died,  and  specify  the  disease  that  killed  him.    He 
shall  also  keep  in  it  the  weights  of  the  daily  picking  of  each  hand; 
the  mark,  number,  and  weight  of  each  bale  of  cotton,  and  the  time  of 
sending  the  same  to  market;  and  all  other  such  occurrences,  relating 


5QO  READINGS  IN  ECONOMIC  HISTORY 

to  the  crop,  the  weather,  and  all  other  matters  pertaining  to  the  plan- 
tation, that  he  may  deem  advisable. 

1 8.  The  overseer  shall  pitch  the  crops,  and  work  them  according 
to  his  own  judgment,  with  the  distinct  understanding  that  a  failure 
to  make  a  bountiful  supply  of  corn  and  meat  for  the  use  of  the  planta- 
tion, will  be  considered  as  notice  that  his  services  will  not  be  required 
for  the  succeeding  year. 

19.  The  negroes,  teams,  and  tools  are  to  be  considered  under  the 
overseer's  exclusive  management,  and  are  not  to  be  interfered  with 
by  the  employer,  only  so  far  as  to  see  that  the  foregoing  rules  are 
strictly  observed. 

20.  The  overseer  shall,  under  no  circumstances,  create  an  account 
against  his  employer,  except  in  the  employment  of  a  physician,  or  in 
the  purchase  of  medicines;   but  whenever  any  thing  is  wanted  about 
the  plantation,  he  shall  apply  to  his  employer  for  it. 

21.  Whenever  the  overseer,  or  his  employer,  shall  become  dis- 
satisfied, they  shall,  in  a  frank  and  friendly  manner,  express  the  same, 
and,  if  either  party  desires  it,  he  shall  have  the  right  to  settle  and 
separate. 

C.  Description  of  a  Southern  Rice  Plantation,  1839  1 

The  instructions  given  by  planters  to  their  overseers  reveal,  no  doubt,  the 
brighter  side  of  plantation  life,  for  we  may  suppose  that  these  instructions  were 
given  with  the  view  of  insuring  humane  treatment  for  the  slaves.  Travelers  were 
almost  unanimous  in  the  opinion,  however,  that  the  slaves  were  often  overworked 
and  mistreated. 

We  visited  one  of  the  rice  plantations  in  the  neighborhood  of  ' 
Savannah,  and  saw  the  condition  of  the  slaves  on  it  with  our  own 
eyes.  The  estate  was  considered  to  be  a  valuable  one,  and  under  a 
fair  condition  of  management,  not  among  the  best  nor  among  the 
worst,  but  just  such  an  average  plantation  as  we  wish  to  examine. 
The  dwellings  for  the  negroes  were  built  of  wood,  ranged  in  rows  of 
great  uniformity,  raised  a  little  above  the  ground,  each  building  con- 
taining two  or  more  rooms,  with  a  fire-place  for  two.  We  saw  also 
the  nursery  for  the  children,  and  the  sick-room  or  hospital  for  those 
who  were  hurt  or  diseased,  and  we  had  communication  with  the  over- 
seer, and  several  of  the  people,  from  both  of  whom  we  learnt  the 
following  facts,  as  to  their  routine  of  labour,  food,  and  treatment. 


1  The  .Slave  States  of  America.     By  J.  S.  Buckingham  (London,  [1842]),  I, 
132-4- 


SLAVERY  AND   THE   SOUTH  591 

The  slaves  are  all  up  by  daylight;  and  every  one  who  is  able  to 
work,  from  eight  or  nine  years  old  and  upwards,  repair  to  their  several 
departments  of  field-labour.  They  do  not  return  to  their  houses 
either  to  breakfast  or  dinner;  but  have  their  food  cooked  for  them  in 
the  field,  by  negroes  appointed  to  that  duty.  They  continue  thus 
at  work  till  dark,  and  then  return  to  their  dwellings.  There  is  no 
holiday  on  Saturday  afternoon,  or  any  other  time  throughout  the 
year,  except  a  day  or  two  at  Christmas;  but  from  daylight  to  dark, 
every  day  except  Sunday,  they  are  at  their  labour.  Their  allowance 
of  food  consists  of  a  peck,  or  two  gallons,  of  Indian  corn  per  week, 
half  that  quantity  for  working  boys  and  girls,  and  a  quarter  for  little 
children.  This  corn  they  are  obliged  to  grind  themselves,  after 
their  hours  of  labour  are  over;  and  it  is  then  boiled  in  water,  and  made 
into  hominey,  but  without  anything  to  eat  with  it,  neither  bread, 
rice,  fish,  meat,  potatoes,  or  butter;  boiled  corn  and  water  only,  and 
barely  a  sufficient  quantity  of  this  for  subsistence. 

Of  clothes,  the  men  and  boys  had  a  coarse  woolen  jacket  and 
trousers  once  a  year,  without  shirt  or  any  other  garment.  This  was 
their  winter  dress;  their  summer  apparel  consists  of  a  similar  suit  of 
jacket  and  trousers  of  the  coarsest  cotton  cloth.  Absence  from 
work,  or  neglect  of  duty,  was  punished  with  stinted  allowance,  im- 
prisonment, and  flogging.  A  medical  man  visited  the  plantation 
occasionally,  and  medicines  were  administered  by  a  negro  woman 
called  the  sick-nurse.  No  instruction  was  allowed  to  be  given  in 
reading  or  writing,  no  games  or  recreations  were  provided,  nor  was 
there  indeed  any  time  to  enjoy  them  if  they  were.  Their  lot  was  one 
of  continued  toil,  from  morning  to  night,  uncheered  even  by  the 
hope  of  any  change,  or  prospect  of  improvement  in  condition. 

In  appearance,  all  the  negroes  that  we  saw  looked  insufficiently 
fed,  most  wretchedly  clad,  and  miserably  accommodated  in  their 
dwellings;  for  though  the  exteriors  of  their  cottages  were  neat  and 
uniform,  being  all  placed  in  regular  order  and  whitewashed,  yet 
nothing  could  be  more  dirty,  gloomy,  and  wretched  than  their  interiors; 
and  we  agreed  that  the  criminals  in  all  the  state  prisons  of  the  country, 
that  we  had  yet  seen,  were  much  better  off  in  food,  raiment,  and 
accommodation,  and  much  less  severely  worked,  than  those  men, 
whose  only  crime  was  that  they  were  of  a  darker  colour  than  the  race 
that  held  them  in  bondage. 


592  READINGS  IN  ECONOMIC  HISTORY 

D.   The  System  of  Task  Work,  1854 1 

In  an  effort  to  stimulate  the  slave  to  exert  himself,  many  planters  resorted  to 
the  system  of  task  work.  By  this  system  a  task  was  assigned  to  each  slave  to  be 
finished  within  a  certain  time,  with  the  understanding  that  any  time  the  slave 
might  have  after  the  task  was  finished,  was  his  own  to  spend  on  his  own  plot  of 
ground.  Mr.  Olmsted,  the  best-known  writer  on  conditions  in  the  south  just 
prior  to  the  outbreak  of  the  Civil  War,  described  this  system  as  follows : 

After  passing  through  tool-rooms,  corn-rooms,  mule-stables,  store- 
rooms, and  a  large  garden,  in  which  vegetables  to  be  distributed 
among  the  negroes,  as  well  as  for  the  family,  are  grown,  we  walked 
to  the  rice-land.  It  is  divided  by  embankments  into  fields  of  about 
twenty  acres  each,  but  varying  somewhat  in  size,  according  to  the 
course  of  the  river.  The  arrangements  are  such  that  each  field  may 
be  flooded  independently  of  the  rest,  and  they  are  subdivided  by 
open  ditches  into  rectangular  plats  of  a  quarter  acre  each.  We  first 
proceeded  to  where  twenty  or  thirty  women  and  girls  were  engaged 
in  raking  together,  in  heaps  and  winrows,  the  stubble  and  rubbish 
left  on  the  field  after  the  last  crop,  and  burning  it.  The  main  object 
of  this  operation  is  to  kill  all  the  seeds  of  weeds,  or  of  rice,  on  the 
ground.  Ordinarily  it  is  done  by  tasks  —  a  certain  number  of  the 
small  divisions  of  the  field  being  given  to  each  hand  to  burn  in  a  day; 
but  owing  to  a  more  than  usual  amount  of  rain  having  fallen  lately, 
and  some  other  causes,  making  the  work  harder  in  some  places  than 
others,  the  women  were  now  working  by  the  day,  under  the  direction 
of  a  "driver,"  a  negro  man,  who  walked  about  among  them,  taking 
care  that  they  left  nothing  unburned.  Mr.  X.  inspected  the  ground 
they  had  gone  over,  to  see  whether  the  driver  had  done  his  duty. 
It  had  been  sufficiently  well  burned,  but,  not  more  than  quarter  as 
much  ground  had  been  gone  over,  he  said,  as  was  usually  burned  in 
task- work, —  and  he  thought  they  had  been  very  lazy,  and  repri- 
manded them  for  it.  The  driver  made  some  little  apology,  but  the 
women  offered  no  reply,  keeping  steadily,  and  it  seemed  sullenly, 
on  at  their  work. 

In  the  next  field,  twenty  men,  or  boys,  for  none  of  them  looked  as 
if  they  were  full-grown,  were  plowing,  each  with  a  single  mule,  and 
a  light,  New- York-made  plow.  The  soil  was  very  friable,  the  plowing 
easy,  and  the  mules  proceeded  at  a  smart  pace;  the  furrows  were 
straight,  regular,  and  well  turned.  Their  task  was  nominally  an 
acre  and  a  quarter  a  day;  somewhat  less  actually,  as  the  measure 

1  A  Journey  in  the  Seaboard  Slave  States.  By  Frederick  Law  Olmsted  (New 
York,  1859), 


SLAVERY  AND   THE   SOUTH  593 

includes  the  space  occupied  by  the  ditches,  which  are  two  to  three 
feet  wide,  running  around  each  quarter  of  an  acre.  The  plowing 
gang  was  superintended  by  a  driver  who  was  provided  with  a  watch; 
and  while  we  were  looking  at  them  he  called  out  that  it  was  twelve 
o'clock.  The  mules  were  immediately  taken  from  the  plows,  and  the 
plow-boys  mounting  them,  leapt  the  ditches,  and  cantered  off  to  the 
stables,  to  feed  them.  One  or  two  were  ordered  to  take  their  plows 
to  the  blacksmith,  for  repairs.  .  .  . 

The  plowmen  got  their  dinner  at  this  time:  those  not  using  horses 
do  not  usually  dine  till  they  have  finished  their  tasks;  but  this,  I 
believe,  is  optional  with  them.  They  commence  work  at  sunrise,  and 
at  about  eight  o'clock  have  breakfast  brought  to  them  in  the  field, 
each  hand  having  left  a  bucket  with  the  cook  for  that  purpose. 
All  who  are  working  in  connection  leave  their  work  together,  and 
gather  in  a  social  company  about  a  fire,  where  they  generally  spend 
about  half  an  hour  at  breakfast  time.  The  provisions  furnished 
them  consist  mainly  of  meal,  rice  and  vegetables,  with  salt  and  mo- 
lasses, and  occasionally  bacon,  fish,  and  coffee.  The  allowance  is 
a  peck  of  meal,  or  an  equivalent  quantity  of  rice  per  week,  to  each 
working  hand,  old  or  young,  besides  small  stores.  Mr.  X.  says  that 
he  has  lately  given  a  less  amount  of  meat  than  is  now  usual  on  planta- 
tions, having  observed  that  the  general  health  of  the  negroes  is  not  as 
good  as  formerly,  when  no  meat  at  all  was  customarily  given  them. 
The  general  impression  among  planters  is,  that  the  negroes  work 
much  better  for  being  supplied  with  three  or  four  pounds  of  bacon 
a  week. 

The  field-hands  are  all  divided  into  four  classes,  according  to  their 
physical  capacities.  The  children  beginning  as  "quarter-hands,"  ad- 
vancing to  "half-hands,"  and  then  to  "three-quarter  hands;"  and, 
finally,  when  mature,  and  able-bodied,  healthy  and  strong,  to  "full 
hands."  As  they  decline  in  strength,  from  age,  sickness,  or  other 
cause,  they  retrograde  in  the  scale,  and  proportionately  less  labor  is 
required  of  them.  Many,  of  naturally  weak  frame,  never  are  put 
among  the  full  hands.  Finally,  the  aged  are  left  out  at  the  annual 
classification,  and  no  more  regular  field-work  is  required  of  them, 
although  they  are  generally  provided  with  some  light,  sedentary 
occupation.  I  saw  one  old  woman  picking  "tailings"  of  rice  out 
of  a  heap  of  chaff,  an  occupation  at  which  she  was  literally  not  earn- 
ing her  salt.  Mr.  X.  told  me  she  was  a  native  African,  having  been 
brought  when  a  girl  from  the  Guinea  coast.  She  spoke  almost  unin- 
telligibly; but  after  some  other  conversation,  in  which  I  had  not  been 


594  READINGS  IN  ECONOMIC  HISTORY 

able  to  understand  a  word  she  said,  he  jokingly  proposed  to  send  her 
back  to  Africa.  She  expressed  her  preference  to  remain  where  she 
was,  very  emphatically.  "Why?"  She  did  not  answer  readily,  but 
being  pressed,  threw  up  her  palsied  hands,  and  said  furiously,  "I  lubs 
'ou  mas'r,  oh,  I  lubs  'ou.  I  don't  want  to  go  'way  from  'ou." 

The  field  hands,  are  nearly  always  worked  in  gangs,  the  strength 
of  a  gang  varying  according  to  the  work  that  engages  it;  usually  it 
numbers  twenty  or  more,  and  is  directed  by  a  driver.  As  on  most 
large  plantations,  whether  of  rice  or  cotton,  in  Eastern  Georgia  and 
South  Carolina,  nearly  all  ordinary  and  regular  work  is  performed  by 
tasks;  that  is  to  say,  each  hand  has  his  labor  for  the  day  marked  out 
before  him,  and  can  take  his  own  time  to  do  it  in.  For  instance, 
in  making  drains  in  light,  clean  meadow  land,  each  man  or  woman 
of  the  full  hands  is  required  to  dig  one  thousand  cubic  feet;  in  swamp- 
land that  is  being  prepared  for  rice  culture,  where  there  are  not  many 
stumps,  the  task  for  a  ditcher  is  five  hundred  feet:  while  in  a  very 
strong  cypress  swamp,  only  two  hundred  feet  is  required;  in  hoeing 
rice,  a  certain  number  of  rows,  equal  to  one-half  or  two-thirds  of  an 
acre,  according  to  the  condition  of  the  land;  in  sowing  rice  (strewing 
in  drills),  two  acres;  in  reaping  rice  (if  it  stands  well),  three-quarters  of 
an  acre;  or,  sometimes  a  gang  will  be  required  to  reap,  tie  in  sheaves, 
and  carry  to  the  stack-yard  the  produce  of  a  certain  area,  commonly 
equal  to  one-fourth  the  number  of  acres  that  there  are  hands  working 
together.  Hoeing  cotton,  corn,  or  potatoes;  one  half  to  one  acre. 
Threshing;  five  to  six  hundred  sheaves.  In  plowing  rice-land  (light, 
clean,  mellow  soil)  with  a  yoke  of  oxen,  one  acre  a  day,  including 
the  ground  lost  in  and  near  the  drains  —  the  oxen  being  changed 
at  noon.  A  cooper,  also,  for  instance,  is  required  to  make  barrels 
at  the  rate  of  eighteen  a  week.  Drawing  staves;  500  a  day.  Hoop 
poles;  1 20.  Squaring  timber;  100  ft.  Laying  worm-fence;  50 
panels  per  hand.  Post  and  rail  do.,  posts  set  2\  to  3  ft.  deep,  9  ft. 
apart,  nine  or  ten  panels  per  hand.  In  getting  fuel  from  the  woods, 
(pine,  to  be  cut  and  split,)  one  cord  is  the  task  for  a  day.  In  "  mauling 
rails,"  the  taskman  selecting  the  trees  (pine)  that  he  judges  will  split 
easiest,  one  hundred  a  day,  ends  not  sharpened. 

These  are  the  tasks  for  first  class  able-bodied  men,  they  are  les- 
sened by  one  quarter  for  three  quarter  hands,  and  proportionately 
for  the  lighter  classes.  In  alloting  the  tasks,  the  drivers  are  expected 
to  put  the  weaker  hands,  where  (if  there  is  any  choice  in  the  appear- 
ance of  the  ground,  as  where  certain  rows  in  hoeing  corn  would  be  less 
weedy  than  others),  they  will  be  favoured.  .  .  . 


SLAVERY  AND   THE   SOUTH  595 

IV.  THE  INTERNAL  SLAVE  TRADE 

The  Movement  of  Slaves  toward  the  South,  1840-1860  1 

There  has  been  a  great  deal  of  discussion  about  the  magnitude  of  the  internal 
slave  trade  during  the  years  preceding  the  Civil  War.  Some  have  contended  that 
slaves  were  bred  in  the  border  states  for  the  markets  of  the  lower-south.  Others 
have  denied  that  such  was  the  case.  There  is  no  doubt,  however,  that  many  slaves 
were  raised  in  Virginia  and  Kentucky  and  then  sent  to  the  gulf  regions.  In  the 
absence  of  definite  statistics  on  the  subject,  the  extent  of  this  trade  can  never  be 
definitely  known.  The  following  is  merely  a  well-founded  opinion : 

...  It  is  this,  the  profit  developed  by  trading  in  slaves,  and 
this  alone,  which  has  enabled  slavery  in  the  older  slave  states  of 
North  America  to  survive  the  consequences  of  its  own  ravages.  In 
Maryland  and  Virginia,  perhaps  also  in  the  Carolinas  and  Georgia, 
free  institutions  would  long  since  have  taken  the  place  of  slavery, 
were  it  not  that  just  as  the  crisis  of  the  system  had  arrived,  the 
domestic  slave  trade  opened  a  door  of  escape  from  a  position  which 
had  become  untenable.  -The  conjuncture  was  peculiar,  and  would 
doubtless  by  Southern  theologians  be  called  providential.  The  prog- 
ress of  devastation  had  reached  the  point  at  which  slave  cultivation 
could  no  longer  sustain  itself  —  the  contingency  predicted  by  Roanoke, 
when,  instead  of  the  slave  running  away  from  his  master,  the  master 
should  run  away  from  his  slave.  A  considerable  emigration  of  planters 
had  actually  taken  place,  and  the  deserted  fields  were  already  receiv- 
ing a  new  race  of  settlers  from  the  regions  of  freedom.  The  long 
night  of  slavery  seemed  to  be  passing  away,  and  the  dawn  of  a  brighter 
day  to  have  arrived,  when  suddenly  the  auspicious  movement  was 
arrested.  A  vast  extension  of  the  territory  of  the  United  States, 
opening  new  soils  to  Southern  enterprise,  exactly  coincided  with  the 
prohibition  of  the  external  slave  trade,  and  both  fell  in  with  the  crisis 
in  the  older  states.  The  result  was  a  sudden  and  remarkable  rise  in 
the  price  of  slaves.  The  problem  of  the  planter's  position  was  at 
once  solved,  and  the  domestic  slave  trade  commenced.  Slavery  had 
robbed  Virginia  of  the  best  riches  of  her  soil,  but  she  still  had  a  noble 
climate  —  a  climate  which  would  fit  her  admirably  for  being  the  breed- 
ing place  of  the  South.  A  division  of  labour  between  the  old  and 
the  new  states  took  place.  In  the  former  the  soil  was  extensively 
exhausted,  but  the  climate  was  salubrious;  in  the  latter  the  climate 
was  unfavorable  to  human  life  spent  in  severe  toil,  but  the  soil  was 
teeming  with  riches.  The  old  states,  therefore,  undertook  the  part 

1  The  Slave  Power.     By  J.  E.  Cairnes  (London  and  Cambridge,  1863),  124-31. 


596  READINGS  IN  ECONOMIC  HISTORY 

of  breeding  and  rearing  slaves  till  they  attained  to  physical  vigour, 
and  the  new  that  of  using  up  in  the  development  of  their  virgin 
resources  the  physical  vigour  which  had  been  thus  obtained. 

The  charge  of  breeding  slaves  for  the  market  is  one  which  the 
citizens  of  Virginia,  more  especially  when  resident  in  Europe,  are 
apt  indignantly  to  deny;  and,  in  a  certain  sense,  the  denial  may  not 
be  wholly  destitute  of  foundation.  It  is  perhaps  true  that  in  no 
particular  instance  is  a  slave  brought  into  the  world  for  the  purpose, 
distinctly  conceived  beforehand,  of  being  sold  to  the  South.  Never- 
theless it  is  absolutely  certain  that  the  whole  business  of  raising  slaves 
in  the  Border  states  is  carried  on  with  reference  to  their  price,  and 
that  the  price  of  slaves  in  the  Border  states  is  determined  by  the 
demand  for  them  in  the  Southern  markets.  "Nowhere,"  said  Henry 
Clay,  "in  the  farming  portion  of  the  United  States  would  slave  labour 
be  generally  employed,  if  the  proprietors  were  not  tempted  to  raise 
slaves  by  the  high  price  of  the  Southern  markets  which  keeps  it  up 
in  their  own."  Of  the  truth  of  this  remark  an  illustration  was  afforded 
in  1829,  when  a  law  having  been  passed  by  the  state  legislature  of 
Louisiana  interposing  obstacles  to  the  introduction  of  slaves  into  that 
state,  within  two  hours  after  this  was  known  the  price  of  slaves  on  the 
breeding  grounds  of  the  North  fell  25  per  cent.  Again,  at  a  later 
epoch,  when  the  efforts  of  the  Border  slaveholders  to  establish  slavery 
in  California  had  failed,  what  was  the  comment  on  this  failure  made  by 
a  candidate  for  the  governorship  of  Virginia,  then  on  an  electioneering 
tour  through  the  state?  —  that,  but  for  this,  the  price  of  an  able- 
bodied  negro  would  have  risen  to  5,000  dollars  —  in  other  words, 
that  the  closing  of  the  Californian  mines  to  slave  labour  represented 
a  loss  to  that  state  of  4,000  dollars  per  head  on  every  first  class  Vir- 
ginian slave.  Such  is  the  aspect  under  which  the  extension  of  the 
domain  of  slavery  is  regarded  in  Virginia  —  a  point  of  view  somewhat 
hard  to  reconcile  with  the  air  of  injured  virtue  assumed  by  the  'Old 
Dominion '  in  its  repudiation  of  the  internal  slave  trade. 

Indeed  it  would  be  futile  to  deny  —  nor  is  it  denied  by  the  more 
outspoken  of  the  Southern  politicians  —  that  the  markets  of  the 
South  form  the  main  support  of  slavery  in  the  older  Slave  States. 
Of  the  extent  to  which  the  trade  is  carried,  and  the  important  inter- 
ests depending  on  it,  some  notion  may  be  formed  from  its  effects  on 
the  census.  For  the  purpose  of  exhibiting  these  I  shall  compare  the 
population  returns  of  the  three  principal  Border  states, —  Virginia, 
Maryland  and  Kentucky, —  with  those  of  three  working  states  in 
the  extreme  south-west, —  Arkansas,  Mississippi,  and  Louisiana. 


SLAVERY   AND    THE   SOUTH  597 

PERCENTAGE  INCREASE  OF  POPULATION  IN  THE  DECADE  ENDING  1850 

Whites  Slaves 

Virginia 20.77  S-2* 

Maryland 3I-34  o-7° 

Kentucky 28.99  I5-75 

Arkansas 1 10.16         136.26 

Mississippi 65.13  58.74 

Louisiana 61.23  4S-32 

It  will  be  seen  from  the  above  that,  while  in  the  former  group  of 
states  the  white  population  has  progressed  with,  on  the  whole,  toler- 
able regularity,  the  slave  population  has,  in  two  of  them,  scarcely 
advanced  at  all,  and  in  the  third  at  a  rate  far  short  of  that  attained 
by  the  white  population.  On  the  other  hand,  in  the  latter  group  — 
a  group  composed  of  states  in  which  it  is  perfectly  notorious  that 
plantation  labour  is  far  severer  than  in  the  former  —  the  slave  popu- 
lation has  in  one  instance  increased  with  much  greater  rapidity  than 
the  whites,  and  in  another  at  almost  the  same  rate.  Even  in  Louisiana 
the  increase  of  the  slave  population  has  not  fallen  greatly  behind  that 
of  the  whites,  although  the  circumstances  of  that  state  might  well 
lead  us  to  expect  this  result,  being,  as  it  is,  the  seat  of  a  great  com- 
mercial city  with  a  large  and  rapidly  growing  white  population,  and 
its  prevailing  industry  —  the  cultivation  of  sugar  —  being,  as  is  well 
known,  enormously  destructive  of  slave  life. 


CHAPTER  XVIII 
DEVELOPMENT  OF  AGRICULTURE,   1860-1915 

I.  FOREIGN  TRADE  IN  AGRICULTURAL  PRODUCTS 
Extent  and  Character,  1878-1912 l 

Agriculture  furnishes  by  far  the  greater  share  of  the  country's  exports.  The 
extent  of  this  trade  herewith  is  indicated  in  a  Report  of  the  Department  of 
Agriculture  as  follows: 

HIGH   VALUE   OF   NATIONAL   SURPLUS 

Over  a  billion  dollars  is,  for  the  fourth  time,  the  value  of  the  ex- 
ports of  farm  products.  It  is  sufficient  to  pay  the  expenses  of  the 
National  Government.  As  long  ago  as  1878  the  value  of  agricultural 
exports  reached  half  a  billion  dollars;  by  1892  the  amount  had  touched 
$800,000,000;  and  by  1901  it  had  grown  to  $950,000,000.  The 
billion-dollar  mark  was  reached  in  1907,  when  the  value  of  agricul- 
tural exports  amounted  to  $1,054,000,000.  That  amount  has  not 
since  been  equaled,  but  the  exports  of  1908  and  1911  exceeded  a 
billion  dollars  in  value,  and  in  1912  the  amount  fell  short  of  the  record 
exports  by  only  $4,000,000. 

RISING   QUANTITY   OF  EXPORTS 

The  high  value  is  not  entirely  due  to  high  prices.  The  trend  of 
the  quantity  of  the  exports  of  particular  commodities  can  best  be 
understood  by  using  index  numbers.  Let  the  quantities  of  the 
average  yearly  exports  of  the  10  years  1900  to  1909  be  represented 
by  loo  and  convert  the  quantities  of  the  exports  of  other  groups  of 
years  and  of  individual  years  into  terms  related  to  that  basis.  It 
will  then  appear  that  the  exports  of  oleo  oil  have  increased  year  by 
year  after  the  period  of  1900  to  1909  to  the  relative  amount  of  112.3 
in  1912.  This  commodity  was  exported  this  year  to  the  value  of 
$13,000,000. 

1  Annual  Report  of  the  Department  of  Agriculture,  1912  (Washington,  1913), 
22-4. 


DEVELOPMENT  OF   AGRICULTURE  599 

Lard  compounds  also  have  increased  above  the  average  of  the 
period  1900  to  1909,  the  relative  number  for  1912  being  114.8.  The 
exports  of  this  commodity  are  this  year  as  high  as  $5,000,000.  Vari- 
ous animal  oils,  not  specifically  described,  have  increased  in  exports 
during  the  last  three  years.  Another  commodity  that  is  increasing 
in  exports  is  eggs,  which  have  arisen  to  the  relative  number  359.8  in 
comparison  with  100  as  representing  the  10  years  1900  to  1009.  In 
1912  the  value  of  these  exports  amounted  to  $3,400,000.  The  exports 
of  mutton  amount  to  only  a  few  hundred  thousand  dollars  in  value, 
but  they  are  increasing,  and  the  relative  number  for  1912  is  283.1  in 
comparison  with  1900  to  1909. 

The  exports  of  cured  pork  hams  declined  in  1910  and  1911  to  about 
three-quarters  of  the  average  from  1900  to  1909,  but  in  1912  the  ex- 
ports were  very  nearly  restored  to  the  former  amount.  Lard  is 
another  commodity  that  has  been  climbing  back  to  former  importance 
as  an  exported  commodity,  and  the  quantity  exported  in  1912  is 
indicated  by  88.8.  If  the  exports  of  pork  and  of  all  of  its  products 
are  consolidated,  it  will  appear  that  they  are  rapidly  returning  to  the 
average  exports  of  1900  and  1909. 

Cotton  is  the  great  mainstay  of  the  export  trade.  Marked  in- 
crease in  exports  is  conspicuous.  Compared  with  the  average  exports 
of  1900  to  1909  represented  by  100,  the  exports  of  1890  to  1899  were 
79.7;  the  exports  of  1910  were  85.7;  in  1911  they  were  107.8;  and 
in  1912  the  relative  number  is  147.9. 

Apples  are  supporting  an  increased  export  trade,  which  now 
amounts  to  about  $10,000,000.  The  export  trade  in  dried  apples  is 
steadily  increasing,  and  in  comparison  with  the  average  of  1900  to 
1909,  the  exports  of  1912  are  represented  by  159.  For  fresh  apples 
the  exports  of  1912  are  represented  by  124.1.  Prunes  are  a  fruit 
that  has  reversed  the  tide  of  international  trade.  Its  exports  now 
amount  to  several  million  dollars  a  year,  and  are  increasing.  During 
the  last  three  years  the  exports  of  this  fruit  were  nearly  double  the 
average  of  the  period  1900  to  1909.  Raisins  have  done  better  yet, 
and  now  amount  to  about  four  times  the  average  exports  of  the 
period  mentioned.  Their  value  is  more  than  a  million  dollars.  Glu- 
cose and  grape  sugar,  with  exports  amounting  to  several  million  dol- 
lars a  year,  are  contributing  to  the  foreign  trade  annual  quantities 
above  the  average  of  the  lo-year  period  mentioned. 

To  the  list  of  commodities  whose  exports  are  increasing  and  are 
above  the  average  of  the  10  years,  1900  to  1909,  or  very  close  to  that 
average,  may  be  added  hops,  corn-oil  cake,  cotton-seed  oil  cake  and 


600  READINGS  IN  ECONOMIC  HISTORY 

oil-cake  meal,  flaxseed  oil  cake  and  oil-cake  meal,  cotton-seed  oil, 
linseed  oil,  rice,  cotton  seed,  tobacco;  and  the  four  vegetables,  beans, 
pease,  onions,  and  potatoes. 

The  foregoing  would  be  quite  a  respectable  list  even  though  cot- 
ton were  omitted.  Beef  and  its  products  have  gone  into  a  sorry  de- 
cline in  the  export  trade,  but  wheat  flour  still  maintains  a  high  relative 
showing,  as  is  indicated  by  71.2  in  comparison  with  the  annual  average 
of  the  10  years,  1900  to  1909,  and  has  steadily  increased  in  exports 
during  the  last  three  years.  The  exports  of  wheat,  including  flour 
converted  to  wheat,  amounted  to  80,000,000  bushels  in  1912. 

The  general  fact,  however,  is  that  the  packing-house  products 
have  declined  in  value  of  exports  since  1906,  when  they  reached 
their  highest  value,  $208,000,000,  and  have  declined  still  more  in 
quantity  because  of  the  increasing  prices,  yet  the  value  of  packing- 
house exports  has  increased  since  1910  and  reached  the  amount  of 
$164,000,000  in  1912.  So  with  grain  and  grain  products,  the  quan- 
tity in  the  aggregate  is  diminishing  as  well  as  the  value,  and  the  high 
export  values  of  five  and  six  years  ago  have  not  since  been  equaled. 
In  1912  the  export  group  known  as  grain  and  grain  products  had  a 
value  of  $123,000,000. 

IMPORTS 

Agricultural  imports  are  steadily  increasing  in  value,  subject  to 
some  fluctuations.  They  reached  their  highest  value  in  1912,  when 
they  amounted  to  $784,000,000.  This  was  an  increase  of  about 
$100,000,000  over  1911  and  1910,  the  years  of  highest  import  values 
preceding  1912.  Notable  increases  are  found  in  the  imports  of  coffee, 
sugar  and  molasses,  tobacco,  wool,  and  packing-house  products,  in 
which  hides  and  skins  are  very  prominent. 

LARGE   BALANCE   OF   TRADE   MAINTAINED 

It  is  apparent  that  since  1908  the  balance  in  the  foreign  trade 
in  agricultural  products  has  not  kept  up  to  its  former  figure,  but,  as 
has  already  been  said,  this  is  not  because  of  diminished  export  values, 
but  is  due  to  a  greater  increase  of  imports  than  exports.  Notwith- 
standing this,  the  balance  in  favor  of  exports  of  farm  products  was 
as  high  as  $278,000,000  in  1912,  and  this  was  higher  than  the  amount 
for  1910  and  also  for  1009. 

At  no  time  before  1912  have  farm  products  been  hard  pushed, 
nor,  indeed,  closely  approached,  by  products  other  than  agricultural 
ones  in  contribution  to  the  balance  of  trade  in  favor  of  all  exports. 


DEVELOPMENT  OF  AGRICULTURE  601 

It  was  not  until  1898  that  products  other  than  agricultural  had  a 
balance  in  favor  of  exports,  but  twice  since  that  time  —  in  1903  and 
1910  — the  balance  was  in  favor  of  exports.  The  balance  in  favor 
of  the  exports  of  these  commodities  was  only  $5,000,003  below  the 
agricultural  balance  in  1912. 

FOREST   PRODUCTS 

Forest  products  were  exported  in  1912  to  the  value  of  $108,000,000, 
and  this  was  greater  than  the  amount  for  any  preceding  year.  This 
is  partly  due  to  high  prices,  yet  there  were  increases  in  the  quantities 
of  the  exports  of  boards,  shocks,  rosin,  and  turpentine. 

The  imports,  as  well  as  the  exports,  of  forest  products  exhibited 
a  marked  tendency  to  increase  in  value  in  recent  years,  and  during 
these  years  the  imports  have  very  much  exceeded  the  exports  in  value. 
In  1912  the  imports  of  forest  products  were  valued  at  $173,000,000, 
or  $58,000,000  more  than  the  foreign  and  domestic  exports. 

II.  LAND  TENURE  IN  THE  UNITED  STATES 

A.   Land  Tenure  in  1880  l 

One  of  the  marked  differences  between  farming  in  the  United  States  and  farm- 
ing in  Europe  has  been  the  manner  of  holding  lands.  In  this  country  land  has  been 
not  only  easily  acquired,  but  also  easily  transferred.  The  advantages  of  this  system 
over  the  tenancy  system  in  Europe  is  given  in  the  Tenth  Census  as  follows: 

The  methods  of  agriculture  in  any  country  are,  of  necessity,  based 
upon  its  system  of  land  tenure.  Local  systems  of  land-ownership 
and  land-holding,  and  even  traditional  customs  not  compelled  by 
statute  law,  but  which  become  a  sort  of  unwritten  law,  are  not  easily 
changed,  even  if  very  faulty;  but  when  changed  agriculture  adapts 
itself  to  the  new  conditions  with  comparative  ease,  although  usually  not 
quickly.  Fortunately  for  us  feudalism  never  existed  here,  and  has 
not,  therefore,  left  its  evil  influence  on  our  land  laws,  or  on  the  senti- 
ments and  traditions  connected  with  agriculture,  or  on  the  political 
and  social  life  of  either  land-owners  or  farm  laborers.  Our  homestead 
and  pre-emption  laws  have  made  it  possible  for  each  man  to  become 
a  land-owner  upon  actual  occupation  and  settlement,  and  our  land 
laws  secure  to  the  proprietor  perfect  title,  absolute  ownership,  com- 
plete control  and  easy  sale  or  transfer.  Land  has  here  neither  social 
nor  political  value,  but  merely  its  agricultural  value,  and  it  is  placed 

1  Tenth  Census,  1880.  Report  on  the  Productions  of  Agriculture  (Washing- 
ton, 1883),  523-5. 


6o2  READINGS  IN  ECONOMIC  HISTORY 

as  nearly  as  is  possible  on  a  level  with  other  property  as  to  title, 
ownership,  transfer,  in  the  burdens  it  bears  and  the  privileges  it 
confers. 

This  simplicity  of  tenure  and  the  abundance  of  cheap  or  new  land 
have  made  it  possible  for  every  able-bodied  man  of  average  capacity 
to  satisfy  that  desire  which  has  become  instinctive  in  our  race  and 
own  a  home.  A  natural  result  is  that  in  the  grain-growing  district 
the  great  majority  of  farmers  own  the  land  they  till,  and  that  as  the 
population  becomes  more  dense  the  improved  lands  become  more 
divided  and  the  average  size  of  the  holdings  is  smaller.  We  see  this 
going  on  in  every  state.  The  effect  of  this  diminution  in  the  average 
size  of  the  farms  upon  agricultural  production  is  not  as  simple  as  might 
at  first  seem,  and,  owing  to  the  special  conditions,  the  evils  resulting 
from  extreme  subdivision  in  some  portions  of  the  Old  World  do  not 
exist  here,  where  the  subdivision  has  nowhere  reached  any  such 
figures  as  it  has  there.  At  the  census  of  1870  the  least  average  size 
of  the  farms  in  the  chief  grain-growing  states  was  over  100  acres, 
while  the  arguments  that  are  so  often  quoted  against  subdivision 
in  the  Old  World  apply  mostly  to  farms  of  from  2  to  15  acres.  In 
all  of  the  states  growing  much  grain  a  farm  of  50  acres,  or  even  one  of 
80  acres,  is  called  a  "small  farm."  The  cases  of  France  and  Ireland 
are  most  frequently  cited  as  showing  the  evil  effects  of  extreme  sub- 
division in  the  Old  World,  but  neither  case  is  at  all  parallel  with  ours. 
In  both  countries  the  land  is  tilled  by  a  peasantry,  and  the  subdivision 
there  is  much  greater  than  here.  The  French  people  own  their  land, 
and  the  country  is,  as  a  consequence,  a  highly  productive  one.  The 
scale  of  farming  is  low,  the  animals  are  usually  of  poor  breeds,  but 
the  crops  are  good  and  of  excellent  quality.  It  is  in  the  production 
of  domestic  animals  and  in  the  use  of  labor-saving  machinery  that 
small  farming  stands  at  the  greatest  disadvantage.  In  America 
there  is  no  peasantry,  and,  moreover,  there  is  no  distinction  of  class 
among  land-owners.  The  small  owner  is  socially  equal  to  the  large 
owner,  the  only  difference  being  that  which  comes  from  a  difference 
of  wealth,  which  is  vastly  less  in  the  country  between  large  and 
small  farmers  than  in  the  cities  between  men  doing  a  large  business 
and  those  doing  a  small  business.  In  France  the  small  farmers  are 
peasants,  in  Ireland  not  only  peasants  but  tenants,  and  in  both  cases 
without  either  the  aspirations  or  the  incentives  which  a  small  American 
farmer  has.  The  difference  of  previous  history,  local  traditions,  and 
social  customs  is  so  great  that  no  parallel  can  be  drawn. 

The  difference  in  the  density  of  population  also  regulates  the  in- 


DEVELOPMENT  OF  AGRICULTURE  603 

tensity  of  the  farming.  Where  the  population  is  very  dense,  and 
must  be  fed  from  the  soil,  there  farming  must  be  intense,  no  matter 
how  much  it  costs,  or  the  people  will  starve.  In  this  country  the 
abundance  of  new  land,  and  the  ease  with  which  it  may  be  acquired, 
has  prevented  an  intense  farming.  It  is  this,  and  not  a  lack  of  either 
intelligence  or  of  enterprise,  that  gives  us  a  low  average  yield  of  grain 
per  acre,  compared  with  that  of  the  more  densely  populated  agricul- 
tural districts  of  Europe.  Wherever  it  pays  to  farm  more  intensely 
American  farmers  are  not  slow  to  see  it,  but  it  is  curious  to  see  how 
many  who  discuss  this  matter  entirely  ignore  the  great  natural  law 
that  as  the  methods  of  farming  become  more  and  more  intense  the 
increase  of  crop  is  not  proportionate  to  the  increase  of  cost  in 
producing  it. 

A  given  soil  will  easily  produce  a  certain  average  of  crop  with  a 
certain  amount  of  labor  and  expense.  We  may  increase  the  labor 
and  expense,  and  for  a  time  get  a  more  than  corresponding  increase 
of  crop.  If  we  continue  in  the  same  direction,  we  soon  reach  a 
point  beyond  which  the  increase  in  yield  is  not  proportionate  to  the 
increase  in  expense,  but  grows  less  and  less,  and  at  last  a  point  is 
reached  beyond  which  no  amount  of  additional  expense  will  increase 
the  average  yield.  In  short,  there  is  no  limit  to  the  expense  that 
may  be  applied  to  the  production:  there  is  a  limit  to  the 
average  yield,  and  even  to  the  possible  yield,  and  the  ratio  of  cost 
to  production  varies  all  along  the  line.  We  have  our  droughts  and 
our  mishaps,  but  our  less  intense  system  of  agriculture,  under  our 
system  of  land  tenure,  is  more  flexible,  and  can  stand  shocks  another 
system  might  not  sustain. 

The  agriculture  of  the  United  Kingdom  is  just  now  of  especial 
interest  to  us,  because  of  the  contrast  it  presents  with  ours,  the  agri- 
cultural distress  now  existing  there,  and  also  because  they  are  so 
largely  our  customers  and  feel  so  keenly  our  competition. 

The  system  of  land  tenure,  the  density  of  population,  and  the 
social  and  political  factors  involved,  slowly  brought  English  agricul- 
ture up  to  an  intensity  which  could  not  stand  the  pressure  of  the 
recent  bad  years.  It  had  too  many  fixed  points  in  it  to  meet  the 
emergency  and  stand  the  strain  while  adjusting  itself  to  new  condi- 
tions. Land  had  acquired  a  value  it  could  not  hold  —  no  new  thing 
of  late  years. 

A  similar  thing  has  happened  in  some  localities  in  New  England, 
where  many  farms  have  fallen  in  value  at  some  time  during  the  past 
thirty  years  as  much  as  in  the  worst  cases  in  England,  the  result  being 


604  READINGS  IN  ECONOMIC  HISTORY 

due  largely  to  western  competition.  But  here  the  land-owner  and 
the  farmer  are  one  and  the  same  person,  and  as  the  causes  were 
working  gradually  the  value  of  the  land  and  the  cost  of  production 
imperceptibly  readjusted  themselves  to  each  other.  This  new  adapta- 
tion went  on  slowly  by  a  perfectly  natural  process,  guided  only  by  the 
laws  of  production  and  of  markets.  There  was  decreased  profit 
during  the  change,  but  no  "distress,"  and  practically  no  bankruptcy. 
The  system  of  land  tenure  made  it  possible  and  easy  for  any  one 
dissatisfied  with  the  condition  to  sell  out,  if  he  chose,  at  any  time  on 
the  best  terms  that  offered  and  "go  West,"  if  he  wished,  before  bank- 
ruptcy befell  him,  and  give  way  to  some  one  else  who  could  and 
would  utilize  such  advantages  as  the  old  place  afforded.  All  this 
was  a  purely  economic  problem  for  each  one  to  work  out  for  himself. 
There  were  not  two  or  three  antagonistic  classes  in  interest  involved 
on  each  farm,  each  increasing  the  actual  loss  by  trying  to  crowd  so 
much  of  it  as  possible  on  the  other,  and  there  were  no  social  or  political 
factors  involved.  In  places  the  actual  effects  have  been  so  great 
that  lands  once  tilled  have  been  turned  back  again  into  woodlands, 
and  the  population  of  numerous  farming  towns  has  actually  decreased; 
but  this  has  gone  on  without  either  social  or  political  disturbance, 
the  laws  of  adaptation  pertaining  to  this  industry  have  been  free  to 
act,  and  the  problem  quietly  solves  itself. 

But  in  countries  where  farmers,  as  a  rule,  must  rent  the  land, 
and  two  different  classes,  economically  and  socially,  are  involved, 
whose  interests  are  antagonistic,  the  farmer  feels  the  pressure  first, 
because  he  has  not  perfect  freedom  to  adapt  his  methods  and  his 
production  to  varying  conditions  as  rapidly  as  the  conditions  them- 
selves vary.  The  agriculture  of  those  countries  will  adapt  itself  to 
the  new  condition  of  things  in  time,  because,  as  already  shown,  the 
industry  itself  will  not  and  cannot  be  killed.  It  will  shape  itself 
anew,  in  conformity  with  the  new  pressure  exerted  upon  it,  but  so 
long  as  the  present  difference  of  system  of  land  tenure  prevails  that 
now  exists  the  agriculture  competition  of  the  Mississippi  basin  must 
produce  very  different. effects  in  the  United  Kingdom,  France,  and 
Germany  from  those  produced  in  the  parts  of  the  United  States 
which  suffer  from  the  same  competition.  The  farmer  working  lands 
belonging  to  another,  by  methods  and  under  a  system  which  has 
regard  to  another's  interest  even  more  than  to  his  own,  and  on  a 
scale  of  intensity  fixed  in  previous  years  and  under  other  economic 
conditions,  without  that  absolute  freedom  to  manage  and  control 
his  own  business  in  such  ways  as  his  own  judgment  suggests  or  his 


DEVELOPMENT  OF  AGRICULTURE  605 

own  tastes  prompt,  must  work  at  a  disadvantage  in  competition 
with  another  farmer  who  has  this  freedom. 

Fixity  of  tenure,  the  right  to  hold  possession  so  long  as  the  pecuni- 
ary ability  or  the  taste  of  the  possessor  determines,  and  the  freedom 
to  sell  at  the  best  advantage  when  he  will  and  to  whom  he  will,  is 
another  element  the  political  and  social  effect  of  which  are  probably 
even  greater  than  the  economical  ones.  If  insecurity  of  tenure  be 
combined  with  great  subdivisions  of  land,  then  we  see  the  worst 
effects,  of  which  Ireland  is  a  conspicuous  example.  .  .  . 

The  economic  phase  of  our  system  of  land  ownership  which  most 
directly  and  immediately  affects  grain  production,  the  one  which  has 
been  so  much  dwelt  upon,  is  the  perfect  freedom  the  system  gives 
the  American  farmer  to  adapt  his  methods  to  suit  his  own  special 
conditions  and  to  specialize  his  productions  as  best  suit  his  own 
tastes.  .  .  . 

The  relation  which  this  industry  bears  to  the  political  system  of 
the  country  is  no  less  important  than  the  immediately  economical 
ones,  for  agriculture  and  land  tenure  bear  peculiar  and  special  rela- 
tions to  social  progress  and  political  stability.  From  the  nature  of 
the  vocation  its  problems  must  always  be  specially  related  to  political 
problems  and  its  progress  to  political  progress. 

B.   Farm  Tenancy  in  the  South,  1902  1 

Considerable  attention  has  been  directed  to  farm  tenancy,  particularly  in 
the  south.  There  greater  changes  have  occurred  than  in  the  north,  owing  to  a 
change  in  the  character  of  the  workmen.  The  large  plantations  of  ante-bellum 
days  have  been  broken  up,  and  in  the  place  of  slaves  directed  by  overseers  there 
now  stands  a  large  group  of  free  negro  tenant-farmers.  The  status  of  tenant- 
farmers  in  that  region  has  been  described  as  follows: 

It  is  stated,  on  apparently  good  authority,  that  in  the  cotton 
counties  around  Dallas,  Waco,  and  the  bottoms  of  the  Brazos  River, 
Texas,  75  per  cent  of  the  best  cotton  land  is  owned  by  men  who  live 
in  large  towns,  and  is  farmed  by  a  poor  and  shiftless  class  of  whites 
and  negroes  who,  under  the  strict  and  unceasing  supervision  of  the 
owner,  or  his  agent,  generally  make  for  the  owner  a  handsome  profit 
upon  the  present  valuation.  The  cotton  planter  with,  say,  2,000 
acres  of  fertile  land  divides  it  into  tracts  varying  from  50  to  100  acres 
each.  Each  tract  is  fenced  and  improved  to  the  extent  of  a  house, 
barn,  and  corncrib.  This  tract  is  leased  for  a  year,  beginning  with 

1  Final  Report  of  the  Industrial  Commission.  (Washington,  1002),  Volume 
XIX  of  the  Commission's  Report,  97-9. 


6o6  READINGS  IN  ECONOMIC  HISTORY 

January  i.  Although  the  planters  prefer  that  the  tenants  should 
furnish  their  own  stock,  implements,  and  seed,  it  is  difficult  to  find 
renters  who  are  sufficiently  well  equipped  or  have  enough  capital  tc 
take  the  land  on  such  terms.  In  nearly  every  case  the  landlord  is 
expected  to  furnish  everything,  including  food  and  clothing  for  the 
family,  until  such  time  as  the  crop  is  harvested  and  sold. 

The  system  of  overseeing  by  the  agent  of  the  landowner  is  usually 
such  as  to  enforce  the  rights  of  the  owners  in  keeping  the  stock  and 
implements  from  abuse  or  neglect.  Nevertheless,  this  system  of 
absenteeism  has  the  seeds  of  economic  self-destruction  in  it.  A  sys- 
tem of  supervision  does  not  develop  but  destroys  efficiency  on  the 
part  of  the  tenant.  The  general  disposition  is  to  lay  everything  tc 
the  shiftlessness  of  the  renters.  On  the  other  hand,  it  is  stated  by 
one  of  the  leading  planters  in  McLennan  County,  Tex.,  that  a  prof 
erly  conducted  cotton  farm  in  the  neighborhood  of  Waco  will  pa} 
from  30  to  50  per  cent  upon  its  valuation.  This,  however,  require 
the  strictest  attention  to  detail  and  very  strict  handling  of  the  people 
who  till  the  soil.  He  states  that  of  about  1,300  farmers  in  McLennan 
County  over  1,200  are  tenant  farmers.  There  is  a  general  tendenc) 
on  the  part  of  landlords  to  increase  the  size  of  their  holdings,  and  the 
men  who  already  have  the  land  and  money  are  more  apt  to  absorb 
adjacent  tracts  than  they  are  to  allow  the  tenant  to  buy  land.  The 
German  farmers  in  this  portion  of  the  country  appear  to  be  prosper- 
ous, and  are  noted  for  remaining  a  much  longer  time  on  the  same 
farm  as  renters,  usually  several  years  elapsing  before  a  change  is  made. 
One  German  tenant  is  cited  who  rented  the  same  piece  of  ground 
from  the  same  landlord  for  13  years,  and  left  him  because  the  land- 
lord would  not  sell  him  the  farm  which  he  had  cultivated  and  in 
which  he  desired  to  put  his  savings.  It  appears,  therefore,  that  it 
is  sometimes  difficult  for  renters  to  obtain  land,  even  when  they  have 
the  means  to  pay  for  it. 

When  the  planter,  in  many  parts  of  the  Southern  States,  leases  his 
ground  and  furnishes  nothing  to  make  a  crop,  he  receives  one-third 
or  one-fourth  of  the  crop.  Cash  rental  is  the  exception  rather  than 
the  rule.  Where  the  planter  furnishes  the  live  stock,  implements, 
and  supplies,  he  gets  one-half  of  the  cotton  and  one-half  of  the  corn, 
and  deducts  from  the  renter's  share  of  the  crop  money  an  amount 
sufficient  to  pay  liberal  prices  for  all  supplies  furnished  and  liberal 
interest  on  the  money.  The  result  of  this  system  is  that  the  renters 
rarely  ever  succeed  in  laying  by  a  surplus.  On  the  contrary,  their 
experiences  are  so  discouraging  that  they  seldom  remain  on  the  same 


DEVELOPMENT  OF  AGRICULTURE  607 

farm  for  more  than  a  year.  They  are  not  only  unable  to  lay  by  any 
money,  but  their  children  remain  uneducated  and  half  clothed.  The 
system  is  apparently  one  of  the  most  undesirable,  so  far  as  its  effect 
on  the  community  is  concerned,  without,  of  course,  implying  any 
questionable  motive  to  the  owner  of  the  land.  The  landowner  him- 
self is  not  necessarily  at  fault.  He  is  obliged  to  be  liberal  in  furnish- 
ing supplies  and  stock  to  the  tenant,  whose  manner  of  using  these 
resources  may  be  the  most  wasteful.  During  unfavorable  years,  the 
profit  may  wholly  disappear  or  leave  a  deficit  in  his  account,  so  that 
during  favorable  years  it  is  necessary  to  make  good  the  loss. 

The  tenant  system  or  crop-sharing  system,  which  seems  to  be  the 
prevailing  feature  of  land  tenure  throughout  the  cotton  belt,  is  not 
regarded  as  an  advantageous  arrangement  between  the  tenants  and 
landlords,  but,  on  the  contrary,  would  be  gladly  gotten  rid  of  for  a 
better  system  if  the  conditions  permitted  it.  Where  the  tenant 
system  prevails,  the  tenant  is  furnished  with  a  house,  water,  fuel, 
pasturage  for  his  stock,  a  share  of  the  fruit  on  the  place,  a  garden, 
a  shelter  for  stock,  and  storage  for  crops.  The  crop  is  in  some  cases 
divided  as  follows:  One-fourth  of  the  cotton,  one- third  of  the  corn, 
and  one-half  of  the  small  grain  goes  to  the  landlord,  the  balance  to 
the  tenant,  the  landlord  furnishing  the  land  and  stock  and  his  share 
of  the  fertilizers.  Under  this  system  the  crop,  to  a  great  extent, 
and  the  land,  generally,  are  apt  to  be  neglected.  The  tenant  is  desir- 
ous of  expending  as  little  labor  as  possible  and  the  landlord  of  getting 
the  largest  crop  return.  The  permanent  value  of  the  land  is  apt 
to  be  sacrificed  for  lack  of  competent  supervision,  and  deterioration 
of  the  property  in  general  is  quite  certain  to  grow  at  a  more  rapid 
rate  than  under  a  different  system  of  occupancy.  The  renter  has 
little  or  no  interest  in  the  maintenance  of  permanent  improvements. 
This  is  especially  true  where  the  contract  is  made  for  a  year  at  a  time, 
admitting  of  frequent  changes  of  tenants  and  enabling  them  to  evade 
the  responsibilities  of  careful  management  and  methods  of  cultivation. 
Consequently  both  the  permanent  improvements  and  the  quality  of 
the  soil  deteriorate  under  this  system.  The  tenant  is,  furthermore, 
at  a  disadvantage  in  exchanging  his  crop  for  family  supplies.  He 
sells  his  corn  at  the  lowest  price  to  the  country  merchant  from  whom 
he  gets  his  provisions  in  exchange,  paying  the  highest  price  the  country 
merchant  sees  fit  to  demand.  This  same  corn  which  is  sold  early  in 
the  fall  may  have  to  be  bought  back  from  the  country  merchant  by 
the  tenant  late  in  the  winter  at  from  50  to  100  per  cent  advance.  The 
economic  effects  of  such  a  system  are  to  the  disadvantage  of  the 


6o8 


READINGS  IN  ECONOMIC  HISTORY 


tenant  in  both  transactions,  both  as  a  producer  and  a  consumer,  and 
no  system  of  such  a  character  has  in  the  history  of  agriculture  ever 
led,  if  uncorrected,  to  anything  but  failure. 

III.   AGRICULTURE  AND  LABOR 

A.    Workers  in  Agriculture,  1850-1910  1 

Although  the  number  of  persons  engaged  in  agriculture  increased  almost  six- 
fold during  the  period  1850-1910,  the  relative  number  decreased.  In  1850  almost 
one-half  the  persons  engaged  in  gainful  occupations  were  on  the  farms,  while  in 
1910  less  than  one- third  of  them  were  so  engaged. 


Percentage  of 

Census 
Year 

Population 

Number  of 
Persons  in  all 
Pursuits 

Number  of 
Persons  in 
Agricultural 

Total 
Popula- 

Occupied 
Popula- 

(a) 

tion 

tion  in 

Occupied 

Agricul- 
ture 

1850 

23,191,876 

5,371,876  (b) 

2,406,731 

23.2 

44.8 

1860 

3i,443,32i 

8,287,043  (c) 

3,343,328 

26.4 

40.4 

1870 

38,558,371 

12,505,923  (d) 

5,922,335 

32-4 

47-4 

1880 

50,155,783 

17,392,099  (d) 

7,669,432 

34-7 

44.1 

1890 

62,947,714 

22,735,661  (d) 

8,463,365 

36.1 

37-2 

1900 

75,994,575 

29,073,233  (d) 

10,268,138 

38.3 

35-3 

1910 

91,972,266 

38,167,336  (d) 

12,373,159 

4i-5 

32-4 

(a)  Exclusive  of  lumbermen,  raftsmen,  woodchoppers,  apiarists,  fishermen, 
oystermen,  foresters,  owners  and  managers  of  log  and  timber  camps,  and  those 
engaged  in  other  agricultural  and  annual  husbandry  pursuits,  so  far  as  sepa- 
rately reported,  (b)  Free  males  over  fifteen  years  of  age.  (c)  Free  males  and 
females  over  fifteen  years  of  age.  (d)  Males  and  females  over  ten  years  of  age. 

B.   Foreigners  in  American  Agriculture,  1899  2 

Contrary  to  popular  opinion  many  of  what  are  usually  called  the  "  later 
immigrants "  have  gone  into  agriculture.  The  character  and  extent  of  this 
movement  is  indicated  in  the  following  extract: 

The  overflow  of  foreign-born  population  in  the  cities  has  turned 
attention  recently  to  the  cultivation  of  land  as  a  field  for  immigrants 

1  Adapted  from  the  Census  Reports,  1850-1910,  by  Dr.  Charles  L.  Stewart,  of 
the  University  of  Illinois. 

2  Final   Report  of   the    Industrial   Commission  (Washington,  1902),   Volume 
XIX  of  the  Commission's  Report,  49-54. 


DEVELOPMENT  OF  AGRICULTURE  609 

to  the  United  States.  Among  the  most  successful  nationalities  are 
the  Italians.  Most  of  them,  in  southern  Italy  especially,  have  been 
trained  in  the  methods  of  intensive  agriculture.  One  drawback 
hitherto  has  been  the  absence  of  any  village  system  of  living  on  the 
part  of  the  rural  population  of  the  United  States,  such  as  characterizes 
agricultural  society  in  Italy,  Hungary,  and  through  many  portions 
of  Germany  and  France.  Where  systematic  efforts  have  been  made 
under  the  colonizing  principle,  many  communities  of  farmers  have 
been  established  in  the  United  States.  Among  these  may  be  noted, 
first,  the  Italian  colony  at  Vineland,  N.  J.  These  foreigners  brought 
with  them  the  knowledge  of  grape  culture  and  wine  manufacture; 
but  afterwards,  finding  that  truck  farming  and  the  cultivation  of  sweet 
potatoes  were  more  profitable,  the  grape  industry  became  a  less  im- 
portant feature  of  the  colony's  activity. 

Another  colony  of  the  same  nationality,  comprising  about  500 
persons,  has  flourished  in  Brazos  County,  Tex.  There  the  industry 
is  rice  and  truck  farming.  Throughout  Texas  there  are  many  Italian 
cotton  planters,  as  well  as  grape  growers.  In  the  Brazos  County 
colony  the  inducement  of  cheap  land  was  the  cause  of  locating  after 
the  immigrants  had  finished  work  upon  a  local  branch  of  a  railroad, 
for  the  grading  of  which  they  had  been  imported.  At  Asti  a  colony 
of  that  name,  on  the  cooperative  plan,  has  been  in  very  successful 
operation  for  fully  16  years.  It  is  reported  in  the  Italian  Chamber  of 
Commerce  at  San  Francisco,  that,  of  the  45,625  Italians  living  in  56 
counties  of  California,  almost  all  were  engaged  in  agriculture;  they 
owned  2,726  farm  properties.  In  the  vicinity  of  Denver  and  Pueblo, 
Colo.,  Salt  Lake  City,  Utah,  and  Cheyenne,  Wyo.,  truck  farming 
has  been  quite  generally  in  the  hands  of  Italians.  Likewise  in  the 
vicinity  of  New  Orleans  and  at  Memphis,  Tenn.,  where  there  are  50 
Italian  truck  farmers  who  emigrated  from  the  valley  of  the  Po,  in 
northern  Italy,  and  at  Daphne,  Baldwin  County,  Ala.,  there  are 
regularly  established  sections  or  communities  of  foreigners  engaged  in 
agriculture.  As  a  rule,  the  Italians  take  small  tracts  of  land,  and  pre- 
fer to  remain  in  close  contact  with  neighbors  of  their  own  nationality. 
There  are  very  few  Italian  farmers  in  the  New  England  States. 

Bohemians,  though  a  rural  people  in  Europe,  have  less  frequently 
taken  to  the  cultivation  of  the  soil  in  the  United  States.  The  reasons 
assigned  are,  first,  inadequate  capital;  second,  cost  of  travel  from  the 
seaports  to  the  interior,  and,  equally,  the  lonesomeness  of  farm  life  in 
comparison  with  the  village  life  to  which  they  have  been  accustomed 
in  Bohemia.  Bohemian  farmers  in  individual  households  have, 


6io  READINGS  IN  ECONOMIC  HISTORY 

however,  been  very  prosperous  in  Ohio,  Nebraska,  Texas,  and  Wis- 
consin. They  rarely  come  as  farm  laborers,  but  are  prepared  to  buy 
land  and  develop  it.  A  Finnish  colony  has  been  located  in  Hick- 
man  County,  Tenn.,  with  satisfactory  results. 

Attempts  at  inducing  the  Jewish  portion  of  the  foreign  population 
to  engage  in  agriculture  have  not  been  generally  successful.     The 
most  favorable  example  is  that  at  Woodbine,  in  the  southern  portion 
of  New  Jersey,  below  Camden.     Difficulties  of  clearing  land,  unsuit- 
able soil  for  certain  crops,  the  lack  of  capital,  and  absence  of  market 
here  made  themselves  felt,  until  it  was  found  necessary  to  supplement 
agriculture  by  the  smaller  manufactures,  at  which  the  populatior 
might  occupy  itself.     At  the  present  time  40  per  cent  of  the  i,4c 
people  at  Woodbine  are  engaged  in  agriculture  and  60  per  cent  in  othe 
pursuits.     Russo- Jewish  farmers  in  Connecticut  have  been  especiall) 
successful,  first,  because  of  their  taking  farms  already  in  a  fair  state  of 
cultivation,  and  second,  because  of  the  favorable  markets  within  eas) 
reach.     Likewise  Jewish  farmers  have  succeeded  in  the  vicinity  of 
New  Brunswick,  New  Jersey,  and  other  localities  and  adjacent  citie 
clustered  around  the  mouth  of  the  Hudson. 

In  the  several  States  foreign  whites  have  made  different  degree 
of  progress  and  contributed  variously  to  the  agricultural  development 
of  the  United  States.  A  thriving  colony  of  Swedes  is  established 
a  new  township  called  New  Sweden,  in  Aroostook  County,  Me.  This 
started  with  50  colonists  directly  from  Sweden  in  1870,  and  the  com- 
munity now  numbers  about  1,500  people  of  the  most  estimable  char- 
acter, residing  in  several  townships  of  this  county.  Maine  also 
one  or  more  small  colonies  of  Finns,  and  a  colony  of  Jews.  In 
Hampshire  the  advertisement  of  the  32,000  so-called  abandoned  fan 
in  1890  led  to  the  arrival  of  a  number  of  foreigners  who  became  farr 
owners.  In  Cheshire  County,  Polish  labor  is  the  main  reliance. 
There  are  also  some  French  Canadians.  Vermont  is  represented 
Canadian  French,  Swedes,  Norwegians,  and  Poles,  especially  during 
haying  and  harvesting.  Scandinavian  labor  usually  comes  fror 
Sweden  and  Norway  direct.  Laborers  are  engaged  through  employ- 
ment agencies  at  the  immigration  station,  in  some  cases  by  grouj 
of  farmers  who  divide  them  up  among  themselves  in  the  busy  seasons. 

In  Massachusetts  the  Poles  have  come  in  very  rapidly  in  the  past 
ten  years,  especially  in  the  Connecticut  Valley.  In  the  market 
gardens  around  Boston  many  French  Canadians  are  employed.  In 
the  Cape  section  Portuguese  are  abandoning  fishing  and  going  ontc 
the  farms.  In  Rhode  Island  conditions  are  somewhat  similar  tc 


DEVELOPMENT  OF  AGRICULTURE  611 

those  in  eastern  Massachusetts.  In  Connecticut  the  Irish  of  the 
second  generation  are  farm  owners,  and  the  Italians,  Swedes,  and 
Poles  perform  field  labor  very  satisfactorily.  As  a  rule  the  Irish 
and  Germans  are  among  the  independent  farmers.  In  New  York 
German  and  Dutch  labor  is  quite  common,  while  Poles,  Swedes, 
Russians,  and  Hungarians  are  scattered  in  different  sections.  In  New 
Jersey  foreign  farmers  are  mainly,  as  in  Connecticut,  Irish  and  German, 
while  Italians  are,  as  mentioned  above,  of  increasing  importance.  In 
Pennsylvania  the  foreign  population  in  agriculture  is  mainly  German, 
but  in  the  coal  regions  Poles,  Irish,  and  Italians  are  gradually  becoming 
a  more  important  element  in  agriculture.  In  Ohio  the  prevailing 
foreign  element  is  still  German,  especially  in  southern  Ohio,  and  a 
high  standard  of  educational  attainment  is  frequently  found  among 
them. 

In  Indiana  German  farmers  are  noted  in  the  southern  counties, 
though  there  are  few  of  this  nationality  in  northern  Indiana.  For- 
eign farm  laborers  through  central  Illinois  are  usually  Germans, 
Danes,  and  Swedes  of  a  highly  intelligent  class.  In  Michigan  there 
are  many  colonies  of  foreigners.  Among  them  are  to  be  noted  the 
Dutch,  Finns,  Danes,  and  Norwegians.  Germans  are  scattered  over 
the  State  in  smaller  groups,  and  there  are  many  French  Canadians 
who  came  in  originally  as  lumbermen.  The  sugar-beet  industry  has 
led  to  the  arrival  of  Germans,  Polanders,  and  Russians,  who  prove 
themselves  most  efficient.  In  Wisconsin  Germans  and  Scandinavians 
have  proved  more  successful  than  the  American  born  as  farmers. 
Most  of  the  foreigners  are  Germans  and  Norwegians.  Land  companies 
have  been  quick  to  recognize  this  and  have  made  special  offers  to 
induce  immigration. 

Polish  people  have  been  settled  in  the  northern  counties  of  Michi- 
gan under  land-company  auspices.  These  people  have  been  brought 
principally  from  Indiana  and  the  mining  regions  of  Illinois  and  Penn- 
sylvania. Another  land  company  at  work  in  settling  the  land  in 
northern  Wisconsin  has  sent  71  families  into  a  single  county,  most  of 
which  were  gathered  from  Western  towns  and  the  coal  regions  of 
Pennsylvania.  Wisconsin,  it  is  said,  probably  contains  a  greater 
variety  of  foreign  groups  than  any  other  American  State.  Many  of 
these  groups  occupy  whole  townships  and  control  the  entire  social 
policy  of  these  communities.  The  Germans,  for  example,  number 
75  per  cent  of  the  population  of  Taylor  County,  65  per  cent  of  Dodge 
County,  and  55  per  cent  of  Buffalo  County.  The  Bohemians  consti- 
tute three-sevenths  of  the  population  of  Kewaunee  County. 


612  READINGS  IN  ECONOMIC  HISTORY 

In  Minnesota  German  farmers  and  farm  laborers  have  been  found 
to  be  most  effective,  but  the  various  European  nationalities  are  widely 
distributed,  though  not  so  numerously  as  in  Wisconsin.  Missouri 
includes  among  its  foreign  farmers  Germans,  Irish,  Scandinavians, 
and  French,  representatives  of  which  are  found  in  many  counties. 
In  North  Dakota  foreign  farmers  are  to  be  found  in  every  agricultural 
county,  representing  as  many  as  fourteen  or  fifteen  different  nation- 
alities. In  South  Dakota  conditions  are  very  similar,  especially  in 
the  northwestern  part  of  the  State.  Foreign  farmers  and  farm  laborers 
are  found  everywhere  in  Kansas,  Germans  being  most  in  evidence  and 
Swedes  next  in  order.  In  Ellis  county  it  is  said  that  more  than  one- 
half  are  foreigners,  most  of  whom  are  Russians.  A  very  large  pro- 
portion of  the  land  sales  of  the  Union  Pacific  Railroad  in  this  State 
was  made  to  English,  Swedish,  Germans,  and  Russians. 

Nebraska  shows  a  variety  of  highly  prosperous  foreign  farmers. 
The  railroad  companies  sold  largely  to  Germans,  Swedes,  Bohemians, 
and  Russian  Germans.  The  sugar-beet  companies  and  the  cattle 
companies  employ  large  numbers  of  foreigners.  In  the  Southern 
States  the  superabundance  of  cheap,  unskilled  labor  has  militated 
against  the  foreigners  getting  a  foothold  in  agriculture.  This  is 
probably  one  main  reason,  if  not  the  chief  reason,  for  the  failure  of 
foreign  whites  to  seek  agricultural  opportunities  hi  the  South.  Fur- 
thermore, the  absence  of  cash  payment  for  wages  is  another  drawback. 
Delaware  furnishes  an  instance  of  many  Germans  who  began  as  farm 
laborers,  but  are  now  independent  farmers.  While  negro  labor  is 
principally  employed,  Germans  and  Swedes  and  other  foreigners  are 
frequently  preferred,  but  are  not  to  be  had  hi  sufficient  numbers. 

In  Maryland  special  efforts  have  been  made  to  induce  foreign 
whites  to  take  up  land.  As  a  result  of  this  policy  many  families  of 
Germans,  Dutch,  and  Swedes  have  settled  there.  Many  who  came 
as  laborers  in  a  few  years  acquired  land  of  their  own,  and  are  now 
prosperous  farmers.  In  Virginia  some  Germans  and  English  farmers 
have  settled  in  Albemarle  County,  which  is  a  well-known  fruit  section. 
Italians  are  found  in  large  trucking  districts  near  Norfolk.  German 
colonists  have  been  successfully  engaged  in  agriculture  at  Ridge- 
way,  N.C.,  for  the  past  seventeen  years.  A  colony  of  some  40  fami- 
lies, which  settled  near  Morganton,  in  the  western  part  of  that  State, 
has,  after  many  struggles,  attained  to  a  highly  creditable  degree  of 
prosperity.  In  Mississippi  foreign  farmers  are  mainly  Germans  and 
Swedes,  with  a  few  Irish.  In  Louisiana  German  farmers  are  credited 
with  having  first  cultivated  rice  for  commercial  purposes.  In  some  of 


DEVELOPMENT  OF  AGRICULTURE  613 

the  southern  parishes  there  are  Germans,  Italians,  and  Swedes  engaged 
in  farming,  and  Italians  are  numerous  as  farm  laborers  on  large  sugar 
plantations,  to  which  they  come  annually  during  the  busy  season,  both 
from  Europe  and  from  different  parts  of  the  United  States. 

In  Texas  the  colonists  located  at  Brunfels  are  especially  remark- 
able hi  their  influence  over  agriculture,  inasmuch  as  in  their  methods 
of  cultivation  they  have  avoided  the  exhaustive  system  of  farming  and 
maintained  the  fertility  of  the  soil  as  the  fundamental  principle  of 
their  farm  policy.  Much  of  the  expansion  in  the  trucking  industry 
in  the  vicinity  of  San  Antonio  is  due  to  these  farmers.  In  Arkansas 
German  farmers  rank  as  first  class.  They  have  to  be  credited  here 
with  great  skill  as  .gardeners,  truck  farmers,  and  in  diversified  farming 
generally. 

In  Colorado  Italians  appear  to  be  taking  the  lead  in  truck  gardening 
in  the  vicinity  of  cities.  In  Arizona  there  are  many  Scandinavian 
farmers  of  considerable  wealth.  In  Utah  small  farms,  the  feature  of 
the  State's  agriculture,  are  owned  by  families  that  cultivate  them. 
Many  of  these  properties  are  in  possession  of  English,  German,  Scan- 
dinavian, Swiss,  and  Dutch  farmers,  and  here  again  the  Italian  truck 
farmers  are  prominent  in  the  vicinity  of  the  leading  cities  of  the  State. 
In  Oregon  in  certain  localities  two-thirds  of  the  farmers  are  Germans, 
though  other  nationalities,  such  as  Scandinavians,  Swiss,  Dutch, 
English,  Scotch,  and  Irish,  are  to  be  found.  Many  who  started 
poor  are  now  independent.  Farm  labor  is  mostly  foreign.  In  Cali- 
fornia Germans  and  Swedes  are  found  widely  distributed.  In 
Eldorado  County,  Cal.,  foreign  farmers  are  mostly  Portuguese  and 
engaged  in  fruit  growing. 

IV.  PROGRESS  IN  AGRICULTURE 

A.    Land  Values,  Equipment,  and  Number  of  Farms,  1850-1900  l 

The  half-century  from  1850  to  1900  was  one  of  rapid  agricultural  expansion. 
During  that  time  millions  of  acres  of  wild  lands  were  brought  under  cultivation, 
agricultural  implements  were  improved,  and  markets  brought  closer  together  by 
improved  means  of  transportation. 

The  census  of  agriculture  of  1850  reported  1,449,073  farms,  and 
that  of  1900,  5,739,657,  an  addition  in  fifty  years  of  4,290,584  farms, 
or  nearly  three  times  as  many  as  had  been  established  in  the  preceding 
two  hundred  and  fifty  years  of  settlement.  The  same  period  wit- 

1  Twelfth  Census,  igoo.  Agriculture  (Washington,  1902),  V,  xvi,  xviii-xix, 
xxi,  xxiv-xxv,  xxvii-xxxi. 


614  READINGS  IN  ECONOMIC  HISTORY 

nessed  an  increase  in  national  population  from  23,191,876  to  76,303,- 
387,  and  in  that  of  cities  with  8,000  inhabitants  and  over,  from 
2,897,586  to  25,031,505.  Notwithstanding  this  unprecedented  growth 
in  urban  population,  the  increase  in  the  number  of  farms  was  relatively 
greater  than  that  in  population,  being  in  the  ratio  of  4  to  3.3.  In 
1850  there  was  i  farm  for  every  16  persons  in  the  United  States;  in 
1900  there  was  i  for  every  13.3  persons.  In  proportion  to  population, 
therefore,  there  were  6  farms  in  1900  where  there  were  only  5  in  1850, 
representing  an  addition  of  i  farm  for  every  12.4  persons  added  to  the 
national  population. 

If  only  the  population  outside  of  cities  with  8,000  inhabitants  and 
over  be  considered,  the  following  figures  are  obtained:  In  1850  there 
was  i  farm  for  every  14  of  the  20,294,290  persons  composing  this 
population,  while  in  1900,  when  the  corresponding  population  was 
51,271,882,  there  was  i  farm  for  every  8.9  persons.  In  proportion 
to  the  nonurban  population,  there  were  7  farms  in  1900  where  there 
were  only  4  in  1850,  representing  the  establishment  of  i  farm  for 
every  7.2  persons  added  to  the  population  outside  of  cities  of  8,000 
inhabitants  and  over  Compared  with  the  nonurban  population 
there  were  nearly  twice  as  many  farms  established  during  these  fifty 
years  as  in  the  period  between  the  settlement  of  Jamestown  and  the 
middle  of  the  Nineteenth  century.  This  large  actual  and  relative 
increase  in  the  number  of  farms  since  1850  is  a  fact  of  great  social 
importance,  and  is  reflected  in  all  the  statistics  of  agriculture.  .  .  . 

The  North  Atlantic  states,  with  the  exception  of  Maine  and  Rhode 
Island,  reported  more  farms  in  1900  than  ten  years  before.  The 
gain  in  New  Jersey  was  12.4  per  cent;  in  Massachusetts,  9.7  per  cent; 
in  Pennsylvania,  6.0  per  cent;  in  Connecticut,  2.3  per  cent;  in  Ver- 
mont, 1.6  per  cent;  in  New  Hampshire,  0.6  per  cent;  and  in  New 
York,  0.2  per  cent.  The  number  of  all  farms  in  the  division  increased 
2.9  per  cent,  while  in  the  preceding  decade  it  decreased  5.4  per  cent. 
Between  1880  and  1890  the  number  of  farms  decreased  by  37,570, 
losses  having  occurred  in  every  state  in  the  division  except  Penn- 
sylvania and  New  Jersey,  leaving  a  net  loss  between  1880  and  1900 
of  18,633. 

In  all  the  South  Atlantic  states,  except  Virginia  and  the  District 
of  Columbia,  the  number  of  farms  reported  has  increased  in  every 
decade  since  1850.  The  exception  in  the  case  of  Virginia  was  caused 
by  the  formation  from  a  part  of  its  territory  of  the  state  of  West 
Virginia  in  1863.  From  1890  to  1900  the  per  cent  of  increase  in , 
Virginia,  West  Virginia,  and  North  and  South  Carolina  was  consider- 


DEVELOPMENT  OF  AGRICULTURE  615 

able.  The  rate  of  gain  was  smallest  in  Delaware,  where  it  was  barely 
3  per  cent. 

The  number  of  farms  reported  from  the  North  Central  division 
in  1900  was  14.2  per  cent  greater  than  in  1890.  Each  of  the  12 
states  in  that  division  showed  an  increase,  the  greatest  percentages 
of  gain  being  in  North  Dakota,  Minnesota,  Missouri,  Michigan,  and 
Wisconsin.  In  all  these  states,  except  Missouri,  the  increase  was 
due  principally  to  the  opening  of  new  farms  on  the  virgin  prairie,  or  on 
cleared  forest  lands.  In  Missouri  the  increase  was  largely  caused 
by  a  sub-division  of  some  of  the  large  farms. 

In  the  South  Central  division  the  number  of  farms  added  in  the 
last  ten  years  was  twice  as  great  as  in  the  largest  agricultural  division, 
the  North  Central,  and  the  per  cent  of  increase  in  the  former  division 
was  nearly  four  times  as  great  as  in  the  latter,  and  over  twice  that 
for  the  United  States.  As  no  farms  were  reported  for  Indian  Terri- 
tory in  1890,  the  per  cent  of  increase  in  the  decade  can  not  be  expressed 
for  that  territory.  Among  the  other  states  and  territories,  the  great- 
est percentages  of  gain  are  shown  in  Oklahoma,  Louisiana,  Mississippi, 
and  Texas,  in  the  order  mentioned. 

The  number  of  farms  has  increased  since  1890  in  every  state  and 
territory  in  the  Western  division,  the  per  cent  of  gain  for  the  group 
being  somewhat  greater  than  that  for  the  South  Central.  In  this, 
as  in  the  South  Central  division,  a  part  of  the  increase  marks  the 
opening  of  new  farms,  and  a  part,  the  inclusion  of  the  ranches  using 
the  public  domain,  which  had  not  previously  been  enumerated  as 
farms.  It  is  impossible,  from  the  data  available,  to  determine  the 
actual  and  relative  increase  in  the  number  of  separate  agricultural 
establishments  in  the  several  states  and  territories  of  these  two  di- 
visions. The  publication,  by  states  and  territories,  of  the  statistics 
of  occupation  and  of  tenure  of  farm  families,  as  compiled  by  the  popu- 
lation division,  will  furnish  data  for  a  trustworthy  conclusion  on  this 
subject. 

In  1850  New  York  reported  170,621  farms,  the  largest  number  of 
any  state.  Only  two  other  states  reported  over  100,000.  They  were 
Ohio,  143,807,  and  Pennsylvania,  127,577. 

In  1900  fifteen  states  reported  over  200,000  farms,  as  follows: 
Texas,  352,190;  Missouri,  284,886;  Ohio,  276,719;  Illinois,  264,151; 
Kentucky,  234,667;  Iowa,  228,622;  New  York,  226,720;  Georgia, 
224,691;  North  Carolina,  224,637;  Tennessee,  224,623;  Pennsylvania, 
224,248;  Alabama,  223,220;  Indiana,  221,897;  Mississippi,  220,803; 
and  Michigan,  203,261.  .  .  . 


6i6 


READINGS  IN  ECONOMIC  HISTORY 


From  1850  to  1900  the  reported  area  of  farm  land  increased  from 
293,560,614  acres  to  841,201,546  acres.  The  new  land  opened  for 
agricultural  uses  was  547,640,932  acres,  or  nearly  twice  as  much  as 
that  converted  from  the  wilderness  into  farms  prior  to  the  middle 
of  the  century.  The  improved  land  hi  farms,  which  was  only 
113,032,614  acres  hi  1850,  advanced  to  414,793,191  acres  in  1900, 
an  increase  during  the  half  century  of  301,760,577  acres,  which 
increase  represents  nearly  three  times  the  area  under  improvement 
in  1850. 

The  productive  power  of  the  farm  naturally  increases  in  proportion 
to  the  increase  of  its  improved  area.  In  1850  the  farms  of  the  country 
not  only  supplied  the  people  with  food  and  with  most  of  the  raw 
material  for  clothing,  but  furnished  also  considerable  quantities  of 
products  for  export.  Since  that  time  the  crop-producing  area  has 
increased  so  much  faster  than  the  national  population  that  the 
country  now  supplies  its  people  with  more  and  better  food  and  with 
more  materials  for  clothing  than  ever  before,  and  at  the  same  time 
exports  agricultural  products  to  an  extent  that  was  impossible  until 
recent  years.  .  .  .  Had  the  area  of  unproved  land  increased  at  no 
greater  rate  than  the  national  population  (229  per  cent),  it  would 
have  been  only  371,877,300  acres,  or  42,915,891  acres  less  than  it 
actually  is.  All  this  surplus  area  is  available  for  the  production  of 
food  supplies  for  foreign  nations;  but,  in  fact,  owing  to  unproved 
methods  of  cultivation  and  to  the  occupation  of  more  fertile  soils, 
the  exportations  of  agricultural  products  from  this  country  have 
increased  in  even  greater  proportion,  and  now  have  an  annual  value 
nearly,  if  not  quite,  equal  to  one-half  that  of  the  total  production  of 
staples  in  1850.  This  is  evidenced  by  a  comparison  of  the  Treasury 
statement  of  exports  in  1899  with  the  census  crop  report  of  1849.  .  .  . 

AVERAGE  NUMBER  OF  ACRES  PER  FARM,  BY  GEOGRAPHIC  DIVISIONS: 
SUMMARY  1850  TO  1900 


Geographic  Divisions 

1900 

1890 

1880 

1870 

1860 

I^SO 

The  United  States  .  .  . 

146  6 

1^6  i 

J22      7 

IC-3     1 

IOQ    2 

2O2    6 

North  Atlantic  

06  ? 

QC     -2 

07.  7 

IO4.  3 

108  i 

112    6 

South  Atlantic  

108  4 

172.6 

IC7  .4 

241  .  1 

3^2   8 

3?6    4 

North  Central.         

TM  z 

12-2.4. 

121  .O 

123  .  7 

130  .  7 

143  •  3 

South  Central  

ice  .4 

I'M  ° 

I  5O.  6 

IQ4.4 

321  .  3 

2OI  .O 

Western  

^86.1 

324.  1 

312.  Q 

1^6.4 

366.0 

694.9 

DEVELOPMENT  OF   AGRICULTURE  617 

In  all  of  the  five  geographic  divisions,  with  the  exception  of  the 
North  Central,  the  increase  since  1850  in  the  number  of  farms  has 
been  relatively  greater  than  that  in  farm  area,  and  consequently  the 
average  size  of  farms,  with  the  exception  above  noted,  has  decreased 
during  the  same  period.  .  .  . 

For  the  United  States  the  average  size  of  farms  decreased  from 
1850  until  1880,  since  which  year  it  has  steadily  increased.  This 
was  true,  also,  in  the  North  Central  and  Western  divisions,  but  in 
the  North  Atlantic  states  there  was  a  decrease  until  1890,  a  gain 
being  shown  for  the  last  decade  only.  If,  however,  the  farm  acreage 
reported  at  the  census  of  1880  was,  as  has  been  estimated,  approxi- 
mately 2,500,000  acres  in  excess  of  the  actual  acreage,  the  average 
size  of  farms  in  this  division  was  smallest  in  1880  and  the  changes 
have  been  identical  in  time  and  character  with  those  for  the  United 
States.  In  the  South  Atlantic  division  there  was  a  constant  decrease 
from  1850  to  1900,  and  in  the  South  Central,  from  1860  to  1890.  The 
average  for  this  latter  group  was  greater  in  1860  than  in  1850,  and  in 
1000  than  in  1890.  .  .  . 

The  value  of  farm  property  in  1900  was  $20,514,001,838,  a  gain 
in  ten  years  of  $4,431,734,149,  or  considerably  more  than  the  total 
value  reported  fifty  years  before.  The  absolute  increase  in  value  for 
the  last  decade  did  not  greatly  differ  from  that  for  the  ten  years 
1850  to  1860,  which  was  $4,013,149,483,  or  from  that  for  1880  to 
1890,  which  was  $3,901,766,151.  The  percentages  of  gain  for  the 
three  periods,  however,  were  quite  different,  being  for  the  decade 
1850  to  1860,  101.2  per  cent;  1880  to  1890,  32.0  per  cent;  and  for  the 
last  decade,  27.6  per  cent. 

In  the  North  Atlantic  states  the  total  value  of  farm  property 
increased  during  each  decade  from  1850  until  1880,  since  which  year 
it  has  decreased.  The  greatest  increase  reported  was  for  the  ten 
years  from  1850  to  1860.  This  decade  witnessed  the  largest  per  cent 
of  gain  in  all  the  geographic  divisions. 

In  the  South  Atlantic  states  there  was  an  especially  great  increase 
from  1850  to  1860.  Then  followed  the  Civil  War  with  its  great  de- 
struction of  farm  prdperty,  and  from  this  disaster  most  of  the  states 
did  not  fully  recover  before  1890. 

The  South  Central  states  also  suffered  very  severely  from  the  Civil 
War,  and  notwithstanding  the  opening  up  of  vast  areas  of  new  land, 
did  not  recover  until  1890.  The  value  of  most  of  this  new  land  was 
so  low  that  the  gain  in  the  value  of  farm  property  during  the  last  decade 
did  not  keep  pace  with  the  increase  in  farm  area. 


6i8  READINGS  IN  ECONOMIC  HISTORY 

The  North  Central  states  have  made  large  gains  during  each  decade, 
and  over  one-half  of  the  increase  in  the  last  fifty  years  in  the  value 
of  all  farm  property  has  been  in  this  division. 

The  Western  states  have  made  remarkable  progress  in  each 
decade,  the  greatest  gain,  however,  occurring  in  the  period  from  1880 
to  1890. 

The  average  value  per  acre  of  all  farm  property  in  the  United 
States  increased  from  $13.51  in  1850  to  $25.81  in  1890.  In  1000  it 
was  $24.39,  the  decrease  being  due  to  the  extensive  additions  of  cheap 
land  in  the  West  and  South,  which  more  than  counterbalanced  the 
actual  increase  in  value  of  the  great  majority  of  American  farms. 
The  average  value  for  the  South  Central  states  reached  its  maximum 
in  1860,  that  for  the  North  Atlantic  and  Western  in  1890,  and  for  the 
South  Atlantic  and  North  Central  in  1900.  .  .  . 

The  Twelfth  Census  reports  a  total  capital  of  $9,874,664,087  in- 
vested in  manufactures.  Of  this  amount,  $1,030,190,003  represents 
the  value  of  land;  $1,456,983,130,  that  of  buildings;  $2,559,766,383, 
that  of  machinery,  tools,  and  implements;  and  $4,827,724,571,  that 
of  cash  and  sundries,  including  under  this  head  raw  materials,  stock 
in  process  of  manufacture,  finished  products  on  hand,  amounts  due 
from  the  sale  of  finished  products,  and  cash  on  hand. 

It  is  impossible  to  prepare  a  statement  of  the  capital  invested  in 
agriculture  to  correspond  exactly  with  the  foregoing  exhibit  for  manu- 
factures, as  the  only  forms  of  agricultural  capital  reported  by  the 
census  are  those  which  correspond  to  the  fixed  capital  of  manufactures, 
comprised  in  the  first  three  items  above  mentioned  and  aggregating 

$5>°46,939>5i°- 

The  fixed  capital  of  agriculture,  comprising  the  value  of  the  land, 
buildings,  and  improvements,  of  implements  and  machinery,  and  of 
live  stock,  was  valued,  June  i,  1900,  at  $20,514,001,838,  or  more  than 
four  times  that  of  manufactures.  Judged  by  the  standard  of  fixed 
capital,  therefore,  agriculture  leads  manufactures  by  a  ratio  of  more 
than  4  to  i. 

Corresponding  to  the  "live  capital"  of  manufactures,  included 
under  the  head  of  "cash  and  sundries,"  are  the  value  of  all  farm 
products  on  hand  June  i,  1900,  the  money  due  from  their  sales,  the 
value  of  the  growing  crops  of  the  year  1900,  and  the  cash  on  hand 
and  such  cash  in  bank  as  is  kept  for  use  as  supplementary  capital  in 
farming  operations,  but  not  permanent  investments  either  in  bank 
or  in  industries  other  than  agriculture.  These  items  have  an  enormous 
aggregate  value,  of  which  no  definite  statement  can  be  made.  It 


DEVELOPMENT  OF  AGRICULTURE  619 

does  not,  however,  constitute  as  large  a  per  cent  of  the  total  farm  capital 
as  the  "live  capital"  forms  of  the  total  invested  in  manufactures. 

But  even  if  this  "live  capital"  were  to  be  wholly  disregarded  and 
comparisons  were  to  be  made  between  the  fixed  capital  of  agriculture 
and  the  total  capital,  both  fixed  and  live,  of  manufactures,  investments 
in  agriculture  would  still  be  more  than  twice  as  great  as  in  manufac- 
tures. If  conservative  estimates  of  the  "live  capital"  of  agriculture 
be  included,  it  is  found  that  the  industry  has  a  total  investment 
perhaps  two  and  one-fourth  times  as  great  as  that  in  manufactures. 
In  either  case,  judged  by  investment,  agriculture  still  leads  manu- 
factures by  a  wide  margin.  .  .  . 

In  the  decade  from  1860  to  1870  the  Civil  War  directly  and  in- 
directly wrought  great  changes  in  the  agriculture  of  the  country.  The 
organization  of  great  armies  increased  the  market  demand  for  food 
products  in  the  North.  The  supply  of  labor  was  diminished,  for  the 
time  being,  but  was  increased  later  by  the  great  immigration  move- 
ment that  had  begun  in  the  preceding  decade.  Agricultural  produc- 
tion in  the  North  was  greatly  extended,  and  land  values  continued  to 
rise.  Thousands  of  miles  of  railroad  were  constructed,  and  the  Union 
Pacific,  completed  in  1869,  opened  a  new  pathway  to  the  Pacific  coast. 
The  passage  of  the  homestead  law  in  1862,  granting  land  to  the  actual 
settler  on  the  public  domain,  made  it  easier  for  all,  and  especially 
for  those  having  little  or  no  capital,  to  obtain  farm  homes,  and  improv- 
ing transportation  facilities  made  agriculture  on  the  new  farms 
profitable. 

As  a  result,  many  persons,  and  especially  soldiers  of  the  Northern 
Army,  moved  at  the  close  of  the  Civil  War  from  the  East  to  the  West. 
Land  values  in  that  section  advanced  more  rapidly  than  elsewhere. 
In  fact,  the  westward  movement  of  the  younger  farmers  and  the 
increasing  competition  of  the  cheaper  and  more  fertile  grainfields  of 
the  West,  caused  land  values  in  some  parts  of  New  England  to  suffer 
a  slight  decrease.  The  growing  demand  for  American  breadstuffs 
and  meat  products  in  Europe  checked,  for  a  time,  the  tendency  toward 
further  decrease  in  land  values  in  the  East  by  maintaining  high  prices 
for  agricultural  products  in  all  parts  of  the  country.  The  extent  of 
that  demand  and  its  influence  in  stimulating  production  and  settle- 
ment in  the  West,  and  its  temporary  influence  in  the  East,  are  shown 
by  the  fact  that  agricultural  exports  increased  from  $256,560,972 
in  1860  to  $361,188,483  in  1870,  although  by  1870  cotton  exportation 
had  not  attained  the  proportions  which  were  reached  a  little  later. 

The  conditions  in  the  South  in  this  decade  were  radically  differ- 


620  READINGS  IN  ECONOMIC  HISTORY 

ent  from  those  in  the  North.  As  a  result  of  the  war,  the  markets  of 
the  South  were  destroyed,  investments  in  slaves  were  lost,  and  land 
improvements  deteriorated.  The  close  of  the  war  found  the  planters 
bankrupt,  their  credit  destroyed,  and  agriculture  and  all  business 
paralyzed  by  lack  of  working  capital.  Vast  areas  of  land  went  out  of 
cultivation,  the  reported  acreage  of  farm  land  in  all  the  Southern 
states  was  less  hi  1870  than  in  1860,  and  the  total  and  average 
values  of  land  everywhere  decreased. 

The  inflation  of  the  currency  during  the  war  affected  values  ex- 
pressed in  paper  money,  exaggerating  advances  and  concealing  de- 
clines. The  real  change  during  the  decade  is  therefore  better  indicated 
by  comparing  the  gold  values  of  1870  with  tb.ose  of  1860.  The  average 
increase  in  land  values  in  the  North  Atlantic,  North  Central,  and 
Western  divisions  was  over  $5  per  acre,  while  in  the  two  Southern 
divisions  there  were  decreases  of  from  $3  to  $5  per  acre.  .  .  . 

With  the  readjustment  which  took  place  during  this  decade  in  the 
labor  conditions  of  the  South,  agricultural  operations  in  that  section 
began  to  assume  their  old  proportions.  The  growing  demand  for 
cotton  in  the  factory  centers  of  the  world  stimulated  its  cultivation, 
and  soon  resulted  in  a  great  increase  in  production.  The  extent  and 
rapidity  of  the  recovery  from  the  condition  of  demoralization  follow- 
ing the  Civil  War  are  shown  by  the  fact  that,  while  in  1860,  the  last 
year  of  uninterrupted  slave  labor,  5,387,052  bales  of  an  average  weight 
of  445  pounds  were  produced,  in  1880  the  product  was  5,755,359 
bales  of  an  average  weight  of  453  pounds.  The  reestablishment  of 
Southern  agriculture  on  a  solid  basis  assisted  in  restoring  the  values 
of  the  old  farm  lands  of  the  South. 

The  increased  demand  for  cotton  resulted  in  a  great  movement 
of  population  from  the  South  and  elsewhere  to  the  new  cotton  lands 
of  Texas  and  the  Southwest.  Large  areas  were  settled,  and  land 
values  advanced  there  as  in  the  South  and  West. 

The  growing  European  demand  for  American  beef,  and  the  in- 
creasing consumption  of  wool  in  American  factories,  encouraged  the 
keeping  of  live  stock  on  the  public  domain  of  the  West,  and  especially 
in  Texas.  Steers  and  sheep  began  to  take  the  place  of  buffaloes, 
and  the  rapid  development  of  the  range  industry  assisted  in  enhanc- 
ing the  value  of  the  Western  farm  lands  reported  by  the  census 
of  1880. 

The  panic  of  1873,  brought  about  by  the  excessive  construction 
of  railroads  and  by  over  speculation,  checked  many  lines  of  in- 
dustry, and  for  want  of  remunerative  occupations  in  the  towns 


DEVELOPMENT  OF  AGRICULTURE  621 

and  cities  a  proportionally  greater  movement  of  population  toward 
the  farming  sections  followed.  The  panic  resulted  in  the  reorgan- 
ization of  many  railroads,  and  in  lower  transportation  rates,  which 
in  turn  assisted  in  encouraging  settlement  on  the  new  farm  lands 
of  the  West. 

During  this  decade,  the  cost  of  transporting  agricultural  products 
from  the  West  to  the  seaboard  constantly  decreased,  and  the  compe- 
tition between  the  cheap,  fertile  prairies  of  the  West  and  the  less  pro- 
ductive lands  of  the  East  became  very  apparent.  The  grain-raising 
sections  of  the  East  suffered  most,  and  land  values  declined  there, 
while  in  the  West  they  greatly  increased.  Sections  of  the  East  devoted 
to  dairy  farming,  market  gardening,  and  fruit  growing  suffered  less, 
as  it  was  impracticable,  except  during  a  limited  portion  of  the  year, 
to  bring  the  products  of  these  industries  from  the  Western  states 
and  deliver  them  in  good  condition  in  Eastern  markets. 

In  this  decade,  then,  land  values  in  the  South  advanced,  and  the 
effects  of  the  Civil  War  were  partially  overcome;  there  was  a  still 
greater  advance  in  the  North  Central  and  Western  states;  but  the 
East  began  to  be  adversely  affected,  and  in  many  sections  there  was 
a  marked  decline  in  the  average  as  well  as  the  total  value  of  farm 
lands.  .  .  . 

In  1850  only  eight  states  reported  farm  land  to  the  value  of 
$100,000,000  or  over.  They  were:  New  York,  $554,546,642;  Penn- 
sylvania, $407,876,099;  Ohio,  $358,758,603;  Virginia,  $216,401,543; 
Kentucky,  $155,021,262;  Indiana,  $136,385,173;  New  Jersey,  $120,- 
237,511;  and  Massachusetts,  $109,076,347. 

In  1900  there  were  seven  states  with  land  values  of  over  $800,- 
000,000,  as  follows:  Illinois,  $1,765,581,550;  Iowa,  $1,497,554,790; 
Ohio,  $1,036,615,180;  Pennsylvania,  $898,272,750;  New  York,  $888,- 
134,180;  Missouri,  $843,979,213;  and  Indiana,  $841,735,340.  .  .  . 

The  values  of  farming  implements  on  hand  at  the  date  of  census 
enumeration  increased  in  each  decade  since  1850  in  the  North  At- 
lantic, North  Central,  and  Western  divisions,  while  in  the  South 
Atlantic  and  South  Central  states  they  showed  a  tremendous  decline 
in  the  decade  1860  to  1870,  again  reflecting  the  disastrous  effect  of 
the  Civil  War.  The  percentages  of  increase  in  the  North  Atlantic  and 
North  Central  divisions  were  least  for  the  decade  1880  to  1890,  and 
in  the  Western  states,  for  the  decade  1890  to  1900.  In  the  Civil 
War  period  the  value  of  farming  implements  and  machinery  in  the 
South  Atlantic  states  declined  $14,020,511,  or  41.2  per  cent,  and  in 
the  South  Central,  $31,435,478,  or  51.3  per  cent.  After  1870  the  val- 


622  READINGS  IN  ECONOMIC  HISTORY 

ues  increased  in  both  divisions,  but  not  until  1890  did  the  aggregate 
of  such  gain  suffice  to  give  the  South  Atlantic  division  as  large  a  re- 
ported value  of  this  class  of  farm  property  as  it  had  in  1860;  and  in 
the  South  Central  states,  notwithstanding  the  great  growth  of  popu- 
lation, the  farmers  did  not,  until  1900,  report  as  large  investments 
in  machinery  as  they  did  prior  to  the  war.  .  .  . 

The  five  states  with  the  highest  values  of  farming  implements 
and  machinery  reported  in  1900  were  Iowa,  with  $57,960,660;  New 
York,  with  $56,006,000;  Pennsylvania,  with  $50,917,240;  Illinois, 
with  $44,977,310;  and  Ohio,  with  $36,354,150.  The  highest  aver- 
ages per  farm  were  reported  by  Hawaii,  District  of  Columbia,  Nevada, 
North  Dakota,  California,  Montana,  New  Jersey,  and  Iowa,  in  the 
order  named;  and  the  highest  averages  per  acre,  by  the  District  of 
Columbia,  Hawaii,  Alaska,  New  Jersey,  Massachusetts,  and  Rhode 
Island. 

For  the  United  States  the  value  of  machinery  per  acre  of  farm  land 
has  increased  since  1850  from  $0.52  to  $0.90,  or  nearly  80  per  cent, 
and  since  1880  from  $0.76  to  $0.90,  or  about  20  per  cent.  These 
increases  in  money  value,  however,  do  not  measure  the  added  useful- 
ness of  the  new  machinery.  That  is  measured  principally  by  the 
degree  to  which  the  machinery  saves  human  labor  by  substituting 
the  power  of  animals  or  of  steam.  It  is  interesting,  therefore,  to 
inquire  what  changes  have  been  made  in  the  past  fifty  years  in  the 
use  of  animal  power  on  farms  in  connection  with  these  new  machines. 
A  comparison  of  human  and  animal  labor  on  farms  in  relation  to 
the  acreage  of  crops  cultivated  can  be  made  only  for  the  period 
since  1880. 

B.   Importance  of  Irrigation,  1899  l 

The  importance  of  irrigation  to  agriculture  and  the  extent  to  which  it  was 
proposed  to  carry  it  on  by  the  government  were  shown  to  be  in  1899  as  follows: 

Testimony  given  before  the  Industrial  Commission  shows  that 
irrigation  by  English-speaking  people  in  the  United  States  began  half 
a  century  ago  among  the  Mormons  in  Utah  and  at  scattered  points 
near  the  mining  districts  in  California.  Twenty  years  later  it  was 
adopted  at  separate  places  in  Colorado  and  adjacent  States  and 
Territories.  It  is  estimated  that  40  per  cent  of  the  United  States 
proper  requires  irrigation  for  successfully  producing  plants  useful  as 
a  food  supply  for  man  and  animals.  In  1890  a  little  over  three  and 

1  Final  Report  of  the  Industrial  Commission  (Washington,  1902),  Volume 
XIX  of  the  Commission's  Report,  1073-6. 


DEVELOPMENT  OF   AGRICULTURE  623 

one-half  million  acres  were  cropped  by  irrigation,  and  in  the  succeed- 
ing ten  years  this  area  has  been  doubled,  largely  by  the  more  careful 
use  of  water  and  more  complete  tilling  of  farms  already  partly  irri- 
gated. Since  1895  there  have  been  comparatively  few  notable  works 
of  irrigation  built,  and  development  along  this  line  may  be  said  to 
have  nearly  ceased.  This  cessation  of  activity  in  irrigation  devel- 
opment is  not  because  there  is  no  longer  water  or  fertile  land,  but 
because,  as  before  stated,  the  easily  available  waters  are  already  util- 
ized, and  it  has  not  been  found  profitable  to  store  floods  nor  to  con- 
struct large  works  by  private  enterprise,  any  more  than  it  would  be 
profitable  for  individuals  to  dredge  harbors  or  build  light-houses. 
Moreover,  it  must  be  borne  in  mind,  not  only  is  it  important  that 
an  ample  supply  of  water  for  irrigation  shall  be  secured  and  controlled, 
but  also  that  it  shall  be  stored  for  use  when  most  needed  and  when  the 
most  remunerative  crops  can  be  obtained.  Sugar  beets,  potatoes, 
alfalfa,  and  orchards,  all  require  irrigation  in  August  and  September, 
which  is  the  season  of  least  supply.  These  crops  require,  as  a  rule,  but 
little  water,  while  yielding  large  returns.  .  .  . 

Briefly  summarized,  therefore,  it  may  be  stated  that  the  agri- 
cultural interests  of  sixteen  States  and  Territories  of  the  West  depend 
directly,  in  part  at  least,  upon  irrigation  and  irrigation  methods. 
These  States  and  Territories  are  Arizona,  California,  Colorado,  Idaho, 
Kansas,  Montana,  Nebraska,  Nevada,  New  Mexico,  North  Dakota, 
Oklahoma,  Oregon,  South  Dakota,  Utah,  Washington,  and  Wyoming. 
They  comprise  an  area  of  nearly  1,500,000  square  miles,  almost  one- 
half  the  area  of  the  United  States  proper,  and  support  a  population  of 
about  6,000,000  of  people. 

This  large  district,  extending  from  the  Gulf  of  Mexico  (for  a  large 
section  of  Texas  may  be  included)  to  the  Canadian  border,  and  practi- 
cally from  the  Mississippi  to  the  Pacific,  constitutes  what  is  known  as 
the  arid  or  semiarid  districts  of  the  West.  Into  this  territory  rail- 
roads penetrated  far  in  advance  of  population.  Those  who  entered 
into  the  migratory  movement  westward  during  the  seventies  and 
early  eighties  took  up  a  portion  of  this  land,  only  to  learn  that  the  water 
supply  thereof  was  insufficient  to  rely  upon  for  profitable  cultivation. 
After  occupation  for  some  time,  much  of  it  was  given  up  entirely, 
public  buildings  were  abandoned,  and  whole  communities  disappeared 
from  the  towns  they  had  built.  In  other  sections  attempts  at  irriga- 
tion, more  or  less  successful,  were  made,  and  millions  of  acres  thereby 
reclaimed  to  civilization. 

In  many  of  these  States  the  production  of  foodstuffs  has  not 


624  READINGS  IN  ECONOMIC  HISTORY 

reached  the  point  of  supplying  the  home  demand,  arising  largely  from 
the  development  and  progress  of  mining  and  other  local  industries. 
Extension  of  food  production  must  come  through  irrigation,  or  not 
at  all.  .  .  . 

But  the  benefits  of  irrigation  are  not  confined  to  the  arid  regions, 
of  the  West.  In  sections  of  the  country  East  and  South  it  has  been 
gaining  ground  as  a  feature  of  agriculture  in  the  growing  of  high- 
priced  products.  A  regular  water  supply  is  a  necessary  condition  in 
order  that  dry  seasons  may  not  destroy  the  outlay  of  the  producer. 
In  Connecticut,  Massachusetts,  and  New  Jersey  irrigation  has  made 
the  growing  of  small  fruits  highly  profitable.  The  possibilities  of  its 
application  to  market  gardening  are  almost  unlimited.  In  Wisconsin 
irrigation  has  been  used  for  cranberry  growing  and  for  obtaining  a 
setting  of  sod  on  the  sandy  pine  lands.  Tobacco  growers  in  Connec- 
ticut are  likewise  using  irrigation.  In  southern  Louisiana  and  southern 
Texas  the  area  of  rice  culture  has  been  extended  in  some  cases  as 
much  as  fourfold  within  a  year  or  two.  Water  is  pumped  into  the 
canals  for  the  purpose.  Hundreds  of  wells  are  being  sunk  in  Louisi- 
ana for  the  rice  fields.  The  older  methods  of  rice  culture,  such  as 
have  prevailed  in  the  Carolinas,  are  giving  place  to  the  newer  systems, 
based  on  irrigation  and  the  use  of  improved  harvesting  machines. 
Thus  the  widening  of  the  irrigated  area  not  only  increases  the  sum 
total  of  national  products,  but  extends  the  home  market  for  manu- 
factures. 

C.  Dry  Farming,  IQO$  l 

Hand  in  hand  with  irrigation  has  gone  dry  farming.  Both  are  the  result 
of  a  scarcity  of  rainfall  in  a  great  area  of  the  west.  In  1905  an  expert 
directed  attention  to  the  importance  of  this  method  of  farming  as  follows: 

Between  the  line  of  20  inches  average  annual  rainfall  and  the  Rocky 
Mountains  there  is  a  strip  of  land  reaching  from  Canada  to  the  Gulf 
of  Mexico,  embracing  about  300,000,000  acres,  which  for  agriculture 
is  debatable  ground.  .  .  .  Together  they  present  one  of  the  greatest 
problems  of  American  agriculture.  The  area  is  great,  the  soil  is 
deep  and  exceedingly  fertile,  and  the  climate  healthful  and  agreeable 
aside  from  lack  of  moisture.  Men  need  it  for  homes.  All  interests 
are  eager  to  see  these  areas  settled,  provided  the  settlers  can  be  self- 
supporting,  or  to  avert  this  if  settlement  is  to  mean  disaster.  From 
all  classes  come  the  questions:  What  methods  will  make  the  most  of 

1  Yearbook  of  the  Department  of  Agriculture,  190$  (Washington,  1906), 
423-7, 43°- 


DEVELOPMENT  OF  AGRICULTURE  625 

these  lands?    How  can  they  be  made  to  support  the  largest  number 
of  people  and  give  them  the  greatest  measure  of  human  comfort? 

There  is  a  variety  of  causes  tempting  men  to  plow  up  the  native 
sod.  The  stockman  realizes  the  need  of  a  reserve  food  supply  and 
seeks  to  provide  it  by  growing  Kafir  corn,  sorghum,  rye,  hay,  and  other 
drought-resistant  forage  crops.  The  eastern  farmer  finds  these  broad, 
rolling  plains,  with  their  fertile  soil  and  freedom  from  rocks  or  stumps, 
attractive.  Hopeful,  enterprising  men  are  prone  to  believe  that  settle- 
ment and  cultivation  will  change  the  climate,  and  a  few  wet  years 
are  almost  certain  to  create  a  wave  of  settlement. 

EARLY  FAILURE  AND   ITS   LESSONS 

The  first  general  attempt  of  this  kind  began  in  1883.  Western 
Kansas  and  Nebraska  were  dotted  with  farmhouses.  Eastern  Colo- 
rado was  largely  settled  up  between  1886  and  1889.  A  few  wet  years, 
in  which  fine  crops  were  grown,  were  followed  by  a  succession  of  dry 
seasons.  On  millions  of  acres  crops  shriveled  and  died,  men  lost  hope 
and  energy  through  repeated  bitter  failures,  and  women  and  children 
endured  dreary  years  of  poverty  and  hardship.  Homes  which  repre- 
sented the  savings  of  a  lifetime  had  to  be  abandoned.  Whole  coun- 
ties were  almost  depopulated.  What  had  been  thriving  towns  were 
deserted. 

The  bitter  lessons  of  this  failure  lasted  for  years,  but  its  scars  at 
length  healed.  Other  influences  were  meanwhile  at  work  to  restore 
confidence  in  ability  to  farm  this  region.  As  a  result,  another  wave 
of  settlement  is  sweeping  over  these  plains.  Other  settlers  are  buying 
the  abandoned  farms.  Deserted  towns  are  being  rebuilt  and  new 
ones  laid  out.  This  latest  attempt  is  not,  however,  a  repetition  of 
the  first.  New  methods  are  being  tried.  Much  has  been  learned  in 
past  twenty  years.  Practically  every  settler  who  has  remained 
in  the  semiarid  belt  has  been  an  experimenter  in  developing  a  kind  of 
agriculture  suited  to  this  climate.  .  .  . 

The  agricultural  problems  of  the  semiarid  region  relate  to  heat  and 
moisture.  There  is  no  lack  of  fertility.  The  average  rainfall,  which 
varies  from  20  inches  on  the  eastern  margin  of  the  semiarid  district 
to  10  inches  on  the  western,  is  not  simply  scanty,  it  is  irregular.  .  .  . 
There  are  years  when  the  average  is  almost  cut  in  two,  and  there  are 
months  without  a  cloud  and  days,  especially  in  the  Southwest,  when 
the  winds  are  like  a  blast  from  a  furnace  —  so  hot  and  dry  that  they 
change  green  fields  of  corn  into  dry  and  rattling  stalks  in  twenty-four 
hours.  . 


626  READINGS  IN  ECONOMIC  HISTORY 

In  order  to  lessen  the  losses  in  dry  years  and  to  extend  farming 
beyond  the  point  where  the  rainfall  of  a  single  year  is  sufficient  to 
grow  crops,  summer  fallowing  is  employed.  The  ground  is  plowed, 
pulverized,  and  kept  free  from  crops  or  weeds,  the  main  purpose  being 
to  lessen  evaporation  and  save  the  moisture  falling  on  the  soil  from 
one  year  to  the  next.  Thus  when  a  crop  is  planted  on  this  land  the 
following  year,  two  seasons'  rainfall  is  utilized  to  grow  one  crop. 
Special  tools  and  methods  of  cultivation  have  been  devised  to  lessen 
the  losses  by  evaporation  from  the  summer-fallowed  fields  and  remark- 
able results  have  been  achieved,  but  a  summer-fallowing  will  answer 
for  annual  crops  only.  It  will  serve  to  grow  wheat  and  many  of  the 
drought-resistant  crops  that  are  now  a  feature  of  the  dry  farm,  but 
will  not  answer  for  trees,  and  in  many  cases  it  will  not  answer  for  al- 
falfa. Trees,  small  fruits,  or  alfalfa  can  not  be  moved  each  year  from 
the  summer-fallowed  to  the  nonsummer-fallowed  field.  For  these 
the  dry  farm  provides  no  method  of  tiding  over  the  seasons  when  a 
dry  winter  is  followed  by  a  dry  spring  and  when  the  soil  moisture 
falls  below  the  needs  of  plant  life.  If  these  are  to  be  features  of  the 
dry  farm,  the  additional  water  supply  which  is  necessary  to  maintain 
continuous  growth  must  be  furnished  by  irrigation.  Nor  do  the  most 
sanguine  expectations  of  the  effectiveness  of  dry-farming  methods 
justify  belief  in  immunity  from  drought,  even  with  the  best  methods 
or  safest  crops.  .  .  . 

But  when  all  this  has  been  said  the  fact  must  be  recognized  that 
the  dry  farm  taken  alone  has  not  the  attraction  or  the  security  of 
farming  under  irrigation,  or  of  farming  in  Iowa  and  Illinois,  where  the 
rainfall  is  ample.  Nothing  can  be  more  dreary  or  discouraging  than 
the  aspect  of  the  dry  farmer's  home  in  midsummer.  Without  shade 
trees,  without  green  grass,  without  fruit,  the  dead,  dusty,  and  lifeless 
appearance  of  the  landscape  is  monotonous  beyond  measure.  It 
makes  one  realize  that  "a  world  without  turf  is,  indeed,  a  desert." 
The  fact  that  many  of  these  farmers  are  prosperous  does  not  remove 
the  need  for  trees,  fruit,  grass,  and  gardens,  nor  lessen  the  value  of 
these  features  of  a  home  as  seen  on  irrigated  farms  in  the  same  region. 
The  dry  farm  needs  enough  irrigation  to  provide  these  things.  It 
needs  it  for  the  comfort  of  the  family.  It  needs  it  for  the  opportu- 
nities it  will  give  to  make  a  living  in  dry  years,  as  well  as  larger  profits 
in  wet  ones,  and  it  is  only  by  supplemental  irrigation  that  the  limits 
of  settlement  can  be  pushed  westward  across  the  driest  part  of  the 
semiarid  belt.  The  present  situation  requires  that  the  chances  of 
failure  be  clearly  faced,  and  it  is  the  writer's  conviction  that  there  are 


DEVELOPMENT  OF  AGRICULTURE  627 

hundreds  of  settlers  in  the  western  half  of  the  semiarid  belt  who  must 
supplement  the  dry  farm  by  irrigation;  and  unless  they  do,  the  next 
period  of  drought  will  witness  a  greater  exodus  and  more  hardship 
and  privation  than  the  first. 

V.   SOUTHERN  AGRICULTURE 

Tenancy,  Size  of  Farms,  and  Character  of  Crops,  1850-1910 l 

The  Civil  War  and  its  results  caused  radical  changes  in  southern  agriculture, 
the  most  important  of  which  was  the  readjustment  of  land  tenure.  Many  of  the 
large  plantations,  which  had  formerly  been  worked  by  slaves,  were  broken  up  and 
rented  or  sold  to  the  freedmen.  In  either  case  the  change  was  radical,  but  the 
question  of  tenancy  has  been  the  most  important. 

Previous  to  the  Civil  War  there  were  many  large  farms  in  the 
South  which  were  mostly  worked  by  slave  labor.  These  were  ordi- 
narily called  plantations.  There  was  no  sharp  line  of  distinction  at 
that  time,  nor  is  there  at  present,  between  plantations  and  other 
farms,  the  term  "plantation"  being  applied  simply  to  large  farms 
usually  comprising1  several  hundred  or  even  thousands  of  acres. 
Prior  to  the  war  each  plantation  was,  of  course,  a  single  agricultural 
unit  and  was  so  reported  by  the  census,  being  counted  as  one  of  the 
farms  of  the  country. 

During  the  period  of  reconstruction  after  the  Civil  War  the  owners 
of  the  plantations  largely  tried  to  work  them  by  hiring  labor.  A 
movement  soon  began,  however,  for  the  substitution  of  the  tenant 
system  of  operation.  Under  this  system  a  plantation  was  sub-divided 
into  small  tracts  —  commonly  called  "parcels"  or  "cuts"  —each  of 
which  was  operated  by  a  tenant.  The  tenants  were  designated  by 
various  terms,  such  as  "cropper,"  "standing  renter,"  and  the  like. 

Since  there  were  considerable  numbers  of  tenant  farms  in  the 
North  as  well  as  in  the  South,  the  Census  Bureau  very  naturally 
adopted  the  practice  of  treating  the  tenant  farms  in  the  South  in  the 
same  manner  as  those  in  the  North;  that  is  to  say,  each  tract  of  land 
operated  by  a  tenant  was  treated  as  a  separate  farm.  As  a  matter 
of  fact,  however,  a  large  proportion  of  the  tenants  in  the  South  actu- 
ally occupied  a  very  different  economic  position  from  that  usually 
occupied  by  tenants  in  other  parts  of  the  country.  The  plantation 
as  a  unit  for  general  purposes  of  administration  has  not  disappeared, 
and  in  many  cases  the  tenants  on  plantations  are  subjected  to  quite 
as  complete  supervision  by  the  owner,  general  lessee,  or  manager  as 

1  Thirteenth  Census,  1910.     Agriculture  (Washington,  1913),  Vol.  V,  877-8. 


628  READINGS  IN  ECONOMIC  HISTORY 

that  to  which  the  hired  laborers  are  subjected  on  large  farms  in  the 
North  and  West.  Where  this  is  the  case  a  tenant  is  very  similar  in 
his  economic  position  to  the  hired  farm  laborer,  practically  the  only 
difference  being  that  he  confines  his  work  to  a  particular  parcel  of 
land  which  he  works  by  himself  and  that  he  is  paid  by  a  share  of  the 
crop  instead  of  by  wages.  There  are  also  some  plantations  in  the 
South  which  are  operated  by  hired  labor.  The  distinction  drawn  in 
popular  speech  is  still  based  on  the  size  of  the  agricultural  unit  and  not 
on  the  form  of  organization.  .  .  . 

From  what  has  been  said  it  is  evident  that  the  statistics  of  agri- 
culture for  the  South,  when  each  tenant  holding  is  treated  as  a  sepa- 
rate farm,  are  in  some  respects  not  comparable  with  those  for  other 
parts  of  the  country.  In  the  North  and  the  West  a  tenant  farm  is 
very  similar  in  its  method  of  operation  to  a  farm  operated  by  the 
owner  himself.  The  owner  ordinarily  exercises  very  little  super- 
vision over  the  operations  of  the  tenant,  and  the  latter  has  substan- 
tially an  independent  economic  status.  Tenant  farms  in  the  North 
and  West  are  in  general  quite  as  large  as  the  farms  operated  by  their 
owners,  and  the  tenant  farmer  often  employs  hired  labor  to  assist 
him.  In  the  South,  on  the  other  hand,  a  very  large  proportion  of  the 
tenant  farms  are  decidedly  small,  containing  no  more  land  than  can 
be  effectively  worked  by  the  tenant  alone,  with  perhaps  the  assist- 
ance of  his  own  family.  Moreover,  many,  though  not  all,  of  the 
tenants  are  subjected  to  very  thorough  supervision  by  the  owner 
or  manager  of  the  plantation  of  which  the  farm  is  a  part.  As  the 
result  of  this  difference  in  conditions,  the  average  size  of  farms  in  the 
South,  when  each  separate  tenant  farm  is  counted  as  a  unit,  is  very 
much  less  than  in  the  North  or  the  West,  and  the  statistics  give  an 
impression  which  does  not  correspond  to  actual  conditions.  .  .  . 

During  the  half  century  between  the  census  of  1860,  the  last 
census  before  the  process  of  breaking  the  plantations  up  into  tenant 
farms  commenced,  and  that  of  1910,  the  amount  of  land  in  farms 
in  the  n  Southern  states  increased  only  43.3  per  cent,  while  the 
number  of  farms,  as  returned  by  the  census,  increased  from  somewhat 
more  than  half  a  million  to  about  two  and  a  half  million,  or  353.7 
per  cent.  In  1860  the  average  farm  contained  365.1  acres,  of  which 
103.5  acres  were  improved,  and  the  average  value  of  land  and  build- 
ings per  farm  was  $3,370.  In  1910  the  average  farm  had  decreased 
in  size  to  115.3  acres,  of  which  43.8  acres  were  improved,  the  average 
value  of  land  and  buildings  being  $2,172.  In  the  East  South  Central 
and  South  Atlantic  divisions  the  average  total  acreage  in  1910  was 


DEVELOPMENT  OF  AGRICULTURE 


629 


materially  lower  than  that  for  all  of  the  states  .  .  .  ,  the  latter 
being  increased  by  the  presence  of  many  very  large  ranches  in 
the  West  South  Central  division.  .  .  .  [There  has  also]]  been  a  con- 
tinuous decline  since  1860  in  the  average  size  of  farms  in  the  plan- 
tation districts,  the  greatest  decrease  taking  place  between  1860 
and  1870. 

The  effect  of  the  method  of  classifying  farms  in  the  South  is  fur- 
ther shown  in  [the  following  table]  by  a  comparison  of  the  average 
total  and  improved  acreage  and  value  of  land  and  buildings  for  that 
section  with  the  corresponding  averages  for  the  North. 


CENSUS  YEAR 

X 

AVERAGE   ACRES    OF 
LAND  PER  FARM 

AVERAGE    IMPROVED 
ACRES   PER   FARM 

AVERAGE    VALUE 
OF   LAND   AND 
BUILDINGS   PER 
FARM 

The 
South 

The 
North 

The 
South 

The 
North 

The 
South 

The 

North 

IOIO  .   . 

114.4 
138.2 
139-7 
IS3-4 

214.  2 

335-4 
332-1 

i43-o 
133-2 
123.7 
114.9 
117.0 
126.4 
127.  i 

48.6 
48.1 

58.8 
56.2 

69.  2 

101.3 

IOI  .  I 

100.3 
90.9 
87.8 
76.6 

69.  2 
68.3 
65-4 

$2,374 
1,251 
1,402 
1,224 
1,456 
3,455 
2,051 

$8,182 
4,190 
3,72i 
3,3i4 
3,463 
3,180 
2,380 

IOOO.  . 

1800.  . 

1880  

1870     .  .  . 

1860   

i8«>.  . 

VI.   FARMS  AND  FARM  PROPERTY  AND  CROPS 

A.   General  View,  igio  1 

The  decade  from  1900  to  1910  saw  a  remarkable  development  in  American 
agriculture,  particularly  in  the  value  of  farm  products  and  of  farm  property.  This 
development  is  indicated  in  the  Thirteenth  Census  as  follows: 

There  were  in  the  United  States  at  the  time  the  census  enumera- 
tion was  made  6,361,502  farms,  containing  878,798,325  acres,  of  which 
478,451,750  acres  were  improved,  the  remaining  400,346,575  acres 
comprising  the  acreage  of  woodland  and  other  unimproved  land.  Of 
this  latter  acreage,  190,865,553  acres  were  reported  as  woodland 
and  209,481,022  acres  as  other  unimproved  land.  The  land  in  farms 

1  Thirteenth  Censih,  1910.  Agriculture  (Washington,  1913),  Vol.  V,  27-9,  33-4, 
37,  43-4- 


630  READINGS  IN  ECONOMIC  HISTORY 

represented  46.2  per  cent,  or  somewhat  less  than  one-half  of  the 
total  land  area  of  the  country.  The  improved  land,  which  formed 
more  than  one-half  (54.4  per  cent)  of  the  farm  land,  represented  only 
about  one-fourth  (25.1  per  cent)  of  the  total  land  area  of  the  country. 
The  average  size  of  a  farm  was  138.1  acres,  of  which  on  the  average 
75.2  acres  were  improved  and  62.9  acres  unimproved.  .  .  . 

It  is  a  significant  fact  that  whereas  the  total  population  increased 
21  per  cent  between  1900  and  1910,  the  population  of  the  territory 
which  was  classed  as  urban  in  1910  (that  is,  resident  in  places  having 
at  that  census  2,500  or  more  inhabitants)  increased  34.8  per  cent 
during  the  decade,  and  the  population  of  the  territory  classed  as  rural 
in  1910  increased  only  11.2  per  cent.  It  will  be  noted  that  the 
rural  population,  under  the  census  classification,  includes  much  more 
than  the  agricultural  population,  and  it  is  probable  that  the  agri- 
cultural population  increased  even  less  rapidly.  Indeed  if  the  cen- 
sus distinction  of  urban  population  were  drawn  at  incorporated 
places  of  1,000  inhabitants  or  of  500  inhabitants  the  rate  of  increase 
in  "rural"  population  would  probably  be  less  than  10  per  cent.  The 
number  and  acreage  of  farms  increased  much  less  rapidly  than  the 
total  population,  but  the  growth  in  the  number  of  farms,  10.9  per 
cent,  nearly  kept  pace  with  the  increase  of  the  rural  population,  11.2 
per  cent.  The  total  farm  acreage,  on  the  other  hand,  increased 
only  4.8  per  cent.  This,  however,  is  less  significant  than  the  increase 
of  15.4  per  cent  in  the  improved  farm  acreage,  which  still  fell  appre- 
ciably below  the  increase  in  total  population.  .  .  . 

The  small  increase  in  the  total  farm  acreage  was  partly  due  to 
changes  in  conditions  under  which  land  was  held.  Not  all  land 
reported  as  in  farms  is  in  any  true  sense  used  as  farm  land.  In  some 
cases  considerable  amounts  of  land  formerly  owned  by  farmers  but  not 
found  immediately  available  for  agricultural  purposes  have  since  been 
purchased  for  speculation,  and  although  reported  as  in  farms  in  1900 
were  not  so  classified  in  1910.  On  the  other  hand,  in  some  cases 
large  stock  ranches  which  as  entireties  were  reported  as  "farms"  in 
1900  have  since  been  partly  divided  into  smaller  farms  and  partly 
left  unused  for  agricultural  purposes.  The  formation  of  forest  re- 
serves and  the  purchase  of  large  tracts  of  land  by  wealthy  citizens 
for  country  homes  have  also  tended  to  keep  farm  acreage  from  in- 
creasing rapidly.  .  .  . 

That  the  number  of  farms  increased  more  rapidly  than  the  acreage 
of  land  in  farms  is  accounted  for  partly  by  the  fact  that  in  some  sec- 
tions of  the  country  considerable  numbers  of  small  truck,  poultry,  and 


DEVELOPMENT  OF  AGRICULTURE  631 

fruit  farms  have  been  established,  but  still  more  by  the  fact  that  in 
the  West  large  numbers  of  farms  of  moderate  size  have  been  estab- 
lished where  great  cattle  ranches  were  formerly  found.  Then,  too, 
in  the  Southern  states  the  subdivision  of  many  plantations  into 
smaller  tracts  of  land  operated  by  tenants  —  a  process  begun  soon 
after  the  Civil  War  —  has  continued,  each  of  such  tracts  counting 
as  a  farm  under  the  census  definition.  .  .  . 

The  total  value  of  all  farm  property  in  1910  reached  the  enormous 
sum  of  $40,991,449,000,  of  which  over  two- thirds  (69.5  per  cent) 
represented  the  value  of  land,  somewhat  less  than  one-sixth  (15.4 
per  cent)  the  value  of  buildings,  and  about  the  same  proportion 
(15.1  per  cent)  the  value  of  the  equipment.  The  value  of  land  formed 
an  appreciably  larger  proportion  of  the  total  value  of  farm  property 
in  1910  than  in  1900.  The  total  value  of  farm  property  a  little  more 
than  doubled  during  the  decade  1900-1910.  The  greater  part  of  this 
extraordinary  increase  was  in  the  value  of  farm  land,  which  increased 
no  less  than  118.1  per  cent.  This  latter  increase  was  largely  due  to 
the  advance  in  the  selling  price  of  land,  the  average  exchange  value 
per  acre  being  more  than  twice  as  high  in  1910  as  in  1900  —  $32.40  as 
compared  with  $15.57.  There  were  remarkable  increases  also  in  the 
value  of  farm  buildings  and  equipment  during  the  decade,  the  value 
of  buildings  having  increased  77.8  per  cent,  that  of  implements  and 
machinery  68.7  per  cent,  and  that  of  live  stock  60. i  per  cent.  These 
increases  were  due  in  part  to  higher  prices  of  building  materials, 
implements,  and  farm  animals  and  do  not  represent  correspondingly 
great  additions  to  physical  property. 

In  spite  of  the  decrease  in  the  average  size  of  farms,  from  146.2 
acres  to  138.1  acres,  the  value  of  all  farm  property  per  farm  increased 
from  $3,563  in  1900  to  $6,444  in  1910,  or  80.9  per  cent.  The  average 
value  per  farm  of  each  class  of  property  increased  materially,  but  the 
largest  increase  was  in  the  value  of  land,  from  $2,276  per  farm  in  1900 
to  $4,476  in  1910. 

The  average  value  of  all  farm  property  per  acre  of  land  in 
farms  increased  from  $24.37  in  I9°°  to  $46.64  in  1910,  a  gain  of  91.4 
per  cent.  The  investment  of  farmers  in  buildings  and  equipment 
is  chiefly  utilized  in  connection  with  improved  land.  The  average 
value  of  buildings  per  acre  of  improved  land  was  $13.22  in  1910  as 
compared  with  [$^8.58  in  1900,  wrhile  for  equipment  the  corresponding 
averages  were  $12.94  and  $9.23,  respectively.  .  .  . 

In  each  of  the  three  geographic  divisions  in  the  territory  north 
of  the  Ohio  and  east  of  the  Mississippi  —  New  England,  Middle  At- 


632  READINGS  IN  ECONOMIC  HISTORY 

lantic,  and  East  North  Central  —  there  was  an  actual  decrease  in 
the  number  of  farms  between  1900  and  1910,  despite  the  large  increase 
in  population,  which  was  chiefly  in  urban  communities.  In  the 
West  North  Central  division  the  increase  in  the  number  of  farms  was 
comparatively  small,  amounting  to  only  4.6  per  cent,  although  suffi- 
cient to  bring  about  a  small  increase  for  the  North  taken  as  a  whole. 
In  all  of  the  other  five  divisions  there  was  a  very  considerable  increase 
in  the  number  of  farms.  In  the  East  South  Central  and  Mountain 
divisions  the  per  cent  of  increase  in  the  number  of  farms  was  greater 
than  that  of  the  total  population. 

The  changes  in  the  number  of  farms  in  the  various  divisions  of 
the  country,  as  in  the  United  States  as  a  whole,  in  most  instances 
followed  the  movement  hi  the  rural  population  more  closely  than 
that  of  the  total  population.  This  is  especially  noticeable  in  the  West 
South  Central  division,  where  the  increase  in  the  number  of  farms 
exceeded  that  for  any  other  division,  and  where  the  percentage  of 
increase,  24.9,  shows  a  fairly  close  correspondence  to  that  for  the 
rural  population. 

Great  differences  appear  among  the  several  geographic  divisions 
with  respect  to  the  changes  in  the  total  acreage  of  land  in  farms 
between  1000  and  1910.  In  the  New  England,  Middle  Atlantic, 
South  Atlantic,  and  West  South  Central  divisions  there  was  a  decrease 
in  the  acreage  reported  in  farms.  The  largest  decrease,  both  in  abso- 
lute amount  and  in  percentage,  was  in  the  WTest  South  Central  divi- 
sion, but  this  is  in  fact  more  apparent  than  real.  A  considerable 
increase  hi  the  acreage  of  farms  occurred  in  two  of  the  states  of  this 
division  —  Arkansas  and  Oklahoma.  In  Louisiana  a  moderate  de- 
crease appeared,  due  to  the  fact  that  much  undeveloped  land  in  the 
extreme  southern  part  of  the  state,  which,  although  not  actually 
used  for  agriculture,  had  been  reported  as  in  farms  in  1000,  was  subse- 
quently purchased  by  nonresidents  and  was  not  reported  as  farm 
land  in  1910.  In  Texas  there  was  nominally  a  very  great  decrease 
in  the  acreage  of  farm  land,  but  a  large  part,  if  not  all,  of  this  de- 
crease was  due  to  the  fact  that  in  1900  the  state  contained  many 
enormous  ranches  which  in  their  entirety  were  reported  as  farm 
land,  whereas  in  1910  many  of  these  ranches  had  been  divided  into 
smaller  tracts,  some  of  which  were  reported  as  farms,  while  others 
not  being  actually  in  use  for  agricultural  purposes,  were  omitted  from 
the  reports.  Some  large  tracts  of  land,  which  were  owned  by  non- 
residents and  not  used  at  the  tune  of  the  enumeration  in  1910,  had 
been  used  more  or  less  for  grazing  in  1000  and  were  reported  at  that 


DEVELOPMENT  OF  AGRICULTURE  633 

time  as  in  farms.  The  acreage  of  improved  land  in  Texas  increased 
greatly  during  the  decade. 

The  largest  absolute  increase  in  the  acreage  of  farm  land  between 
1900  and  1910  occurred  in  the  West  North  Central  division,  which 
at  both  censuses  comprised  a  larger  area  of  farm  land  than  any  other, 
the  advance  being  from  slightly  more  than  201,008,713  acres  in  1900 
to  232,648,121  acres  in  1910,  or  15.7  per  cent.  The  highest  rate  of 
increase  was  in  the  Mountain  division,  28.3  per  cent. 

The  farm  acreage  in  the  North  as  a  whole  increased  8  per  cent 
and  that  in  the  South  decreased  2.1  per  cent,  chiefly  because  of  the 
conditions  hi  Louisiana  and  Texas  as  mentioned  above.  In  the  West, 
notwithstanding  the  large  increase  in  the  number  of  farms,  the  gain 
in  farm  land  was  but  18.2  per  cent,  but  the  fact  that  the  gain  was  not 
large  is  partly  due  to  conditions  similar  to  those  in  Texas. 

.  .  .  [I]n  the  New  England,  Middle  Atlantic,  and  East  North 
Central  divisions,  every  state  except  Michigan  and  Wisconsin  shows 
a  decrease  between  1900  and  1910  in  the  land  in  farms,  and  in  these 
two  the  gains  were  of  small  importance.  The  most  notable  increases 
were  in  three  contiguous  states  of  the  West  North  Central  division, 
namely,  North  Dakota,  South  Dakota,  and  Nebraska.  In  the  West 
South  Central  division  Oklahoma  shows  a  conspicuous  increase,  and 
in  the  Mountain  division,  New  Mexico. 

The  largest  absolute  gain  in  the  improved  land  in  farms  between 
1900  and  1910  occurred  in  the  West  North  Central  division  —  from 
135,643,828  acres  to  164,284,862  acres,  the  rate  of  increase  being 
21. i  per  cent.  Notwithstanding  the  nominal  loss  in  total  acreage 
of  farm  land  in  the  West  South  Central  division,  the  improved  land 
showed  a  large  gain  —  18,493,743  acres,  or  46.5  per  cent.  Moreover, 
in  the  South  Atlantic  division,  although  there  was  a  loss  in  total 
acreage  of  farm  land,  the  gain  in  improved  acreage  was  5.2  per  cent. 
The  highest  percentage  of  gain  was  in  the  Mountain  division  —  89.4 
per  cent.  Decreases  in  improved  acreage  appeared  in  the  New 
England  and  Middle  Atlantic  divisions,  these  decreases  being  rela- 
tively greater  than  those  in  the  total  farm  acreage.  The  East  and 
West  North  Central  divisions,  on  the  other  hand,  show  a  greater 
relative  increase  in  improved  than  in  total  farm  acreage.  Despite 
the  slight  decrease  in  the  total  farm  land  in  the  territory  east  of  the 
Mississippi,  there  was  a  gain  of  2.8  per  cent  in  the  improved  acreage. 
In  the  territory  west  of  the  Mississippi,  however,  nine-tenths  of  the 
total  increase  in  the  improved  farm  acreage  of  the  country  occurred, 
the  rate  of  increase  for  this  section  being  28.6  per  cent. 


634  READINGS  IN  ECONOMIC  HISTORY 

Among  individual  states  North  Dakota  showed  the  greatest 
absolute  increase  in  improved  farm  acreage  during  the  decade, 
gaining  10,810,572  acres.  The  only  other  states  where  more 
than  2,000,000  acres  were  added  to  the  improved  farm  land  were 
Oklahoma,  Texas,  Nebraska,  Kansas,  South  Dakota,  Washing- 
ton, and  Colorado.  The  highest  percentage  of  increase  —  348.9  — 
was  shown  for  New  Mexico,  followed  by  North  Dakota,  Montana, 
and  Oklahoma,  in  each  of  which  the  improved  land  more  than 
doubled.  .  .  . 

The  average  size  of  farms  is  smaller  in  the  older  sections  of  the 
country  than  in  the  newer,  and  in  general,  for  reasons  explained 
below,  it  is  smaller  in  the  South  than  in  the  North.  More  specifically, 
the  average  size  of  farms  in  1910  was  smallest  in  the  East  South 
Central  division,  being  only  78.2  acres.  It  was  92.2  acres  in  the  Middle 
Atlantic  division;  93.3  in  the  South  Atlantic;  104.4  in  New  England; 
and  105  in  the  East  North  Central  division.  These  five  divisions  do 
not  differ  so  widely  from  one  another  as  they  all  do  from  the  four 
divisions  lying  west  of  the  Mississippi  River,  in  each  of  which  the 
farms  averaged  much  larger,  ranging  from  179.3  acres  in  the  West 
South  Central  to  324.5  acres  in  the  Mountain  division.  Among  the 
individual  states  the  average  size  of  farms  was  greatest  in  Nevada, 
Wyoming,  and  Montana.  In  these  states  there  are  still  many  great 
cattle  and  sheep  ranches  which  are  reported  as  single  farms,  thus 
materially  increasing  the  average  size.  North  and  South  Dakota 
ranked  next  to  these  three  states,  but  the  high  averages  for  them  is 
largely  due  to  a  different  cause.  Most  of  the  farms  in  these  states 
were  acquired  under  the  homestead  and  other  land  laws,  and  a  large 
proportion  of  the  settlers  secured  as  much  as  320  acres  of  land.  A 
further  contributing  cause  is  the  large  number  of  great  wheat  farms 
in  these  two  states.  .  .  . 

In  the  South  there  are  many  plantations,  some  of  very  large 
acreage,  which  have  been  divided  into  small  parcels  of  land  of  from 
20  to  80  acres,  each  leased  to  a  tenant.  The  operations  of  the  tenants 
are  often  so  completely  supervised  by  the  owner  that  the  plantation 
is  virtually  a  single  agricultural  unit,  but  in  the  census  statistics  the 
land  operated  by  each  tenant  is  classed  as  a  farm.  There  are  also 
in  the  South,  however,  large  numbers  of  rented  farms,  the  tenants 
of  which  are  substantially  independent  in  their  management.  The 
independent  tenant  system  of  the  South  is  more  or  less  like  the  tenant 
system  of  the  North  and  West,  but  there  is  little  similarity  between 
it  and  the  plantation  tenant  system.  The  plantation  operated  by 


DEVELOPMENT  OF  AGRICULTURE  635 

tenants,  is,  in  many  respects  more  like  the  large  northern  farm  oper- 
ated with  hired  labor  or  wage  hands.  .  .  . 

Among  the  various  states,  Illinois  with  $120.08  per  acre  and 
Iowa  with  $110.40  per  acre,  reported  the  highest  average  value  of  all 
farm  property  per  acre  of  farm  land  in  1910,  while  New  Mexico  re- 
ported the  lowest,  $14.15.  These  states  ranked  the  same  with  respect 
to  average  value  of  land  alone  per  acre,  the  amounts  being  $95.02, 
$82.58,  and  $8.77,  respectively.  In  the  average  value  of  buildings, 
however,  as  well  as  in  that  of  implements  and  machinery,  New  Jersey 
ranked  first,  with  Wyoming  lowest  in  respect  to  average  value  of 
buildings,  and  New  Mexico  lowest  in  respect  to  average  value  of 
implements  and  machinery.  In  the  average  value  of  live  stock  per 
acre,  Arizona  and  Iowa,  in  the  order  named,  outranked  the  other 
states  (not  counting  the  District  of  Columbia),  while  North  Carolina 
had  the  lowest  average.  In  Arizona,  however,  as  in  certain  other 
Western  states,  live  stock  is  largely  pastured  on  public  lands  and  a 
comparison  of  the  value  of  live  stock  with  the  acreage  of  land  in  farms 
has  little  significance. 

The  southern  divisions  of  the  country  in  general  showed  greater 
percentages  of  increase  in  the  value  of  all  farm  property  per  acre 
of  farm  land  during  the  decade  1900-1910  than  the  northern  divisions. 
The  West  South  Central  division  outranked  all  others  in  this  respect, 
with  an  increase  of  147.2  per  cent.  The  two  most  westerly  divisions, 
the  Pacific  and  Mountain,  ranked  second  and  third,  respectively,  in 
percentages  of  increase,  followed  by  the  South  Atlantic  and  the  West 
North  Central.  In  all  five  of  the  divisions  just  named  the  average 
value  of  all  farm  property  per  acre  of  land  was  more  than  twice  as 
high  in  1910  as  in  1900.  The  lowest  rate  of  increase,  33  per  cent, 
was  in  the  Middle  Atlantic  division.  .  .  . 

The  principal  factor  in  the  increase  in  the  average  value  of  farm 
property  as  a  whole  per  acre  of  land  in  farms  has  been  the  increase 
in  the  average  value  of  land  per  acre.  ...  In  five  of  the  nine  geo- 
graphic divisions,  namely,  the  four  west  of  the  Mississippi  River  to- 
gether with  the  South  Atlantic,  the  average  value  of  land  in  farms 
per  acre  was  more  than  twice  as  high  in  1910  as  in  1900;  and  in  the 
Mountain  division  it  was  more  than  three  times  as  high.  In  the  East 
North  Central  and  East  South  Central  divisions  the  increase  in  value 
of  farm  land  per  acre  exceeded  75  per  cent.  The  lowest  percentages 
of  increase  were  in  the  Middle  Atlantic  and  New  England  divisions, 
being  24.5  per  cent  and  40.5  per  cent,  respectively. 

In  the  United  States  as  a  whole,  and  in  most  of  the  divisions, 


636  READINGS  IN  ECONOMIC  HISTORY 

the  relative  increase  during  the  decade  in  the  average  value  of  build- 
ings, implements  and  machinery,  and  live  stock  per  acre  of  land  in 
farms  was  much  less  than  the  increase  in  the  average  value  per  acre 
of  the  land. 

The  highest  rates  of  increase  in  the  average  value  of  buildings 
per  acre  were  in  the  West  South  Central  division,  132.4  per  cent; 
the  Mountain,  106.8  per  cent;  the  South  Atlantic,  97.6  per  cent; 
and  the  Pacific,  89.9  per  cent.  In  every  state  the  average  value  of 
buildings  per  acre  of  land  in  farms  was  higher  in  1910  than  in  1900; 
in  Arizona  and  Oklahoma  it  was  more  than  three  times  as  great; 
and  in  1 6  other  states  it  was  more  than  double. 

B.  Distribution  of  Leading  Crops,  IQOQ  l 

The  leading  agricultural  crops  in  1909  were  corn,  wheat,  cotton,  hay  and  forage, 
oats,  vegetables,  fruits  and  tobacco.  Illinois  led  the  states  in  the  value  of  all  farm 
products,  after  which  came  Iowa,  Texas,  Ohio,  Georgia  and  Missouri: 

A  rapid  characterization  of  the  agriculture  in  the  three  great 
sections  of  the  country  may  be  expressed  as  follows:  In  the  North 
the  leading  crops,  in  order  of  value  in  1909,  were  corn,  hay  and  forage, 
wheat,  and  oats;  in  the  South  they  were  cotton,  corn,  vegetables, 
and  hay  and  forage;  and  in  the  West,  hay  and  forage,  wheat,  fruits 
and  nuts,  vegetables,  and  oats.  In  each  of  the  three  sections  the 
crops  named  together  constituted  about  four-fifths  of  the  total  value 
of  the  crops  produced  in  1909. 

Cereals  contributed  more  than  one-fourth  of  the  total  value  of 
crops  in  all  the  divisions  except  New  England  where  they  formed 
only  7.6  per  cent  of  the  total  value  of  crops  raised  in  1909.  The 
importance  of  these  crops  was  greatest  in  the  two  North  Central 
divisions,  the  value  forming  about  three-fourths  (75.4  per  cent)  of 
the  total  value  of  crops  in  the  West  North  Central  division,  and  about 
two- thirds  (65.4  per  cent)  in  the  East  North  Central.  In  the  remain- 
ing six  divisions  the  value  of  cereals  varied  from  about  one-fourth  to 
about  one- third  of  the  total  value  of  crops,  being  26.2  per  cent  in  the 
South  Atlantic  division  and  34.6  per  cent  in  the  Mountain  division. 

Except  in  the  Mountain  and  Pacific  divisions,  corn  was  the  most 
important  of  the  cereals  as  measured  by  value.  In  the  East  and 
West  North  Central  divisions  corn  contributed  more  than  one-third 
of  the  value  of  all  crops  in  1909  and  in  the  three  southern  divisions 
it  was  the  crop  second  in  importance.  Wheat  was  not  first  in  impor- 

1  Thirteenth  Census,  1910  (Washington,  1913),  Vol.  V,  540-1,  544-6- 


DEVELOPMENT  OF  AGRICULTURE  637 

tance  in  any  division,  but  was  second  in  the  West  North  Central  and 
Mountain  divisions  and  third  in  the  Pacific  division.  Oats  ranked 
third  among  the  several  crops  in  the  East  North  Central  and  Mountain 
divisions.  .  .  . 

Hay  and  forage  is  an  important  crop  in  the  North  and  West,  but 
not  in  the  South.  In  four  divisions  it  was  the  leading  crop.  In  New 
England  41.9  per  cent  of  the  total  value  of  crops  raised  in  1909  con- 
sisted of  the  value  of  hay  and  forage;  in  the  Mountain  division  the 
proportion  was  40.5  per  cent,  in  the  Middle  Atlantic  31.4  per  cent, 
and  in  the  Pacific  division  26.5  per  cent.  In  the  two  North  Central 
divisions  the  value  of  hay  and  forage  was  relatively  less  important; 
in  the  East  North  Central  division  it  ranked  second  among  the  crops, 
and  third  in  the  West  North  Central  division. 

Cotton  is  an  important  crop  only  in  the  three  southern  divisions; 
its  value  constituted  nearly  one-half  (49.9  per  cent)  of  the  total  value 
of  crops  in  the  West  South  Central  division,  about  two-fifths  (40.8 
per  cent)  in  the  South  Atlantic,  and  over  one-third  (37.1  per  cent) 
in  the  East  South  Central.  Tobacco  was  the  crop  third  in  importance 
in  the  East  South  Central  division. 

Vegetables  (including  potatoes  and  sweet  potatoes  and  yams) 
contributed  more  than  one-fifth  (21.5  per  cent)  of  the  value  of  all 
crops  in  New  England  in  1909  and  over  one-sixth  (17.4  per  cent)  of 
the  value  of  crops  in  the  Middle  Atlantic  states.  In  no  other  division 
was  the  value  of  vegetables  as  much  as  one-tenth  of  the  value  of  all 
crops.  Potatoes,  considered  alone,  was  the  crop  second  in  rank  in 
New  England  (forest  products  of  farms  being  excluded  from  considera- 
tion as  scarcely  constituting  a  crop  in  the  usual  sense) ,  and  vegetables, 
excluding  potatoes  and  sweet  potatoes  and  yams,  ranked  third  in 
the  three  divisions  along  the  Atlantic  seaboard. 

Fruits  and  nuts  contributed  more  than  one-fifth  (21.4  per  cent) 
of  the  total  value  of  crops  in  the  Pacific  division  and  nearly  one-tenth 
(9.6  per  cent)  of  the  value  of  crops  in  the  Middle  Atlantic  division. 
The  New  England  and  the  Mountain  divisions  are  the  only  others 
where  the  value  of  fruits  and  nuts  exceeded  5  per  cent  of  the  total 
value  of  crops  in  1909.  The  Pacific  division  was  the  only  one  in  which 
fruits  and  nuts  were  among  the  three  leading  crops. 

Forest  products,  which  are  not  ordinarily  looked  upon  as  a  farm 
crop,  contributed  exactly  one-eighth  of  the  total  value  of  crops  in 
New  England,  and  more  than  5  per  cent  of  the  value  of  crops  in  the 
South  Atlantic  and  East  South  Central  divisions.  Considerable 
amounts  of  these  products  were  reported  for  every  division,  but  only 


638  READINGS  IN  ECONOMIC  HISTORY 

in  the  three  divisions  mentioned  did  they  contribute  as  much  as  5 
per  cent  of  the  total  value  of  all  crops  in  1909.  .  .  . 

The  acreage  of  cereals  taken  as  a  group,  of  hay  and  forage,  and 
of  vegetables  taken  as  a  group,  is  widely  though  by  no  means  evenly 
distributed  through  the  country.  Cotton  and  sugar  cane  are  prac- 
tically confined  to  the  South  and  nearly  all  the  tobacco  is  raised 
east  of  the  Mississippi  River.  Among  the  minor  crops  peanuts  and 
sweet  potatoes  and  yams  are  almost  entirely,  and  hemp  is  very  largely, 
confined  to  the  South;  hops  are  practically  restricted  to  two  divisions, 
the  Pacific  and  the  Middle  Atlantic;  flaxseed  is  mainly  confined  to 
the  West  North  Central  division;  while  the  other  minor  crops  are  hi 
most  cases  largely  concentrated  in  three  or  four  divisions.  .  .  . 

When  judged  by  total  value  of  crops  raised,  Illinois  was  the  most 
important  agricultural  state  both  in  1909  and  in  1899;  the  total 
value  of  all  crops  in  that  state  in  1909  was  $372,270,000  and  in  1899, 
$214,833,000.  There  was  only  one  other  state,  Iowa,  where  the  total 
value  of  crops  raised  in  1009  exceeded  $300,000,000.  In  7  states, 
Texas,  Ohio,  Georgia,  Missouri,  Kansas,  New  York,  and  Indiana, 
the  total  value  of  crops  was  between  $200,000,000  and  $300,000,000. 
In  17  other  states  the  value  of  crops  in  1009  exceeded  $100,000,000 
each. 

Among  the  26  states  having  a  value  of  crops  in  excess  of  $100,000,- 
ooo  each  were  all  of  the  12  states  in  the  two  North  Central  divisions; 
2  of  the  3  states  in  the  Middle  Atlantic;  4  of  the  8  in  the  South  At- 
lantic; all  the  4  in  the  East  South  Central;  3  of  the  4  in  the  West 
South  Central;  and  i  of  the  3  in  the  Pacific,  no  state  in  the  New 
England  or  in  the  Mountain  division  being  included  in  the  26. 

The  absolute  increase  between  1899  and  1909  in  the  value  of  all 
crops  produced  exceeded  $100,000,000  in  seven  states,  namely: 
Illinois  ($157,438,000),  Georgia  ($140,250,000),  Texas  ($131,169,000), 
North  Dakota  ($126,595,000),  Iowa  ($119,114,000),  Nebraska  ($103,- 
656,000),  and  Kansas  ($101,337,000);  it  exceeded  $10,000,000  in  each 
of  the  states  of  the  Middle  Atlantic,  the  East  and  West  North  Central, 
the  East  and  West  South  Central,  and  the  Pacific  divisions,  as  well 
as  in  one  state  in  the  New  England  division  (Maine)  and  in  four  in 
the  Mountain  division;  the  increase  exceeded  $1,000,000  in  every 
state  except  Rhode  Island. 

The  percentage  of  increase  in  the  value  of  all  crops  between 
1899  and  1909  was  greatest  in  Idaho  (270.7  per  cent);  Washington, 
with  235.4  per  cent,  was  next,  followed  in  order  by  North  Dakota 
(234.3  per  cent),  Wyoming  (219.4  per  cent),  Oklahoma  (205  per  cent), 


DEVELOPMENT  OF  AGRICULTURE  639 

and  Colorado  (200.4  Per  cent).  Most  of  the  states  with  very  high 
percentages  of  increase  had  comparatively  small  aggregate  crop  values 
in  1899  and  show  absolute  increases  that  are  not  exceptionally  great. 
Georgia,  North  Dakota,  and  Nebraska  are  the  only  states  where  the 
increase  in  the  value  of  all  crops  between  1899  and  1909  exceeded 
$100,000,000  and  was  also  more  than  100  per  cent. 

Of  the  states  in  the  West  every  one  except  California  shows  an 
increase  in  the  value  of  all  crops  of  over  100  per  cent;  of  the  states 
in  the  South,  four  on  the  Atlantic  coast  (Florida,  Georgia,  South 
Carolina,  and  North  Carolina)  and  two  in  the  Southwest  (Oklahoma 
and  Arkansas)  more  than  doubled  the  value  of  their  crops  during 
the  last  decade;  but  of  the  states  in  the  North  only  three,  North  and 
South  Dakota  and  Nebraska,  show  an  increase  of  more  than  100  per 
cent  in  the  value  of  their  crops.  No  state  in  the  New  England,  Middle 
Atlantic,  or  East  North  Central  divisions  shows  an  increase  in  the 
value  of  crops  as  great  as  that  for  the  United  States  as  a  whole 
(83  per  cent). 

While  there  was  no  state  reporting  a  decrease  in  the  total  value  of 
crops  in  1009  as  compared  with  1899,  there  were  18  states  reporting 
a  decrease  in  known  crop  acreage.  It  may  be  noted  that  9  of  the  13 
original  states  are  among  those  reporting  losses  in  crop  acreage.  Of 
the  Western  states,  California  is  the  only  one  reporting  a  decrease  and 
of  the  Southern  states,  Virginia,  West  Virginia,  Kentucky,  Tennessee, 
and  Maryland  reported  decreases,  while  of  the  Northern  states  a  major- 
ity reported  decreases  in  crop  acreage,  the  four  states  on  the  western 
boundary  of  the  West  North  Central  division  (North  and  South 
Dakota,  Nebraska,  and  Kansas)  being  the  only  ones  in  the  North 
to  report  a  higher  percentage  of  increase  in  crop  acreage  than  the 
United  States  as  a  whole.  During  the  decade  there  was  an  increase 
of  over  1,000,000  acres  in  land  devoted  to  crops  in  North  Dakota, 
Oklahoma,  South  Dakota,  Texas,  Nebraska,  Kansas,  Washington, 
Georgia,  and  Colorado.  New  Mexico  reported  the  highest  percentage 
of  gain,  222.8,  followed  by  North  Dakota,  Oklahoma,  Wyoming, 
Washington,  and  Idaho.  In  Iowa  and  in  California  the  loss  in  acre- 
age reported  was  over  1,500,000,  and  in  New  York  and  Pennsylvania 
it  exceeded  500,000.  In  California  the  increase  in  the  acreage  of 
fruit  and  nut  crops  doubtless  in  part  if  not  wholly  offset  the  decrease 
in  crops  for  which  acreage  was  reported.  Besides  these  4  states  14 
others  reported  less  land  in  crops  for  which  acreage  was  reported  in 
1909  than  in  1899.  The  relative  decrease  was  greatest  in  California, 
followed  by  New  Hampshire,  Connecticut,  and  Massachusetts. 


640  READINGS  IN  ECONOMIC  HISTORY 


VII.    THE  PUBLIC  DOMAIN 

Extent  and  Character,  1898  1 

Although  the  frontier  line  disappeared  during  the  decade  1870-1880,  there 
yet  remain  millions  of  acres  of  public  lands.  Much  of  this  land  is  not  adapted 
to  known  agricultural  methods,  but  there  is  reason  to  believe  that  as  scientific 
agriculture  progresses  more  and  more  of  this  land  will  be  brought  under  cultiva- 
tion. The  extent  and  character  of  the  public  domain  in  1898  were  described  in 
an  official  publication  as  follows: 

There  are  within  the  limits  of  the  United  States,  exclusive  of 
Alaska  and  the  new  island  possessions,  nearly  573,995,000  acres  of 
vacant  Government  land,  besides  145,122,000  acres  in  Indian  reser- 
vations, forest  reserves,  national  parks,  reservoir  sites,  and  military 
reservations,  or  for  some  other  reason  reserved  from  settlement.  The 
vast  area  of  Alaska,  which  is  very  nearly  all  public  land,  together  with 
lesser  areas  in  Hawaii,  Puerto  Rico,  and  other  new  dependencies,  will 
bring  up  the  total  extent  of  the  national  domain,  exclusive  of  reser- 
vations, to  nearly  1,000,000,000  acres.  .  .  . 

Future  additions  to  the  reservations  for  permanent  forests  and 
reservoir  sites  will  no  doubt  diminish  the  area  open  to  settlers,  but 
these  additions  are  likely  to  be  counterbalanced  in  whole  or  in  part 
by  the  opening  of  Indian  and  military  reservations  to  settlement. 
The  i  ,000,000  acres  granted  to  each  of  the  arid  States  by  the  so-called 
"  Carey  act "  will  still  further  reduce  the  amount  of  land  to  be  obtained 
by  settlers  directly  from  the  National  Government,  but  doubtless 
without  reducing  the  total  amount  of  public  land  available  for  settle- 
ment. At  the  present  rate  of  disposal  to  individuals,  the  vacant  lands 
in  the  United  States  proper  would  last  for  nearly  a  century.  .  .  . 

In  the  case  of  land  grants  in  aid  of  railroad  construction,  lands 
within  the  limits  of  the  grants  are  considered  "unappropriated  and 
unreserved"  until  selected  by  the  grantee,  though  it  is  not  certain 
that  the  usage  of  the  various  land  offices  is  uniform  in  this  respect. 
It  follows  from  this  mode  of  classification  that  to  ascertain  the  amount 
of  land  still  available  for  entry  a  deduction  should  be  made  from  the 
amount  given  as  "unappropriated  and  unreserved"  to  represent  that 
portion  of  railroad  grants  not  yet  selected  by  the  railroad  companies. 
While  no  exact  figures  are  available  for  this  purpose,  the  General 
Land  Office  estimates  the  total  amount  of  land-  granted  to  aid  in 

1  Yearbook  of  the  Department  of  Agriculture,  1898  (Washington,  1899),  325, 


DEVELOPMENT  OF  AGRICULTURE  641 

railroad  construction  at  156,893,468  acres,  and  as  the  amount  patented 
up  to  July  i,  1898,  was  but  88,947,862  acres,  the  remainder  is  a  little 
less  than  68,000,000  acres.  It  is,  however,  very  unlikely  that  patents 
will  actually  issue  to  the  grantees  for  half  that  quantity  of  land,  for 
some  portions  of  the  grants  had  been  appropriated  by  settlers  before 
the  grants  were  made,  and  still  larger  areas  are  so  mountainous  and 
barren  as  to  be  scarcely  worth  selecting  and  patenting.  A  deduction 
of  25,000,000  acres  from  the  area  unappropriated  and  unreserved 
would  probably  be  sufficient  to  cover  future  patents  on  account  of 
railroad  land  grants.  These  grants  consist  of  the  alternate  sections 
lying  within  wide  strips  of  territory  crossing  the  western  part  of  the 
United  States,  and  in  some  cases  indemnity  land?  have  been  granted 
beyond  the  limits  of  the  original  grants.  The  Northern  Pacific  Rail- 
road grant  extends  in  a  band  40  miles  wide  across  Minnesota  and  80 
miles  wide  across  North  Dakota,  Montana,  the  northern  end  of  Idaho, 
and  Washington;  the  Union  Pacific  and  Central  Pacific  Railroad 
grants  are  in  a  strip  40  miles  wide  extending  from  the  Missouri  River 
across  Nebraska,  southern  Wyoming,  northwestern  Utah,  Nevada,  and 
California,  to  San  Francisco,  with  branches  in  Colorado  and  Kansas 
and  northward  through  California  and  Oregon;  the  Atlantic  and 
Pacific  and  Southern  Pacific  Railroad  grants  extend  from  the  Rio 
Grande  in  New  Mexico  across  Arizona  and  California  to  San  Jose, 
with  a  branch  to  the  southeastern  corner  of  California.  There  are 
also  many  smaller  grants  in  the  more  easterly  public-land  States, 
besides  several  wagon-road  grants  in  Oregon  and  elsewhere. 

PUBLIC   LANDS   FIT  FOR   PRODUCTIVE   USES 

Far  more  important  than  the  exact  area  of  the  public  domain 
legally  open  to  settlement  is  the  question  how  much  of  this  public 
land  is  actually  fit  for  cultivation  or  for  other  productive  uses.  Having 
regard  to  present  conditions,  it  must  be  admitted  that  all  the  best 
parts  of  the  public  domain  have  been  appropriated,  and  that  compara- 
tively very  little  good  agricultural  land  remains  open  to  settlement; 
the  mineral  value  of  that  which  remains  may  be  very  great,  but  even 
of  the  mineral  deposits  it  may  be  said  that  the  most  accessible  and  most 
easily  worked  among  them  have  probably  been  appropriated.  Look- 
ing into  the  future,  the  question  becomes  much  more  difficult,  for  no 
one  can  tell  even  approximately  how  much  of  the  land  now  lying  waste 
may  be  ultimately  reclaimed  to  productive  uses.  The  one  thing 
needed,  as  far  as  concerns  the  greater  part  of  the  573,995,000  acres 
of  vacant  public  land  in  the  United  States  proper,  including  nearly 


642  READINGS  IN  ECONOMIC  HISTORY 

all  west  of  the  ninety-eighth  or  one  hundredth  meridian,  is  an 
adequate  supply  of  water;  and  this  applies  to  much  of  the  mineral 
land,  as  well  as  to  that  which  it  is  desired  to  reclaim  for  agri- 
cultural purposes.  Vast  tracts  of  arid  land  in  the  Western  United 
States  contain  in  an  unusual  degree  all  the  elements  of  fertility 
except  water,  and  with  the  aid  of  irrigation  could  be  made  to 
yield  more  abundantly  than  even  the  best  land  of  the  humid  regions. 
It  has  been  said  that  "sagebrush  is  unerring  evidence  of  kindly  soil 
and  abundant  sunshine." 

Estimates  of  the  amount  of  this  land  which  can  be  irrigated  with 
the  water  at  command  vary  greatly,  but  there  is  none  for  the  arid 
region  as  a  whole  more  authoritative  than  those  of  Maj.  J.  W.  Powell, 
formerly  Director  of  the  United  States  Geological  Survey,  and  Mr. 
F.  H.  Newell,  chief  hydrographer  of  that  Survey.  Major  Powell 
estimated  that  at  least  150,000  square  miles,  or  96,000,000  acres, 
could  be  economically  reclaimed  by  irrigation  within  the  present 
generation;  or,  as  he  said  before  a  Congressional  committee  in  1890, 
that  about  100,000,000  acres  could  be  reclaimed  by  the  utilization 
of  perennial  streams  alone.  Mr.  Newell  places  the  irrigable  amount 
at  74,000,000  acres  or  about  7.6  per  cent  of  the  total  area  of  the  sixteen 
Western  public-land  States  and  Territories.  This  is  a  very  conserv- 
ative estimate,  in  which  financial  as  well  as  engineering  considerations 
are  taken  into  account,  and  it  looks  not  to  the  remote  future,  but 
only  to  what  is  likely  to  be  profitable  and  therefore  practicable  within 
a  generation.  Future  improvements  in  irrigation  engineering  and 
methods  and  discoveries  of  new  underground  water  supplies,  together 
with  the  increasing  demand  for  agricultural  products  resulting  from 
an  increasing  population,  may  in  the  course  of  time  make  it  profitable 
to  irrigate  a  much  larger  area;  but  any  attempt  to  state  the  ultimate 
extent  of  irrigation  would  be  only  conjecture.  The  amount  of  land 
irrigated  in  1889,  the  latest  year  for  which  census  figures  are  available, 
was  in  most  of  the  arid  States  so  small  in  proportion  to  the  estimated 
irrigable  area  as  to  be  almost  negligible  in  a  rough  calculation,  so  that 
it  will  not  be  far  from  the  truth  to  take  Mr.  Newell's  conservative 
figures  as  representing  the  probable  future  increase  of  the  irrigated 
area.  But  it  must  be  remembered  that  some  part  of  the  lands  to  be 
reclaimed  will  probably  be  lands  now  in  private  ownership.  Although 
the  area  now  irrigated  is  very  small  as  compared  with  the  total  irri- 
gable area,  the  canals  and  ditches  already  constructed  take  most  cf 
the  water  which  is  easily  obtainable,  and  the  future  development  of 
the  West  depends  mainly  upon  the  construction  of  storage  reservoirs 


DEVELOPMENT  OF  AGRICULTURE  643 

and  large  canals,  or  other  difficult  and  expensive  undertakings  which 
are  beyond  the  power  of  individuals  or  small  groups  of  individuals. 
Much  will  therefore  depend  upon  the  policy  adopted  for  attracting 
capital  to  the  irrigation  industry.  It  is  evident  that  the  work  of 
reclamation  must  be  undertaken  either  by  public  agencies  or  by  large 
corporations. 


CHAPTER  XIX 

COMMERCE,  TRANSPORTATION,  AND  COMMUNICATION, 

1866-1915 

I.  INTERNAL  AND  FOREIGN  COMMERCE 

A.    Extent  and  Growth,  1850-1909 l 

The  growth  of  the  internal  and  the  foreign  commerce  of  the  United  States  since 
1850  reflects  accurately  the  economic  progress  of  the  country.  The  extent  of 
this  growth  is  shown  in  the  following  summary: 

Conservation  and  commerce  are  so  closely  allied  and  the  latter, 
commerce,  so  much  affected  by  the  application  of  the  former,  conser- 
vation, that  a  very  few  words  on  commerce  may  not  be  inappropriate 
to  this  discussion  of  conservation.  This  seems  particularly  true  in 
case  the  discussion  should  relate  especially  to  internal  commerce, 
or  the  exchanges  of  our  own  people  among  themselves.  True,  the 
foreign  commerce  of  the  United  States  has  grown  from  $300,000,000 
hi  1850  to  $3,000,000,000  in  the  fiscal  year  1908,  being  to-day  prac- 
tically ten  times  as  much  as  in  1850;  while  population  meantime 
was  growing  from  23,000,000  to  86,000,000,  the  per  capita  foreign 
commerce  thus  being  $13.71  in  1850  and  in  the  fiscal  year  1908,  $34.74, 
an  increase  of  about  150  per  cent  in  the  per  capita  value  of  our  foreign 
commerce.  In  internal  commerce,  however,  which  seems  more  closely 
related  to  the  question  of  conservation,  perhaps  because  of  its  greater 
importance  than  the  foreign  commerce  and  of  its  closer  relation  to 
the  people  in  their  every-day  life  —  in  internal  commerce  the  growth 
has  been  much  greater,  the  internal  commerce  of  the  United  States 
having  been  valued  at  $2,000,000,000  in  1850  and  over  $28,000,000,000 
in  1907,  being  thus  practically  fourteen  times  as  much  in  1907  as  in 
1850;  while  the  per  capita  value  of  the  internal  commerce,  which  in  1850 
was  $86,  was  in  1907,  $315.  Thus,  while  foreign  commerce  is  to-day 
ten  times  as  much  as  in  1850,  internal  commerce  is  fourteen  times  as 
much  as  at  that  period;  and  the  per  capita  of  the  foreign  commerce 

1  Report  of  the  National  Conservation  Commission  (Washington,  1909),  II, 
57-8- 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  645 

is  now  practically  three  times  as  great  as  in  1850,  while  the  per  capita 
value  of  the  internal  commerce  is  now  practically  four  times  as  much 
as  in  1850.  The  internal  commerce  of  the  United  States,  including 
in  this  term  merely  a  single  transaction  in  all  the  merchandise  form- 
ing the  exchanges  among  our  own  people,  was  in  1850  practically 
seven  times  as  great  as  the  entire  foreign  commerce,  and  in  1907 
was  nine  times  as  great  as  the  entire  foreign  commerce,  and  equaled 
in  value  all  of  the  imports  plus  all  of  the  exports  of  every  nation  of 
the  world. 

The  measurement  of  the  internal  commerce  of  the  United  States 
is  arrived  at  by  a  process  entirely  different  from  that  by  which  the 
foreign  commerce  is  measured.  In  determining  the  value  of  the 
foreign  commerce,  we  require  from  every  importer  and  every  exporter 
a  statement  of  the  true  value  of  the  merchandise  which  he  is  importing 
or  exporting,  and  aggregating  these  imports  of  all  ports  and  exports 
of  all  ports  we  get  the  grand  total  of  our  foreign  trade,  which  in  the 
fiscal  year  1008  aggregated,  as  already  indicated,  $3,000,000,000, 
against  a  little  more  than  $300,000,000  in  1850.  To  measure  the 
internal  commerce  of  the  country  is  more  difficult,  however,  since 
there  are  no  gateways  through  which  it  passes  and  at  which  a  state- 
ment of  its  Value  may  be  required.  It  is  possible,  however,  by  a  dif- 
ferent process  to  determine  the  value  of  the  merchandise  which  passes 
from  hand  to  hand  for  consumption  within  the  United  States;  and 
as  statements  of  foreign  commerce  include  merely  the  value  of  the 
articles  comprising  it,  the  measurement  of  the  internal  commerce 
by  a  statement  of  the  value  of  the  articles  which  it  includes,  and  thus 
of  a  single  transaction  in  those  articles,  seems  to  be  a  logical  and  fair 
one.  We  may,  therefore,  assume  that  if  we  can  determine  the  value 
of  the  articles  which  form  the  internal  commerce  the  measurement 
may  at  least  approximate  in  accuracy  the  measurement  of  the  for- 
eign commerce  to  which  we  are  more  accustomed. 

Fortunately,  we  are  able  to  determine  at  certain  dates  in  our  na- 
tional history  the  value  of  at  least  the  principal  articles  entering  the 
internal  commerce  of  the  country.  The  census  shows  the  value  of 
manufactures,  of  agricultural  products,  the  products  of  the  mines, 
the  fisheries;  and  the  record  of  imports  shows  the  value  of  merchan- 
dise brought  in  from  foreign  countries  and  subsequently  entering  the 
internal  commerce.  By  aggregating  these  stated  values  at  the  place 
of  production  of  the  principal  articles  entering  the  internal  commerce 
of  the  country  and  adding  a  reasonable  sum  as  the  probable  cost  of 
transporting  them  to  the  consumer,  we  may  at  least  approximate 


646  READINGS  IN  ECONOMIC  HISTORY 

the  value  of  the  merchandise  consumed  among  our  own  people,  a 
single  transaction  in  which  may  be  properly  accepted  as  a  measure- 
ment of  the  value  of  the  internal  commerce.  The  census  of  1000 
showed  the  value  of  manufactures  in  the  United  States  to  be  $13,000,- 
000,000;  of  products  of  agriculture,  practically  $4,000,000,000;  and 
of  minerals,  about  $1,000,000,000.  The  importations  of  1900  were 
practically  $1,000,000,000  in  value.  Adding  to  these  the  products 
of  the  forests  and  fisheries  and  the  increased  value  of  all  products 
due  to  transportation  from  the  place  of  production  to  the  purchaser, 
we  may  fairly  set  down  the  value  of  the  internal  commerce  of  the 
country  as  measured  by  a  single  transaction  in  those  articles  at 
$20,000,000,000  in  the  year  1000. 

Applying  this  method  to  earlier  and  more  recent  years,  I  find  that 
the  value  of  the  internal  commerce  of  the  country  may  be  reasonably 
estimated  at  $2,000,000,000  in  1850,  $3,500,000,000  in  1860,  $5,000,- 
000,000  in  1870  (gold  value),  $7,750,000,000  in  1880,  $12,000,000,000 
in  1800,  $20,000,000,000  in  1900,  and  $28,000,000,000  in  1907,  the 
last  named  year  being  estimated  upon  the  census  figures  of  manufac- 
tures for  1905,  the  Agricultural  Department's  estimate  of  the  value 
of  farm  products  in  1007,  the  Geological  Survey  estimate  of  the  value 
of  mineral  products,  and  the  stated  value  of  imports  of  that  year. 
Comparing  these  with  the  census  figures  of  population,  we  get  the 
per  capita  value  of  the  internal  commerce  in  1850,  $86;  in  1860, 
$m;  in  1870,  $132;  in  1880,  $154;  in  1800,  $192;  in  1900,  $261; 
and  in  1907,  $326.  Meantime  the  per  capita  wealth  has  grown, 
according  to  the  census  figures,  from  $307  in  1850  to  $514  in  1860; 
$780  in  1870;  $850  in  1880;  $1,039  in  1890;  $1,165  in  1900;  and 
$1,310  in  1004,  the  latest  year  for  which  estimates  have  been  made, 
the  increase  in  per  capita  wealth  having  been  slightly  greater  than 
the  increase  in  per  capita  of  internal  commerce. 

B.     Character  of  the  Internal  Trade,  1899  1 

The  character  of  the  internal  trade  of  the  country  in  so  far  as  it  relates  to 
the  channels  through  which  the  goods  are  distributed  was  well  put  in  the  Report 
of  the  Industrial  Commission  as  follows: 

Increase  in  the  production  of  goods  is  not  necessarily  accompanied 
by  a  corresponding  increase  in  the  prosperity  of  wholesale  and  retail 
trade.  Some  classes  of  goods  are  sold  only  to  large  consumers,  and 
to  a  considerable  extent  go  directly  from  the  producer  to  them. 

1  Final  Report  of  the  Industrial  Commission  (Washington,  1902),  Volume 
XIX  of  the  Commission's  Report,  545-9. 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  647 

Changes  in  business  methods  may  tend,  and  doubtless  during  recent 
years  have  tended,  to  increase  the  proportion  of  the  product  which  is 
thus  sold  without  the  intermediary  service  of  independent  dealers. 
Many  other  conditions  of  trade  and  commerce  may  change  independ- 
ently of  the  general  state  of  productive  industry.  On  the  whole, 
however,  there  can  be  no  question  that  wholesale  and  retail  business 
has  shared  largely  in  the  general  advance  in  prosperity  which  has 
characterized  the  past  three  or  four  years.  .  .  . 

One  thing  is  made  clear  by  the  investigation  of  the  Industrial 
Commission.  The  importance  of  the  middleman  between  the  pro- 
ducer and  the  retail  dealer  is  diminishing,  and  in  some  instances  retail 
dealers  themselves  are  being  displaced  by  the  practice  of  direct  selling 
by  manufacturers.  In  the  days  when  manufacturing  establishments 
were  for  the  most  part  small  and  when  retail  stores  were  likewise 
small,  it  was  almost  out  of  the  question  for  the  manufacturer  and  the 
retailer  to  deal  directly  with  one  another.  The  manufacturer  would 
have  had  to  incur  an  expense  which  would  be  enormous  in  proportion 
to  the  value  of  his  goods,  if  he  sought  to  bring  them  to  the  notice  of 
scattered  small  retail  dealers.  Most  classes  of  manufactured  products 
were  therefore  handled  by  jobbers  or  commission  men.  The  jobber 
bought  goods  outright  from  the  manufacturer,  assuming  the  risk 
of  sale  as  well  as  enjoying  a  considerable  part  of  the  profit  coming 
from  fluctuations  in  the  market.  The  commission  dealer  acted 
rather  as  an  agent  of  the  producer,  receiving  a  percentage  upon  the 
sales  which  he  effected. 

At  present  there  seems  to  be  a  very  marked  decline  in  the  jobbing 
business  and,  to  a  less  extent,  a  decline  also  in  the  commission  business. 
The  latter  suffers  less,  because  under  modern  methods  goods  ordered 
through  a  commission  broker  can  be  shipped  directly  from  the  pro- 
ducer to  the  retailer  or  consumer,  without  the  expense  of  rehandling 
and  double  freighting,  which  is  usually  incurred  in  the  jobbing  business. 
Both  classes  of  middlemen  are,  however,  to  a  considerable  extent 
being  displaced.  The  increase  in  the  size  of  manufacturing  estab- 
lishments makes  it  possible  for  many  producers  to  maintain  regular 
selling  departments,  the  expense  of  which  is  distributed  over  so  large 
a  business  as  to  become  less  than  that  of  employing  middlemen.  In 
some  cases  manufactures  are  selling,  to  a  considerable  extent,  directly 
to  small  consumers  without  even  the  aid  of  retail  dealers.  Sale 
direct  from  the  factory,  often  by  delivery  on  approval,  is  increasingly 
common,  while  not  a  few  large  manufacturers  maintain  retail  stores 
in  various  cities. 


648  READINGS  IN  ECONOMIC  HISTORY 

The  practice  of  making  direct  sales  to  retailers  or  consumers  has 
been  especially  common  in  the  case  of  the  great  industrial  combina- 
tions. The  Standard  Oil  Company  long  ago  adopted  the  system  in 
most  of  its  markets.  The  Pittsburg  Plate  Glass  Company,  which 
has  a  large  control  of  the  plate-glass  business  in  this  country,  has 
established  distributing  branches  which  have  tended  largely  to  drive 
out  the  jobbers.  It  is  asserted  by  the  officers  of  the  company  in  this 
case  that  their  action  was  forced  by  the  dictatorial  conduct  of  the 
jobbers,  who  had  a  national  association  and  endeavored  to  dictate 
to  the  manufacturers  to  what  jobbers  they  should  sell.  In  other  cases 
the  elimination  of  the  jobber  is  merely  a  matter  of  evolution,  of  sim- 
plification. One  witness,  however,  who  has  had  large  experience  in 
wholesale  business,  as  well  as  in  the  management  of  various  industrial 
combinations,  points  out  that  producers  must  exercise  great  care  in 
endeavoring  to  economize  by  doing  away  with  middlemen.  Some 
kinds  of  business  permit  this  method  of  selling  more  readily  than 
others.  Especially  where  goods  are  sold  on  the  basis  of  popular 
trade-marks  and  brands,  the  method  of  direct  sales  to  retailers  is 
likely  to  prove  advantageous. 

Another  powerful  influence  which  has  tended  to  reduce  the  im- 
portance of  the  wholesale  dealer  has  been  the  great  increase  in  the 
size  of  retail  establishments  in  many  cases.  Department  stores  buy 
goods  of  many  classes,  often  in  exceedingly  large  quantities,  in  some 
cases  purchasing  the  entire  output  of  mills.  Moreover,  many  stores 
dealing  in  special  classes  of  articles  have  so  developed  that  their 
purchases  are  on  a  scale  much  larger  than  before.  These  large 
retailers,  therefore,  tend  more  and  more  to  deal  directly  with  manu- 
facturers, in  fact  often  ordering  in  advance  of  actual  production  the 
particular  styles  which  they  desire.  This  latter  practice  relieves  the 
manufacturer  of  risk,  minimizing  the  time  between  the  production 
and  the  consumption  of  goods.  .  .  . 

It  is  very  generally  asserted  that  the  consumer  benefits  largely 
by  the  increased  directness  of  the  process  by  which  goods  are  brought 
to  him  from  the  manufacturer.  The  elimination  of  the  middleman 
is  an  elimination  of  expense.  This  same  tendency  to  eliminate  the 
middleman  is  seen  in  the  handling  of  agricultural  products  as  well  as 
of  manufactured  commodities,  and  it  is  probable  that  a  saving  to  the 
entire  community  has  been  affected. 

Accurate  information  regarding  the  extent  to  which  middlemen 
have  already  been  displaced  can  not  be  secured.  One  witness  asserts 
that  the  number  of  dry-goods  jobbing  houses  in  New  York  a  few 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  649 

years  ago  was  twenty-eight,  and  that  they  have  now  been  reduced 
to  four,  which,  while  larger  than  the  average  of  the  former  establish- 
ments, do  much  less  total  business  than  they  did.  A  similar  condi- 
tion obtains  hi  the  Boston  dry-goods  business.  Again,  it  is  said  that 
the  larger,  part  of  the  cotton  goods  produced  in  New  Bedford  is  sold 
directly  to  retailers,  although  commission  houses  still  do  a  large  busi- 
ness in  cottons  produced  in  New  England. 

Somewhat  in  advance  of  the  movement  toward  consolidation  on 
the  part  of  producers  came  the  concentration  of  retail  business  in 
large  stores.  The  department  store,  which  is  really  a  consolidation 
of  smaller  stores  handling  different  lines  of  goods,  dates  back  to  the 
period  immediately  following  the  civil  war,  and  seems  to  be  due  to  the 
changes  in  the  methods  of  conducting  business  which  developed  about 
that  time.  Prices  were  falling,  the  margin  of  profit  was  growing 
smaller,  and  it  became  necessary  for  merchants  to  turn  over  their 
stocks  rapidly.  They  thus  needed  larger  capital  and  new  sales 
methods. 

While,  from  the  nature  of  things,  there  can  not  be  such  concentra- 
tion in  retail  trade  as  in  production  or  in  wholesale  trade,  and  while 
for  that  reason  department  stores  have  not  multiplied  with  the  same 
remarkable  rapidity  as  have  industrial  combinations,  there  neverthe- 
less seems  to  be  a  constant  movement  toward  the  concentration  of 
retail  trade,  and  department  stores  are  to  be  found  in  all  parts  of  the 
country. 

A  feature  connected  with  the  establishment  of  such  stores,  which 
has  been  the  subject  of  more  or  less  complaint,  has  been  the  intro- 
duction of  mail-order  departments,  by  means  of  which  customers 
living  at  a  distance,  who  are  unable  to  avail  themselves  in  person  of  the 
advantages  of  the  department  stores,  with  their  large  and  varied  stocks, 
are  enabled  to  make  purchases  by  mail. 

There  can  be  no  doubt  that  the  establishment  of  the  mail-order 
system  tends  to  decrease  the  sales  of  the  local  dealer,  and  that  he  has 
reason  to  view  its  growth  with  a  certain  degree  of  apprehension. 
Manifestly,  there  must  be  somewhat  narrow  limits  to  the  growth 
of  the  system,  since  in  the  case  of  a  very  large  majority  of  the  lines 
of  goods  carried  by  department  stores,  satisfactory  purchases  are 
possible  only  after  personal  inspection  of  the  goods.  In  so  far  as 
the  mail-order  system  exists,  however,  it  must  exist  because  the  people 
in  the  small  towns  can  not  be  served  so  satisfactorily  by  their  home 
stores  as  they  can  be  by  the  department  stores  in  the  large  cities. 
The  first  consideration  is  doubtless  the  greatest  good  to  the  greatest 


650  READINGS  IN  ECONOMIC  HISTORY 

number,  and  if  customers  find  the  mail-order  system  of  advantage 
there  is  every  reason  for  its  continuance.  .  .  . 

There  seems  to  be  no  doubt  that  the  department  stores  are  tending 
to  eliminate  the  jobbers,  and  are,  to  a  considerable  extent  at  least, 
crowding  out  the  small  retail  dealers.  There  are  apparently  few 
instances  in  which  the  department  store  has  destroyed  the  business 
of  the  retailers  by  unfairly  lowering  prices,  only  to  raise  them  again 
when  a  monopoly  has  been  secured.  In  the  smaller  towns  or  cities, 
where  but  one  department  store  is  to  be  found,  the  crowding  out  of 
the  small  retailers  might  result  in  monopoly  on  the  part  of  the  depart- 
ment store.  In  the  larger  cities,  where  several  department  stores 
are  to  be  found  in  competition  with  each  other,  there  can  be  no  ele- 
ment of  monopoly  in  the  business,  and  the  success  of  the  department 
store  must  be  attributed  to  the  fact  that  the  public  finds  it  more  to 
its  advantage  to  trade  at  the  large  stores  than  at  the  smaller  stores. 
The  department  store,  with  the  large  capital  at  its  command  and  with 
the  large  purchases  it  must  necessarily  make  at  one  time,  is  no  doubt 
able  to  buy  goods  at  lower  prices  than  the  small  dealers.  Further- 
more, if  rightly  managed,  the  department  store  must  be  able  to  make 
great  economies  in  rent,  cost  of  superintendence,  office  expenses,  and, 
possibly,  in  clerk  hire.  If  these  advantages  are  shared  with  the  public, 
the  result  must  of  necessity  be  lower  prices  and  consequent  benefit. 
In  the  absence  of  monopoly,  which  in  general  seems  to  be  the  situa- 
tion to-day,  the  establishment  of  department  stores  must  be  regarded 
as  being  on  the  whole  advantageous  to  the  consuming  public. 

It  is  perhaps  not  so  easy  to  determine  what  has  been  their  effect 
upon  labor.  The  representatives  of  the  department  stores  and  of 
the  small  stores  appear  to  hold  antipodal  opinions  on  this  point. 
The  representatives  of  the  department  stores,  on  the  one  hand,  claim 
that  the  establishment  of  the  large  stores  has  resulted  in  the  reduction 
of  prices,  has  thereby  stimulated  consumption,  and  therefore  in- 
creased employment,  both  in  the  manufacture  of  goods  and  in  their 
distribution,  and  that  more  than  the  total  number  of  competent 
persons  thrown  out  of  employment  in  the  small  stores  by  the  compe- 
tition of  department  stores  are  given  employment  in  the  department 
stores  themselves.  They  assert  further  that  wages  are  also  higher 
and  hours  of  labor  fewer  in  the  department  stores  than  in  the  small 
stores;  that  an  employee  in  a  large  department  store  may  easily  hold 
a  more  important  position  than  if  working  for  himself;  and  that 
employees,  instead  of  having  their  individuality  destroyed  by  em- 
ployment in  the  department  store,  frequently  identify  themselves 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  651 


with  the  interests  of  the  concern  and  take  pride  in  the  establishment. 
The  small  dealers,  on  the  other  hand,  claim  that  fewer  people  are  now 
employed  and  that  wages  have  been  very  much  reduced  through  the 
establishment  of  department  stores.  There  has  not  been  sufficient 
statistical  investigation  to  make  it  possible  to  determine  the  com- 
parative value  of  these  conflicting  opinions  in  respect  to  the  effect  of 
the  department  stores  on  employment  and  on  wages. 

Some  department  stores  may  be  guilty  of  fraudulent  advertising, 
but  this  does  not  seem  to  be  an  inherent  quality  of  the  department 
store,  but  to  depend  rather  on  the  character  of  the  men  in  charge, 
and  is  to  be  found  in  connection  with  the  small  stores  as  well  as  with 
the  large  stores. 

II.  THE  MERCHANT  MARINE 

A.   American  and  Foreign  Vessels  in  the  Carrying  Trade  of  the  United 
States,  1860-1910  [ 

The  extent  to  which  American  vessels  engaged  in  the  foreign  trade  of  this 
country  is  indicated  below. 

i.     FOREIGN  CARRYING  TRADE  OF  THE  UNITED  STATES,  1860-1910 


Year 

In  Cars 
and  Other 
Land 
Vehicles 

In  American 
Vessels 

In  Foreign 
Vessels 

Per  Cent 
Carried  in 
American 
Vessels 

1860   

$507,247,757 

$  2^,04.0,  703 

66  5 

186=;.  . 

167,402,872 

437,010,124 

27   7 

1870  

352,969,401 

638,927,488 

35   6 

i8?<; 

$  20,388,235 

•*I4,2=;7,7Q2 

884,788,517 

26    I 

1880  

20,081,^0^ 

258,  346,  ?77 

,224,265,434 

17  4. 

1881;.  . 

45,332,775 

194,865,743 

,079,518,566 

I  ?    ?    • 

I8OO.    . 

73,571,263 

202,451,086 

,371,116,744 

12  .0 

180=; 

83,104,742 

170,507,196 

,285,896,192 

II    7 

IQOO.  .  . 

i=C4,8o=;,6!;o 

10^,084,102 

,894,444,424 

92 

IQOs  .  . 

242,265,329 

290,607,946 

2,103,201,462 

.121 

IQIO  

319,132,528 

260,837,147 

2,721,962,475 

8  7 

194-6. 


Annual  Report  of  the  Commissioner  of  Navigation,  1912  (Washington,  1912), 


652 


READINGS  IN  ECONOMIC  HISTORY 


2.    TONNAGE  OF  AMERICAN  AND  FOREIGN  VESSELS  ENTERED  AND  CLEARED  IN 
THE  FOREIGN  TRADE  OF  THE  UNITED  STATES,  1860-1910 


Year 

American 

Per  Cent 

Foreign 

Per  Cent 

1860  

12,087,200 

7i 

4,077,016 

29 

i86<c    . 

<;,Q68,7CK 

47 

6,812,090 

53 

1870  

6,002,067 

^8 

II,332,OQ<C 

62 

1875.  . 

7,310,580 

3O 

16,278,728 

70 

1880  

6,8  34,  310 

IQ 

29,219,229 

81 

1885.  . 

6,  363,  1567 

21 

24,456,029 

79 

1890  

8,149,878 

2? 

28,106,245 

77 

i8os 

&,Q77,o<(7 

23 

30,068,404 

77 

1900 

I2,344,<;7O 

22 

44,000,^76 

78 

IQOC 

14,283,632 

2? 

47,857,126 

77 

IOIO.  . 

17.607.062 

22 

62,24.4,602 

78 

B.   American  Vessels  Engaged  in  Commerce,  1860-1914  L 

During  the  Civil  War  the  tonnage  of  American  vessels  engaged  in  foreign 
commerce  decreased  almost  40  per  cent,  that  engaged  in  coastwise  trade  (not 
including  the  Great  Lakes)  increased  more  than  20  per  cent,  while  the  tonnage 
engaged  in  lake  commerce  increased  approximately  50  per  cent.  Between  1865 
and  1911  the  tonnage  of  the  first  decreased  from  more  than  1,500,000  to  less  than 
1,000,000;  the  second  increased  from  2,800,000  to  about  3,500,000;  while  the 
third  increased  from  450,000  to  a  little  more  than  2,000,000.  The  most  significant 
fact,  therefore,  about  the  tonnage  of  American  vessels  has  been  the  absolute  decline 
in  that  engaged  in  foreign  trade  and  the  increase  of  that  along  the  coast  and  on  the 
Great  Lakes. 

AMERICAN  TONNAGE,  1860-1910 


Year 

Engaged  in  Foreign 
Trade  and 
Whale  Fisheries 

Engaged  in 
Coastwise  Trade  and 
Cod  and  Mackerel 
Fisheries  2 

Engagaged  in 
Commerce  of  the 
Great  Lakes 

i860  

2,^46  23  7 

2.330  8"?7 

4.67  774. 

1865.  . 

1,602,583 

2,820  502 

673  607 

1870  

1,516,800 

2,O4s  OO3 

684  7O4 

l87t; 

I  C?3  827 

837  801 

1880           .     . 

i  352  810 

2  IIO  122 

605   IO2 

188";. 

I  28?  008 

2  227  988 

74O  O4.8 

1890    . 

046  60  c 

2  414  73f> 

I  063  063 

1895.  . 

838  186 

2   C?6  31? 

I    241  AsO 

1900  

826,694 

2,772   ^S 

I    ?6s    ?87 

1905  

QS4.SI3 

3  43O  88? 

2  062  147 

1910  

701  82=; 

7    821     I  ?? 

2  895  IO2 

ICI4 

I  076  T  ?2 

1  Statistical  Abstract.     (See  Index,  Commerce,  etc.) 

2  Exclusive  of  the  commerce  of  the  Great  Lakes. 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  653 

C.  President  McKinley  on  the  Merchant  Marine,  1899  1 

Since  the  Civil  War  the  merchant  marine  of  the  United  States  has  been  on  a 
decline.  In  1860  about  two-thirds  of  the  commerce  of  this  country  was  carried 
in  American  vessels;  by  1910  it  had  declined  to  less  than  one-tenth.  In  1899  Presi- 
dent McKinley  called  attention  to  the  state  of  affairs  as  follows: 

The  value  of  an  American  merchant  marine  to  the  extension  of 
our  commercial  trade  and  the  strengthening  of  our  power  upon  the 
sea  invites  the  immediate  action  of  the  Congress.  Our  national 
development  will  be  one-sided  and  unsatisfactory  so  long  as  the 
remarkable  growth  of  our  inland  industries  remains  unaccompanied 
by  progress  on  the  seas.  There  is  no  lack  of  constitutional  authority 
for  legislation  which  shall  give  to  the  country  maritime  strength 
commensurate  with  its  industrial  achievements  and  with  its  rank 
among  the  nations  of  the  earth. 

The  past  year  has  recorded  exceptional  activity  in  our  shipyards, 
and  the  promises  of  continual  prosperity  in  shipbuilding  are  abun- 
dant. Advanced  legislation  for  the  protection  of  our  seamen  has 
been  enacted.  Our  coast  trade,  under  regulations  wisely  framed  at 
the  beginning  of  the  Government  and  since,  shows  results  for  the  past 
fiscal  year  unequaled  in  our  records  or  those  of  any  other  power. 
We  shall  fail  to  realize  our  opportunities,  however,  if  we  complacently 
regard  only  matters  at  home  and  blind  ourselves  to  the  necessity  of 
securing  our  share  in  the  valuable  carrying  trade  of  the  world. 

Last  year  American  vessels  transported  a  smaller  share  of  our 
exports  and  imports  than  during  any  former  year  in  all  our  history, 
and  the  measure  of  our  dependence  upon  foreign  shipping  was  pain- 
fully manifested  to  our  people.  Without  any  choice  of  our  own,  but 
from  necessity,  the  Departments  of  the  Government  charged  with 
military  and  naval  operations  in  the  East  and  West  Indies  had 
to  obtain  from  foreign  flags  merchant  vessels  essential  for  those 
operations. 

The  other  great  nations  have  not  hesitated  to  adopt  the  required 
means  to  develop  their  shipping  as  a  factor  in  national  defense  and  as 
one  of  the  surest  and  speediest  means  of  obtaining  for  their  producers 
a  share  in  foreign  markets.  Like  vigilance  and  effort  on  our  part 
cannot  fail  to  improve  our  situation,  which  is  regarded  with  humilia- 
tion at  home  and  with  surprise  abroad.  Even  the  seeming  sacrifices, 
which  at  the  beginning 'may  be  involved,  will  be  offset  later  by  more 
than  equivalent  gains. 

1  Messages  and  Papers  of  the  Presidents.  Edited  by  James  D.  Richardson 
([Washington],  1896-1903),  X,  134-5. 


654  READINGS  IN  ECONOMIC  HISTORY 

The  expense  is  as  nothing  compared  to  the  advantage  to  be 
achieved.  The  reestablishment  of  our  merchant  marine  involves 
in  a  large  measure  our  continued  industrial  progress  and  the  extension 
of  our  commercial  triumphs.  I  am  satisfied  the  judgment  of  the 
country  favors  the  policy  of  aid  to  our  merchant  marine,  which  will 
broaden  our  commerce  and  markets  and  upbuild  our  sea-carrying 
capacity  for  the  products  of  agriculture  and  manufacture;  which, 
with  the  increase  of  our  Navy,  mean  more  work  and  wages  to  our 
countrymen,  as  well  as  a  safeguard  to  American  interests  in  every 
part  of  the  world. 

D.   A  Plea  for  Ship  Subsidy,  IQOI  l 

President  Roosevelt,  in  his  first  message  to  Congress  (December  3,  1901), 
called  attention  to  the  state  of  the  merchant  marine  of  the  United  States  and 
suggested  that  the  government  take  some  action  whereby  this  branch  of  industry 
should  be  restored. 

The  condition  of  the  American  merchant  marine  is  such  as  to  call 
for  immediate  remedial  action  by  the  Congress.  It  is  discreditable 
to  us  as  a  Nation  that  our  merchant  marine  should  be  utterly  insig- 
nificant in  comparison  to  that  of  other  nations  which  we  overtop  in 
other  forms  of  business.  We  should  not  longer  submit  to  conditions 
under  which  only  a  trifling  portion  of  our  great  commerce  is  carried 
in  our  own  ships.  To  remedy  this  state  of  things  would  not  merely 
serve  to  build  up  our  shipping  interests,  but  it  would  also  result  in 
benefit  to  all  who  are  interested  in  the  permanent  establishment  of 
a  wider  market  for  American  products,  and  would  provide  an  auxiliary 
force  for  the  Navy.  Ships  work  for  their  own  countries  just  as  rail- 
roads work  for  their  terminal  points.  Shipping  lines,  if  established 
to  the  principal  countries  with  which  we  have  dealings,  would  be  of 
political  as  well  as  commercial  benefit.  From  every  standpoint  it  is 
unwise  for  the  United  States  to  continue  to  rely  upon  the  ships  of 
competing  nations  for  the  distribution  of  our  goods.  It  should  be 
made  advantageous  to  carry  American  goods  in  American-built  ships. 

At  present  American  shipping  is  under  certain  great  disadvantages 
when  put  in  competition  with  the  shipping  of  foreign  countries.  Many 
of  the  fast  foreign  steamships,  at  a  speed  of  fourteen  knots  or  above, 
are  subsidized;  and  all  our  ships,  sailing  vessels  and  steamers  alike, 
cargo  carriers  of  slow  speed  and  mail  carriers  of  high  speed,  have  to 
meet  the  fact  that  the  original  cost  of  building  American  ships  is  greater 

1  Messages  and  Papers  of  Ike  Presidents.  Edited  by  James  D.  Richardson 
(  [Washington],  1896-1903),  X,  429-30. 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  655 

than  is  the  case  abroad;  that  the  wages  paid  American  officers  and 
seamen  are  very  much  higher  than  those  paid  the  officers  and 
seamen  of  foreign  competing  countries;  and  that  the  standard  of 
living  on  our  ships  is  far  superior  to  the  standard  of  living  on  the  ships 
of  our  commercial  rivals. 

Our  Government  should  take  such  action  as  will  remedy  these 
inequalities.  The  American  merchant  marine  should  be  restored 
to  the  ocean. 

III.    COMMERCE  ON  THE  GREAT  LAKES, 

A.   Interlake  and  Local  Traffic,  IQOO  1 

An  interesting  account  of  the  lake  traffic  in  1899  is  found  in  the  Report  of 
the  Industrial  Commission.  The  following  extract  from  the  Report  deals  with 
the  principal  ports,  tonnage  and  seasons  of  navigation. 

The  traffic  from  one  lake  to  another  is  recorded  in  such  a  manner 
as  to  show  the  relation  between  Lake  Superior  and  the  other  lakes. 
It  thus  appears  that  the  greater  proportion  of  the  freight  moves  be- 
tween Lake  Superior  and  Lake  Erie;  86  per  cent  of  the  east-bound 
tonnage  passing  through  the  Sault  Ste.  Marie  canals  was  bound  for 
Lake  Erie  ports  in  1900,  and  nearly  96  per  cent  of  the  west-bound 
tonnage  originated  at  Lake  Erie  ports  and  was  destined  for  Lake 
Superior  ports. 

MOVEMENT  OF   EAST  AND   WEST   BOUND   FREIGHT 

East  Bound 

From  Lake  Superior  ports  to :  Net  tons 

Lake  Michigan  ports 2,054,819 

Lake  Huron  ports 659,405 

Lake  Erie  ports 17,604,773 

Lake  Ontario  ports ^ 213,496 


Total 20,532,493 

West  Bound 

To  Lake  Superior  from  lower  lake  ports:  Net  tons 

Lake  Michigan  ports 73,841 

Lake  Huron  ports 130,333 

Lake  Erie  ports 4,890,938 

Lake  Ontario  ports 15,468 


Total 5,110,580 


1  Fined   Report   of  the   Industrial   Commission  (Washington,   1902),  Volume 
XIX  of  the  Commission's  Report    468-70. 


656  READINGS  IN  ECONOMIC  HISTORY 

Local  traffic  on  the  Great  Lakes  is  comparatively  undeveloped, 
with  the  exception  of  the  traffic  on  Lake  Michigan  and  Lake  Erie. 
Nearly  the  whole  of  the  commerce  moved  is  carried  from  one  end  of 
the  system  to  the  other.  About  four-fifths  of  the  iron  ore  mined  in 
the  Lake  Superior  region  is  transported  to  Lake  Erie  ports,  and  nearly 
the  whole  of  the  remaining  fifth  is  taken  to  Milwaukee  and  Chicago. 
The  local  traffic  on  Lake  Michigan  consists  mainly  in  the  cross-lake 
traffic  of  the  railroads  having  termini  on  both  sides.  The  cars  are 
loaded  bodily  on  car  ferries  and  taken  across  from  one  side  to  the  other. 
Manitowoc,  Milwaukee,  Kewaunee,  Menominee,  Marinette,  and 
Gladstone  on  the  western  side,  and  Frankfort,  Ludington,  Muskegon, 
and  Ottawa  Beach  on  the  eastern  side,  enjoy  the  most  of  this  traffic. 
Lake  Michigan  is  the  only  lake  that  is  open  to  navigation  all  the  year. 

In  point  of  local  traffic  the  southern  shores  of  Lake  Erie  have  de- 
veloped package  freight  lines  between  themselves  and  Buffalo  at  the 
one  end  and  Detroit  at  the  other.  The  fastest  steamers  on  this  body 
of  water  connect  Cleveland  with  the  above  terminal  ports.  For  a 
long  time  lake  passenger  and  packet  lines  were  successfully  operated 
in  competition  with  railroads,  but  such  is  not  now  the  case.  Such 
traffic  is  chiefly  conducted  by  steamship  lines  in  intimate  relations 
with  or  under  the  control  of  the  railroad  lines.  These  are  really 
collectors  and  distributors  of  freight,  acting  as  an  extension  of  the  scope 
of  railroad  territory.  Most,  if  not  all,  of  the  trunk  lines  have  their 
lines  of  steamships  which  make  regular  connections  with  upper  lake 
ports  and  with  the  terminal  ports  on  the  lower  lake  shores. 

On  Lake  Michigan,  centering  at  Milwaukee  and  Chicago  and  points 
farther  north  on  both  coasts,  for  the  whole  year  round  local  traffic 
is  carried  on  in  connection  with  the  railroads.  Constant  communi- 
cation between  the  east  and  the  west  coasts  is  maintained  in  spite 
of  ice  by  steam-driven  car  floats,  constructed  so  as  to  break  their  way, 
even  in  the  coldest  weather. 

The  main  movements  of  traffic  occur  between  the  upper  lake 
ports  on  the  one  hand  and  the  lower  lake  ports,  south  of  the  St.  Clair 
River,  notably  Detroit,  Toledo,  Cleveland,  Ashtabula,  Conneaut, 
Erie,  and  Buffalo,  on  the  other.  .  .  . 

The  season  of  lake  navigation  is  about  eight  months  in  length. 
It  usually  opens  in  the  latter  part  of  April  and  closes  in  the  early  part 
or  about  the  middle  of  December.  Movements  from  the  upper 
lakes  are  dependent  on  the  opening  of  the  connecting  straits.  The 
Straits  of  Mackinac  are  usually  covered  with  ice  during  the  closed 
season  of  navigation  and  freight  movements  from  Chicago,  Mil- 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  657 

waukee,  and  other  Lake  Michigan  points  are  detained  until  the  pros- 
pect of  passing  the  straits  is  practically  assured  in  the  spring.  From 
Lake  Superior  points  southward  to  the  lower  lakes  the  season  of  navi- 
gation opens  and  closes  with  the  opening  and  closing  of  the  Sault 
Ste.  Marie  Canal. 

Nearly  all  the  commodities  handled  on  the  lakes  may  be  classed 
under  the  head  of  raw  materials.  The  chief  articles  of  traffic  from 
the  upper  lakes  eastward  are  flour  and  grain,  iron  ore,  and  lumber. 
Westward  the  traffic  is  primarily  coal,  salt,  and  general  merchandise. 
Owing  largely  to  the  small  number  of  articles  which  can  be  handled 
in  bulk  rapidly,  and  of  which  a  large  amount  enters  into  trade  at  a 
few  points,  the  traffic  operations  on  the  lakes  have  been  developed 
in  a  manner  found  in  no  other  part  of  the  world.  In  the  first  place, 
the  size  of  vessels  has  been  greatly  enlarged  in  order  to  carry  a  greater 
bulk  at  lower  cost  per  unit.  Secondly,  the  terminal  facilities  for  han- 
dling these  leading  articles  have  all  been  enlarged  and  improved  by 
mechanical  equipments,  making  it  possible  to  load  and  unload  rapidly 
and  therefore  to  increase  the  number  of  trips  which  a  vessel  may  make 
between  ports  in  a  season.  To  these  causes  more  than  any  other 
is  to  be  attributed  the  rapid  development  of  the  shipping  on  the  lakes 
and  the  traffic  movements  that  have  called  the  tonnage  into  existence. 

B.    Recent  Development,  iftgo-igog  1 

The  development  of  the  lake  traffic  since  1860  has  been  due  primarily  to  the 
large  eastbound  shipments  of  ore  and  grain.  To  what  extent  this  traffic  has 
grown  is  shown  by  the  following  report : 

The  principal  characteristics  of  Lake  commerce  are  the  prepon- 
derance of  eastbound  over  westbound  shipments  and  the  fact  that 
the  traffic  is  mainly  in  a  few  commodities  —  iron  ore,  grain,  coal,  and 
lumber.  There  is  a  considerable  movement  of  miscellaneous  and 
package  freight,  both  local  and  through,  but  it  is  small  compared  with 
the  enormous  bulk-freight  traffic  in  the  crude  products  of  contiguous 
mines,  forests,  and  grain  fields. 

Through  traffic  constitutes  the  greater  part  of  the  total  freight 
movement.  The  main  course  of  this  lies  between  the  western  ex- 
tremity of  Lake  Superior  and  the  southern  shore  of  Lake  Erie. 

The  Lake  traffic  was  not  reported  as  a  whole  prior  to  1889,  when, 
according  to  the  Census,  the  domestic  traffic  amounted  to  25,266,974 
net  tons.  The  domestic  traffic  amounted  to  45,000,000  tons  in  1901, 

1  Report  of  the  National  Conservation  Commission  (Washington,  1909),  II, 
37-9- 


658  READINGS  IN  ECONOMIC  HISTORY 

and  in  1907  to  more  than  80,000,000  (shipments  83,507,000  and 
receipts  81,124,000  net  tons). 

Iron  ore  and  coal  form  by  far  the  greater  part  of  the  Lake 
traffic,  and  furnish  together  98  per  cent  of  the  total  increase  from 
1905  to  1907.  The  movement  of  lumber  during  these  years  has 
declined  in  importance;  other  traffic,  outside  of  ore  and  coal,  has 
remained  about  stationary. 

Since  1890  with  the  development  of  the  Lake  Superior  mines, 
the  United  States  has  taken  first  rank  among  the  world's  iron  pro- 
ducers. Of  the  total  domestic  production  of  iron  ore,  approximately 
80  per  cent  was  transported  by  way  of  the  Great  Lakes  (41,000,000 
net  tons  in  1906  and  45,500,000  net  tons  in  1907),  constituting  in  some 
years  more  than  half  of  the  total  domestic  Lake  traffic. 

Next  in  volume  to  iron  ore,  and  first  in  the  westbound  Lake 
traffic,  is  the  westbound  movement  of  coal.  This  was  over  21,000,000 
tons  in  1907,  representing  about  a  fourth  of  the  domestic  Lake  traffic. 

In  the  movement  of  flour  and  grain  (eastbound)  there  is  active 
competition  between  the  Lake  and  all-rail  routes,  and  with  the  de- 
cline in  export  trade  the  domestic  movement  on  the  Lakes  has 
remained  practically  stationary  in  recent  years,  at  about  150,000,000 
bushels  of  grain  and  1,300,000  tons  of  flour.  There  has  been  an  in- 
crease of  traffic  from  American  ports  to  Canada  and  also  between 
Canadian  ports. 

The  traffic  in  logs  and  lumber  is  decreasing  in  volume  and  still 
more  in  relative  importance.  Nevertheless,  it  still  constitutes  one  of 
the  leading  items. 

Some  of  the  less  important  forms  of  traffic  are  the  movement  of 
copper,  salt,  pig  iron,  and  package  and  miscellaneous  freight.  About 
100,000  tons  of  copper  ore  are  annually  shipped,  mainly  from  the 
copper  district  in  the  Upper  Peninsula  of  Michigan.  Salt  is  shipped 
by  Lake  in  considerable  quantities  from  Manistee  and  Ludington, 
Mich.,  and  in  smaller  quantities  from  Buffalo  and  other  points.  Pig 
iron  moves  in  small  lots  between  a  considerable  number  of  ports. 
Package  and  miscellaneous  freight  forms  about  a  tenth  of  the  total 
traffic. 

Lake  Superior  shows  the  largest  volume  of  shipments  of  any  of 
the  Great  Lakes,  domestic  shipments  aggregating  over  40,000,000 
tons  in  1906.  About  65  per  cent  of  the  total  traffic  of  the  Lakes 
passes  in  or  out  of  Lake  Superior  through  St.  Marys  Falls  canals. 
Lake  Erie  has  the  largest  receipts  (43,600,000  tons  in  1906  and  47,000,- 
ooo  in  1907  in  the  domestic  traffic),  is  second  in  volume  of  shipments 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  659 

(18,450,000  tons  in  1906),  and  has  the  largest  proportion  of  the  total 
traffic.  Lake  Michigan  ranks  third,  but  has  the  largest  amount  of 
local  traffic. 

Notwithstanding  the  large  number  of  Lake  ports,  about  a  dozen 
ship  and  receive  80  per  cent  of  the  water-borne  traffic.  Duluth- 
Superior  is  the  most  important  port  for  shipments  and  has  the  largest 
water-borne  traffic  of  any  of  the  Lake  ports,  aggregating  over  29,000,- 
ooo  tons  in  1906,  mainly  ore,  grain,  and  coal.  Chicago  and  Milwaukee 
are  among  the  leading  ports,  both  for  shipments  and  receipts.  The 
Lake  commerce  of  Chicago  amounts  to  about  10,000,000  tons  annually, 
and  that  of  Milwaukee  to  6,000,000  tons.  Buffalo  and  Cleveland 
are  also  ports  of  first  importance,  both  in  the  volume  and  in  the  variety 
of  their  commerce,  and  Buffalo  has  the  largest  receipts  of  any  of  the 
Lake  ports.  The  Lake  commerce  of  Buffalo  for  1006  exceeded 
15,500,000  tons  (domestic  traffic  14,345,000  tons),  and,  including 
canal  traffic,  the  total  water-borne  commerce  of  Buffalo  was  over 
17,320,000  tons.  The  Lake  commerce  of  Cleveland  for  1906  was 
12,247,000  tons  (domestic  traffic  11,670,000  tons).  Other  important 
but  more  specialized  ports  include  Two  Harbors,  Ashland,  and  Mar- 
quette,  on  Lake  Superior,  and  Escanaba,  on  Lake  Michigan,  for  ship- 
ments of  ore;  Toledo,  Ashtabula,  Lorain,  Conneaut,  and  Erie,  on 
Lake  Erie,  for  receipts  of  ore  and  shipments  of  coal,  and  Tonawanda 
for  receipts  of  lumber. 

IV.  RAIL  AND  RIVER  TRAFFIC 

A.   Growth  of  Railroad  Systems  to  1900  * 

The  most  important  railroad  development  during  the  past  generation  has  been 
in  the  direction  of  consolidation.  Before  the  Civil  War  American  railroads  were 
short  and  disconnected,  and  continued  to  be  so  until  as  late  as  1880.  This  was 
the  period  of  railroad  extension.  Many  miles  were  laid  down  by  numerous  inde- 
pendent builders,  with  little  regard  for  those  lines  already  built.  The  next  stage 
was  one  of  consolidation,  in  which  the  guiding  hand  was  that  of  the  capitalist  and 
not  that  of  the  builder  or  promoter.  The  extent  of  this  consolidation  down  to  the 
year  1900  is  given  by  the  Industrial  Commission  as  follows: 

FIRST  PERIOD  —  TO    1870 

The  development  of  American  railroad  systems  down  to  1898,  as 
judged  by  magnitude  alone,  may  be  roughly  divided  into  three  periods. 
In  the  first  —  that  is,  down  to  1870  —  a  few  hundred  miles  in  length 

1  Final  Report  of  the  Industrial  Commission  (Washington,  1902),  Volume  XIX 
of  the  Commission's  Report,  304-6. 


66o  READINGS  IN  ECONOMIC  HISTORY 

constituted  the  maximum  for  efficient  operations.  The  Illinois 
Central,  with  700  miles  of  line,  was  long  considered  one  of  the  greatest 
railroads  in  the  world.  Until  after  the  civil  war  there  was  only  one 
road  with  a  length  aggregating  more  than  1,000  miles.  This  growth 
began  early  in  the  fifties,  at  which  time  the  Pennsylvania  system  first 
surpassed  500  miles  in  length,  and  in  1853  to  1858,  when  the  New  York 
Central  nucleus  was  formed  by  the  consolidation  of  some  sixteen 
independent  corporations.  In  the  territory  west  of  Chicago  the 
Chicago  and  Northwestern  road  operated  but  119  miles  in  1859,  a 
figure  which  rose  to  upward  of  500  in  1866.  The  inconvenience,  both 
for  freight  and  passenger  traffic,  incident  to  these  small  systems  is 
of  course  obvious.  It  is  stated  that,  for  instance,  a  journey  from 
New  York  to  the  Mississippi  in  the  fifties  involved  not  less  than 
seven  bodily  transfers  from  one  car  to  another. 

SECOND  PERIOD  —  1870-1890 

The  second  period  in  the  growth  of  consolidation  extended  to 
about  1890,  at  which  time  5,000  miles  represented  about  the  maximum 
length  of  a  single  railroad  in  the  United  States.  The  Pennsylvania 
road  had  grown  to  about  4,000  miles  in  length  by  1880.  The  absorp- 
tion of  the  Nickel  Plate  road  by  the  Lake  Shore  and  Michigan  South- 
ern in  1882,  followed  by  absorption  of  the  West  Shore  road  by  the 
New  York  Central  in  1885,  very  considerably  increased  the  length  of 
systems  under  common  control.  In  the  West  the  Chicago  and  North- 
western road  had  growrn  by  1886  to  about  3,500  miles,  to  which  was 
added  some  1,500  miles  by  the  control  of  the  Chicago,  St.  Paul,  Minne- 
apolis and  Omaha,  and  the  Fremont  and  Elkhorn  roads.  By  1889 
the  Union  Pacific  road  owned  2,000  miles  of  line,  but  controlled  nearly 
4,000  more.  It  is  difficult  to  determine  wrhether  the  enactment  of 
the  act  to  regulate  commerce  produced  any  effect  upon  this  growth 
of  large  systems.  Upon  the  one  hand  it  appears,  from  investigation 
by  the  Interstate  Commerce  Commission  itself,  that  consolidation 
was  rather  lessened  after  1887  as  compared  with  preceding  years. 
Thus,  from  their  data  it  appears  that  an  average  of  twenty-seven 
companies  per  year  were  consolidated  in  1886,  1887,  and  1888,  as 
compared  with  eighty-six  companies  annually  consolidated  in  1880, 
1881,  and  1882.  On  the  other  hand,  judged  by  mileage,  1880  wit- 
nessed a  consolidation  of  about  4,000  miles,  followed  in  1889  by 
6,600  miles,  and  in  1890  by  about  3,000  miles  of  line.  It  does  not 
appear  from  this  evidence  that  any  specific  influence  was  immedi- 
ately traceable.  Judgment  should  be  based  upon  a  considerable  term 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  661 

of  years,  in  order  to  eliminate  the  direct  effect  of  prosperity  or  de- 
pression in  any  case. 

THIRD   PERIOD  —  1890-1898 

The  decade  after  1890  for  the  first  time  witnessed  the  growth 
of  systems  aggregating  as  high  as  10,000  miles  under  single  control. 
The  Pennsylvania  road  rapidly  increased  its  mileage  to  upward  of 
7,000,  for  example.  The  interchange  of  business  at  Chicago  between 
trunk  lines  and  the  Western  system  had  already  begun  to  foreshadow 
alliances  covering  both  territories.  Typical  of  these  were  the  close 
working  agreements  between  the  Vanderbilt  system  and  the  Chicago 
and  Northwestern  and  the  Union  Pacific  in  the  Far  West.  The 
growth  in  size  of  the  roads,  for  purposes  of  operation  at  least,  although 
not  all  of  them  were  necessarily  consolidated,  is  shown  by  the  following 
statement:  In  1867,  one  road  alone  exceeded  1,000  miles,  constituting 
about  7  per  cent  of  the  total  mileage  of  the  country.  Ten  years  later, 
in  1877,  ii  roads  exceeded  this  figure,  constituting  20  per  cent  of  the 
mileage.  In  1887,  28  companies,  with  44  per  cent  of  the  mileage  of 
the  United  States,  were  over  1,000  miles  in  length;  and  in  1896,  44 
companies,  or  56.9  per  cent  of  the  mileage,  exceeded  this  size.  In 
1900  over  60  per  cent  of  the  mileage  of  the  United  States  was  included 
in  systems  larger  than  1,000  miles.  This  statement  illustrates  the 
rapid  development  which  took  place  after  1800.  A  comparison  of 
1880  with  1000  shows  that  in  the  former  year  there  were  2,085  railroad 
companies  in  existence,  either  operated  independently  or  under  lease, 
aggregating  93,000  miles  in  length.  In  June,  1900,  the  mileage  had 
more  than  doubled,  with  a  total  number  of  2,023  corporations;  but 
of  these  only  847  were  independently  operated,  the  rest  being  either 
leased  or  subsidiary. 

It  is  significant  as  bearing  upon  the  growth  of  railroad  systems 
that  the  period  of  depression  of  1893-1897  retarded  for  some  years 
the  progress  of  its  development.  More  than  this,  several  important 
systems  were  dismembered  as  a  result  of  the  reorganizations  effected 
during  that  period.  Thus,  for  instance,  the  Atchison  road  lost  the 
St.  Louis  and  San  Francisco;  and  the  Union  Pacific  system  lost  the 
Oregon  Short  Line.  In  fact,  the  latter  road  was  entirely  dismembered. 
The  Erie  Railroad  alone,  among  the  important  ones  which  were  sub- 
ject to  reorganization,  was  able  to  resist  the  disrupting  tendency  of 
financial  readjustments.  The  low-water  mark  in  consolidation  oc- 
curred in  1898,  when  only  174  miles  were  actually  consolidated,  though 
others  were  merged  or  leased.  The  entire  reorganization  of  such 


662  READINGS  IN  ECONOMIC  HISTORY 

roads  as  the  Richmond  and  West  Point  Terminal  opened  the  way 
to  the  formation  of  newer  and  more  important  systems,  such  as  the' 
Southern  Railway,  in  the  subsequent  years.  This  latter  has,  for  ex- 
ample, at  the  present  time  absorbed  almost  forty  minor  corporations 
in  a  system  aggregating  between  6,000  and  7,000  miles. 


THE  CONSOLIDATIONS   OF    1898   TO 

General  Description 

Since  the  return  of  prosperity  in  1898,  railroad  consolidation  upon 
a  scale  hitherto  unequalled  has  been  under  way.  The  earlier  systems, 
which  during  the  nineties  rose  to  a  maximum  of  10,000  miles  of  line, 
have  now  been  superseded  by  the  organization  of  systems  under  com- 
mon control  which  include  from  15,000  to  20,000  miles  apiece.  The 
extent  of  this  movement  may  be  judged  from  the  statement  of  the 
Interstate  Commerce  Commission  that  "  disregarding  mere  rumors 
and  taking  account  of  well  authenticated  statements,  there  were 
absorbed  in  various  ways  between  July  i,  1899,  and  November  i, 
looo,  25,311  miles  of  railroad.  There  are  in  the  whole  United  States 
something  less  than  200,000  miles  of  road;  more  than  one-eighth  of 
this  entire  mileage  was,  .within  the  above  period,  brought  in  one  way 
and  another  under  the  control  of  other  lines."  Since  the  ist  of  Novem- 
ber, 1900,  this  rate  of  consolidation  has  been  still  further  exceeded, 
while  at  the  same  time  the  character  of  the  changes  has  become  notice- 
ably different.  Forces  are  apparently  at  work  which  may  within 
the  immediate  future  bring  the  railroad  system  of  the  United  States 
under  the  control  of  comparatively  few  dominating  financial  interests. 
It  is  highly  important  that  the  character  of  this  change  should  be 
thoroughly  understood,  inasmuch  as  it  involved  not  alone  the  con- 
solidation of  hitherto  independent  railroads,  but  the  amalgamation 
of  entire  systems. 

B.   Freight  Rates,  1870-1900  1 

In  1900  the  average  charge  by  the  railroads  for  hauling  a  ton  of  freight  one 
mile  was  less  than  one  cent.  There  were,  however,  considerable  differences  in 
freight  rates.  Some  localities  had  cheaper  rates  than  other  localities.  Bulky 
articles  like  coal  paid  less  freight  proportionally  than  such  articles  as  groceries, 
provisions,  etc.  There  were  other  differences  of  a  like  nature. 

It  is  incontrovertible,  as  shown  by  many  witnesses  before  the 
Industrial  Commission,  and  by  other  authority,  that  freight  rates 

1  Final  Report  of  th-  Industrial  Commission  (Washington,  1902),  Volume 
XIX  of  the  Commission's  Report,  274-6;  278-81. 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  663  • 

have  declined  very  greatly  throughout  the  United  States  since  the 
close  of  the  civil  war.  On  the  other  hand,  it  does  not  appear  that 
any  such  corresponding  reduction  in  passenger  rates  either  in  amount 
or  extent  has  taken  place  in  the  same  period.  In  respect  to  freight 
rates  this  may  be  shown  in  either  one  of  two  ways,  either  by  compari- 
son of  the  actual  rates  charged  for  specified  service  between  given 
points  throughout  a  series  of  years,  or,  secondly,  by  means  of  what 
is  called  the  revenue  per  ton  per  mile.  The  latter  is  more  commonly 
used  as  a  basis  for  comparison  and  has  many  advantages.  The 
revenue  per  ton  per  mile  for  a  given  road,  or  for  the  railroad  sys- 
tems of  the  United  States,  is  computed  by  dividing  the  total  freight 
revenue  for  that  service,  whatever  it  may  be,  by  the  number  repre- 
senting the  amount  of  freight  in  tons  hauled  one  mile.  Thus,  for 
example,  if  the  total  freight  revenue  of  a  system  of  roads  be  $900,000,- 
ooo,  this  having  been  received  as  compensation  for  hauling  an  equiv- 
alent of  90,000  million  tons  of  freight  one  mile,  the  compensation 
actually  received  for  each  ton  hauled  one  mile,  is  obviously  one 
cent.  All  that  is  necessary  in  order  to  compute  the  average  revenue 
per  ton-mile  then  is  to  know  the  total  freight  revenue  and  the  amount 
of  ton-mileage  service.  Computed  in  this  way  the  average  revenue  per 
ton  per  mile  for  the  railroads  of  the  United  States  in  1000  was  0.729 
cent.  For  1890  this  average  revenue  per  ton-mile  —  that  is  to  say, 
the  average  amount  received  for  each  ton  of  freight  hauled  one  mile  — 
was  0.941  cent.  For  1880  it  was  1.232  cents,  and  for  1870  1.889 
cents.  .  .  . 

This  mode  of  comparison  by  means  of  the  revenue  per  ton-mile 
has,  as  will  be  observed,  one  great  advantage.  It  measures  the  actual 
return  received  by  the  railroads  without  regard  to  the  published  tariff, 
measuring  accurately,  therefore,  the  degree  to  which  such  departures 
from  such  published  rates  took  place.  On  the  other  hand,  the  aver- 
age revenue  per  ton-mile  is  open  to  all  the  objections  of  a  statistical 
average.  It  does  not  represent,  either  for  any  railroad  by  itself  or 
for  a  system  of  railroads,  the  actual  payment  made  for  any  given 
service.  It  covers  ah1  kinds  of  traffic,  both  through  and  local,  as 
well  as  of  high  and  low  grade;  that  is  to  say,  it  makes  no  distinction 
between  service  rendered  in  the  transportation  of  dry  goods  between 
local  stations  and  of  coal  or  grain  hauled  for  long  distances.  Obvi- 
ously, therefore,  it  will  vary  from  year  to  year,  or  as  between  different 
roads,  according  to  the  proportions  of  traffic  of  different  kinds  which 
may  happen  to  prevail  at  that  time.  Even  on  a  given  road  the 
revenue  per  ton-mile  varies  widely  as  between  different  classes  of 


664  READINGS  IN  ECONOMIC  HISTORY 

commodities.  Thus  on  the  Illinois  Central  Railroad  for  the  fiscal 
year  1900  the  revenue  per  ton-mile  was  0.136  cent  on  wheat,  0.790 
cent  on  flour,  4.267  cents  on  sugar  cane,  0.309  cent  on  soft  coal,  1.148 
cents  on  stone  and  sand,  2.238  cents  on  furniture,  3.165  cents  on 
merchandise.  The  average  of  all  commodities  carried  on  this  road 
being  0.935  cent,  the  latter  figure,  compounded  of  such  various  ingre- 
dients, really  represents  the  return  for  no  one  of  any  of  the  services 
performed.  The  same  objection  to  comparisons  of  revenue  per  ton- 
mile  holds  good  as  between  different  roads.  Thus,  for  example,  the 
revenue  per  ton-mile  on  a  road  whose  traffic  is  largely  of  low  grade 
will  be  necessarily  low.  On  the  Baltimore  and  Ohio,  for  instance, 
for  1899  it  averaged  0.39  cent  for  all  the  traffic  that  road  carried. 
This  is  the  lowest  average  reported  by  any  large  railroad  system  in 
the  United  States  for  that  year,  except  the  Chesapeake  and  Ohio, 
on  which  the  average  ton-mile  revenue  was  0.362  cent.  The  reason 
for  this  is  obviously  because  the  bulk  of  the  tonnage  on  these  roads 
consists  of  soft  coal,  grain,  brick,  sand,  and  other  commodities  on  which 
the  freight  charges  must  necessarily  be  exceedingly  low  in  order  that 
the  freight  shall  move  at  all.  To  compare  this  revenue  per  ton  per 
mile  with  a  similar  figure  for  a  high  grade  road,  such  as  the  New  York, 
New  Haven  and  Hartford,  which  in  1899  reports  a  revenue  per  ton  per 
mile  of  1.411  cents,  is  obviously  misleading  and  fallacious.  It  does 
not  mean  that  the  latter  road  necessarily  charged  more  for  the  same 
service  than  the  Chesapeake  and  Ohio.  Its  higher  revenue  per  ton 
of  freight  moved  one  mile  is  due  in  large  measure  to  the  fact  that 
much  of  its  tonnage  is  of  high-class  merchandise. 

The  proportion  of  local  to  through  business  upon  a  railroad  or 
for  a  system  of  roads  is  also  an  important  consideration  in  determin- 
ing the  average  revenue  per  ton-mile.  Obviously  it  costs  much  more 
to  handle  local  business,  the  terminal  expenses  being  far  greater  in 
proportion,  while  at  the  same  time  a  larger  proportion  of  the  freight 
moves  in  small  lots  at  less  than  carload  rates.  As  illustrative  of  the 
difference  in  revenue  to  the  railroads,  the  Illinois  Central  Railroad  in 
1900  reports  an  average  revenue  per  ton-mile  on  through  freight  of 
0.48  cent,  while  for  local  freight  the  corresponding  figure  is  1.17  cents, 
the  average  of  both  being  0.56  cent.  Similarly,  upon  the  Lake  Shore 
and  Michigan  Southern,  the  revenue  per  ton  mile  for  through  and 
local  business  is,  respectively,  0.417  cent  and  0.562  cent,  giving  an 
average  of  0.49  cent.  It  is  apparent  from  this  that  any  accurate 
determination  of  the  rate  of  charge  in  general  must  take  account  of 
such  facts  as  these.  The  Southern  Pacific  or  the  Chesapeake  and 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  665 

Ohio  railroads,  with  very  little  local  traffic  and  a  business  dependent 
for  prosperity  almost  entirely  upon  the  long  haul,  will  conduct  trans- 
portation at  a  materially  different  figure  from  roads  in  densely  settled 
territory.  This  factor,  probably,  determines  to  some  degree  the 
difference  in  average  rates  per  ton  mile  for  different  sections  of  the 
United  States,  and  certainly  it  appears  in  any  comparisons  with 
European  countries.  For  New  England  in  1899  the  average  revenue 
per  ton  mile  was  1.14  cents;  for  the  Middle  States,  0.57  cent;  for  the 
Central  and  Northern  States,  0.8  cent;  the  Southern  Atlantic,  0.68 
cent;  Gulf  and  Mississippi,  0.80  cent;  Southwestern,  1.02  cents; 
Northwestern,  0.98  cent,  and  Pacific  roads,  1.03  cents. 

The  considerations  above  mentioned  are  of  the  utmost  importance 
in  any  comparison  of  freight  rates,  either  at  different  periods  or  as 
between  different  countries.  Without  knowing  the  proportions  of 
local  and  through  business,  and  especially  the  proportion  of  high  and 
low  grade  freight  moved  long  distances,  no  validity  whatever  attaches 
to  comparisons  of  average  revenue  per  ton  mile.  The  development 
of  the  last  twenty  years  in  the  United  States  has  been  in  favor  of  a 
great  increase  in  low-grade  traffic.  .  .  . 

The  assertion  is  frequently  made  that,  while  there  has  been  un- 
doubtedly a  progressive  decrease  in  freight  rates  in  the  United  States 
during  the  last  thirty  years,  these  decreases  have  been  very  unequally 
distributed.  In  other  words,  it  has  been  maintained  that  the  de- 
creased rates  have  been  entirely  abnormal  upon  the  through  business 
from  interior  centres,  such  as  the  movement  of  grain  or  other  food 
supplies  from  Chicago  to  the  seaboard;  but  that,  on  the  other  hand, 
local  rates  have  decreased  very  little,  if  at  all,  in  the  same  period. 
Coupled  with  this  is  the  allegation  that  while  through  freight  rates 
in  the  United  States  are  lower  than  in  foreign  countries,  local  rates  for 
short  distances  are,  as  a  matter  of  fact,  considerably  above  those  pre- 
vailing in  Europe.  This  allegation  if  true  is  of  profound  significance, 
owing  to  the  fact  that  the  larger  proportion  of  freight  business  through- 
out the  country  is  of  a  local  character.  Thus,  for  instance,  the  annual 
report  for  1899  of  the  New  York  Central  indicates  about  4,000,000 
tons  of  through  freight  in  both  directions  as  against  five  times  that 
volume  of  way  freight  in  both  directions.  On  the  Pennsylvania  road 
it  appears  that  the  proportion  of  local  freight  was  even  higher,  rising 
to  90  per  cent  in  1890.  On  the  Illinois  Central  for  1900  local  freight 
outweighs  through  freight  in  the  proportion  of  5  to  i,  some  84  per 
cent  of  the  freight  carried  being  of  a  local  character.  On  the  other 
hand  on  some  roads  —  such  as  the  Chesapeake  and  Ohio,  for  instance 


666  READINGS  IN  ECONOMIC  HISTORY 

—  the  opposite  extreme  is  found,  competitive  freight  constituting 
about  four-fifths  of  the  total.  It  is  certain  that  the  definition  of  local 
as  distinct  from  through  freight  differs  upon  various  systems.  On 
the  other  hand,  while  the  volume  is  greater,  actual  earnings  on 
through  business  vastly  preponderate.  Fewer  tons  are  moved,  but 
the  distances  are  so  much  greater  that  the  total  -charge  on  each  ton 
aggregates  a  larger  amount.  Thus  on  the  New  York  Central  road 
through  freight  earning  outweighed  the  way  business  from  a  revenue 
point  of  view  three  times  over.  Through  ton  mileage  aggregated 
nearly  eight  times  that  of  local  traffic,  although  at  a  ton-mile  revenue 
of  considerably  less  than  half.  The  only  point  to  be  established  here 
is  that  local  freight  rates  are  of  great  importance,  both  to  the  public 
from  the  point  of  view  of  rates  and  to  the  railroads  from  the  point 
of  view  of  revenue. 

The  trend  of  testimony  appears  to  be  that  such  local  rates  have 
decreased  very  unevenly  in  different  parts  of  the  country.  Appar- 
ently one  of  the  first  and  most  beneficent  results  of  the  enactment 
of  the  act  to  regulate  commerce,  in  1887,  was  a  reduction  of  local 
rates  in  various  parts  of  the  country,  in  order  to  bring  the  rate  adjust- 
ment into  conformity  with  the  long  and  short  haul  clause.  This 
was  peculiarly  the  case  in  the  Northeastern  or  trunk-line  territory. 
It  does  not  seem  to  have  occurred  in  the  Southern  States,  where  the 
long  and  short  haul  principle  has  never  been  accepted  in  its  entirety. 
The  most  comprehensive  report  upon  the  subject  concludes  that 
local  rates  have  in  various  parts  of  the  country,  during  the  last  ten 
or  fifteen  years,  been  reduced  from  10  to  50  per  cent.  Returns  from 
various  State  railroad  commissions  interrogated  by  the  Industrial 
Commission  upon  the  subject  show  highly  variable  results.  From 
Mississippi  it  appears  that  "local  freight  rates  in  this  State  have  been 
materially  lowered  in  the  last  four  years,  especially  in  the  lettered 
classes,"  while  from  the  adjoining  State  of  Alabama  it  appears  that 
"local  rates  on  freight  have  decreased  very  little  in  the  last  five  or 
six  years,  and  have  not  decreased  in  proportion  to  the  decrease  made 
in  interstate  rates."  In  New  England  comparison  of  actual  freight 
rates  does  not  indicate  any  very  considerable  reduction,  the  absence 
of  competition  in  this  section  being,  perhaps,  in  part  responsible 
for  this  result.  A  comparison  of  published  freight  rates  in  Southern 
territory,  without  making  allowance  for  departures  from  such  tariffs, 
apparently  shows  a  very  much  smaller  reduction  than  in  other  parts 
of  the  country.  It  is  also  apparently  true  that  the  reduction  of  cotton 
rates  in  this  section,  while  considerable,  has  been  much  less  rapid 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  667 

than  that  of  the  rates  upon  grain  from  Chicago  to  the  seaboard  in 
either  direction.  .  .  . 

Summarizing,  we  may  conclude  that  during  the  period  from 
1870  to  1900,  on  the  whole,  a  substantial  and  very  widespread  reduc- 
tion of  freight  rates  has  taken  place.  This,  as  might  be  expected, 
has  been  far  less  marked  in  local  than  in  through  or  competitive  busi- 
ness. This  steady  downward  movement  of  freight  rates  has  appar- 
ently been  interrupted  but  once  by  any  attempt  at  a  general  advance 
of  rates.  The  railroads  of  the  country  in  1894  evinced  a  concerted 
disposition  to  increase  freight  rates,  apparently  to  compensate  for  the 
depressed  condition  of  the  industry  as  a  whole.  The  times,  however, 
did  not  warrant  such  action  and  it  apparently  did  not  operate  to  pre- 
vent the  continued  fall  in  the  average  revenue  per  ton-mile.  It  re- 
mained for  the  prosperous  times  of  1900  and  1901  to  invite  once  more 
such  action  on  their  part,  and  a  notable  increase  in  freight  rates  all 
along  the  line  has  followed  as  a  result. 

C.   Decline  of  the  Mississippi  River  Trade  after  1860  1 

Traffic  on  the  Mississippi  River  and  its  tributaries  has,  for  various  reasons, 
declined  since  the  Civil  War.  At  an  earlier  day  this  traffic  was  of  supreme  impor- 
tance to  the  inhabitants  of  the  western  states,  but  with  the  development  of  lake 
commerce  and  the  building  of  railroads  from  the  Mississippi  valley  to  the  Atlantic 
seaboard  it  suffered  a  decline,  until  at  the  present  time  its  importance  is  slight. 

It  is  difficult  to  summarize  statistically  the  present  traffic  condi- 
tion of  the  Mississippi  River  system.  The  reports  of  the  corps  of 
United  States  Engineers  cover  specific  sections  of  the  river,  and  are 
published  as  made,  with  no  attempt  to  unify  them  and  eliminate 
duplications.  The  Census  Report  on  Transportation  by  Water  in 
1906  excluded  all  logs  and  lumber  in  rafts,  and  confined  its  statistics 
to  the  traffic  transported  by  some  form  of  vessel.  Inasmuch  as  raft- 
ing has  always  been  one  of  the  chief  sources  of  reliance  for  interior 
river  commerce,  this  leaves  the  total  figures  incomplete  at  a  vital 
point.  The  total  receipts  and  shipments  on  the  entire  system  for 
vessels  of  over  5  tons,  including  harbor  traffic  and  car  ferries,  amounted 
in  1906  to  31,626,981  net  tons.  To  this  should  be  added,  according 
to  the  report  of  Bureau  of  Corporations,  at  least  6,000,000  tons  of 
logs  and  rafts.  Of  the  total  freight  movement,  exclusive  of  harbor 
traffic  and  car  ferries,  amounting  to  19,531,093  tons,  more  than  56 
per  cent  was  coal,  and  20  per  cent  stone  and  sand.  This  was  an 

1  A  Traffic  History  of  the  Mississippi  River  System.  By  Frank  Haigh  Dixon 
(Washington,  1909),  Doc.  n  of  the  National  Waterways  Commission,  64-70. 


668  READINGS  IN  ECONOMIC  HISTORY 

increase  in  coal  traffic  since  1889  of  29.4  per  cent,  and  in  stone  and 
sand  of  1,147  Per  cent.  Lumber  and  logs  in  rafts  not  being  included, 
it  is  impossible  to  determine  exactly  their  movements  during  these 
fifteen  years,  but  the  decline  has  probably  been  fully  25  per  cent. 
The  movement  of  grain,  cotton,  and  iron  ore  has  fallen  to  insignificant 
amounts. 

A  characteristic  feature  of  river  transportation,  which  has  been 
growing  steadily  more  pronounced  since  1865,  is  the  predominance 
of  the  unrigged  craft  over  the  packet  steamboat.  In  1906,  out  of  a 
total  of  9,622  vessels  on  the  river  system,  8,187,  or  85  per  cent,  were 
unrigged,  and  of  the  steam  vessels  only  390  were  employed  for  the 
carrying  of  freight  and  passengers  in  regular  river  service.  The  re- 
mainder were  tugs  and  towing  vessels,  ferryboats  and  yachts.  By 
these  unrigged  craft  most  of  the  traffic  was  transported,  the  largest 
part  of  the  commerce  being  in  Ohio  River  coal.  Out  of  a  total  of 
19,531,093  tons  carried,  13,980,368  tons,  or  71  per  cent,  were  trans- 
ported on  the  Ohio  in  barges  and  flats.  Aside  from  bulk  traffic  in 
barges,  flats,  and  rafts,  the  business  on  the  river  is  almost  wholly 
local  and  for  short  distances. 

This  decline  has  been  the  subject  of  much  comment,  particu- 
larly by  those  who  have  observed  the  extended  use  to  which 
waterways  have  been  put  in  many  of  the  European  countries. 
Yet  the  causes  are  not  far  to  seek.  It  should  be  remarked, 
however,  that  they  are  so  interwoven  one  with  the  other  that 
it  will  be  somewhat  difficult  to  discuss  them  separately  without 
apparent  exaggeration  of  the  importance  of  the  particular  cause  as 
it  is  considered. 

The  first  cause  which  suggests  itself  is  that  of  the  influence  of 
competitive  agencies,  beginning  with  the  eastward  movement  by  lake 
and  canal  early  in  the  thirties,  and  followed  by  the  rail  movement 
in  the  next  two  decades.  This  latter  agency  was  undoubtedly  more 
efficient  from  the  very  beginning,  because  of  its  greater  power  to  adapt 
itself  to  varied  traffic  requirements.  It  is  flexible  in  matters  of  speed, 
extensibility,  terminal  adaptability,  and  the  like,  and  it  is,  moreover, 
much  more  reliable.  Consequently,  it  drew  away  at  once  all  passenger 
travel,  except  excursion  business  and  local  or  ferry  traffic,  and  all 
mail,  express,  and  fast-freight  business,  which  deprived  the  steam- 
boats of  their  most  lucrative  sources  of  earnings,  being  greatly  aided 
in  this  endeavor  by  the  interruption  to  water  transportation  during 
the  war.  But  not  only  was  the  railway  naturally  more  efficient, 
but  it  grew  more  efficient,  relatively,  as  the  years  went  on,  for  the 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  669 

steamboat  business  stood  still  or  declined  after  1860,  except  in  its 
handling  of  a  few  products  by  barge. 

Whether  it  is  true  or  not,  as  frequently  charged,  that  railways  have 
secured  control  of  steamboat  lines,  have  purposely  kept  them  ineffi- 
cient, and  have  operated  them  to  keep  efficient  service  off  the  rivers, 
it  is  undoubtedly  true  that  they  have,  .  .  .  reduced  rates  at  water 
competitive  points  and  recouped  themselves  elsewhere.  In  this  prac- 
tice, supported  as  they  are  by  judicial  decree,  they  have  a  monopolized 
advantage  from  which  competing  steamboat  lines  are  excluded. 

The  question  whether  the  rivers  any  longer  exert  an  influence 
upon  rail  rates  has  been  frequently  debated,  emphatic  assertions 
by  the  railways  that  such  influence  is  still  potent  being  met  by  equally 
emphatic  statements  that  the  river  in  its  present  condition  is  power- 
less to  affect  the  rail  rate.  In  the  preliminary  report  of  the  Inland 
Waterways  Commission  are  included  elaborate  comparisons  of  rail 
and  water  rates  to  various  points  for  different  classes  and  kinds  of 
commodities.  It  would  appear  from  a  careful  study  of  the  tables 
bearing  upon  the  Mississippi  River  situation  that  the  waterway, 
inefficient  as  it  is,  exerts  an  influence  to-day  upon  the  rail  rate  varying 
in  degree  according  to  circumstances.  This  is  made  clear  by  a  com- 
parison of  rates  charged  by  railways  paralleling  the  Mississippi  north 
of  St.  Louis,  where  water  traffic  still  prevails,  with  rates  charged  for 
similar  distances  by  railways  paralleling  the  Missouri,  which  is  no 
longer  a  commercial  factor.  Rates  on  this  stretch  of  the  Mississippi 
are  lower  for  the  same  commodity  and  distance.  Yet  when  the  cost 
of  marine  insurance  is  added  to  the  river  rate,  and  also  the  drayage 
charges  which  so  frequently  accompany  the  consignment  and  receipt 
of  river  traffic,  it  is  a  question  whether  railways  could  not,  if  they  saw 
fit,  absorb  most  of  the  water  traffic,  provided  their  equipment  was 
adequate.  .  .  . 

The  lack  of  development  of  river  equipment,  already  referred 
to,  has  been  based  in  large  part  upon  legitimate  grounds  —  an  un- 
willingness to  invest  capital  in  an  industry  so  highly  speculative. 
The  risks  are  not  alone  those  of  railway  origin,  but  they  arise  in  part 
from  the  natural  difficulties  of  navigation.  Obstructions  due  to  snags 
and  bars  on  all  the  rivers  except  the  Missouri  have  to  a  considerable 
extent  been  removed,  although  they  are  constantly  liable  to  reappear. 
The  barrier  at  the  mouth  of  the  Mississippi,  which  until  1878  gave 
the  railways  a  decided  advantage,  is  now  gone.  But  there  still  remain 
many  obstacles.  Ice  stops  navigation  for  many  months  of  each  year 
in  the  upper  river.  The  swiftness  of  the  current  demands  a  costly 


670  READINGS  IN  ECONOMIC  HISTORY 

adjustment  of  business  methods  to  meet  the  requirements  of  upstream 
traffic  —  a  difficulty  absent  in  the  Lakes.  The  shifting  and  irregular 
current  and  the  uncertainty  of  the  water  supply  menace  navigation. 
To  such  an  extent  is  this  true  on  the  upper  Mississippi  that  the  one 
line  now  operating  between  St.  Louis  and  St.  Paul  declines  to  make 
season  contracts,  and  accepts  shipments  for  single  trips  only.  Then 
there  are  the  variations  in  depth  of  water,  most  strikingly  shown  on 
the  upper  Ohio  with  the  January  and  February  floods,  when  the  river 
sometimes  rises  at  Cincinnati  to  70  feet  above  low-water  mark.  This 
variation  in  water  depth  is  not  alone  dangerous  to  navigation,  but 
it  prevents  the  application  of  capital  to  the  greatest  economic  advan- 
tage. On  the  Lakes,  with  an  assured  depth  of  water,  the  largest 
vessels  can  be  employed  and  loaded  to  their  capacity.  It  is  not 
profitable  to  build  vessels  on  the  rivers  which  can  run  only  in  the 
best  stages,  and  which  must  lie  idle  during  the  rest  of  the  year.  But 
light-draft  vessels  are  not  economical  in  good  stages  of  water.  More- 
over, these  sharp  and  sudden  variations  in  the  stage  of  water  have 
made  fixed  wharves  impossible  and  have  compelled  the  use  of  the 
less  efficient  floating  dock.  In  low  stages  the  cost  of  loading  and  un- 
loading is  sensibly  increased  in  many  places  by  reason  of  the  steep 
and  high  river  banks. 

But  navigation  is  hindered  not  alone  by  variations  in  stage  of 
water  due  to  floods  and  droughts,  but  also  by  the  normal  difference 
in  depth  of  the  different  sections  of  the  river  system.  The  lack  of 
development  in  the  past  of  any  through  traffic  from  the  upper  Mis- 
sissippi to  New  Orleans,  and  the  persistence  of  the  costly  practice  of 
transfer  at  St.  Louis,  have  been  due  to  this  difference  in  depth  of  the 
lower  and  upper  river,  and  to  the  consequent  difference  in  draft  of 
vessel  employed.  It  was  to  meet  this  difficulty  that  the  barge  system 
was  introduced,  whose  units,  similar  to  railway  cars,  could  be  dropped 
or  attached  at  will,  and  handled  on  different  stretches  of  river  without 
the  necessity  of  transfer  of  load. 

Although  it  must  be  admitted  that  from  a  navigation  standpoint 
the  condition  of  the  Mississippi  is  much  superior  to  what  it  was  in 
the  days  of  its  commercial  prosperity,  yet  much  remains  to  be  done 
and  much  which  is  once  done  has  to  be  frequently  repeated.  The 
destruction  of  banks  due  to  shifting  channels,  and  the  fact  that  the 
Missouri  uses  the  lower  Mississippi  as  a  dumping  ground,  make  con- 
tinuous dredging  necessary,  and  any  lessening  of  vigilance  in  this 
direction  through  failure  of  congressional  appropriations  is  promptly 
punished  by  a  serious  impairment  of  the  navigability  of  the  stream. 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  671 

Yet  however  serious  navigation  difficulties  may  appear  to  us,  they 
can  not,  except  to  a  small  degree,  explain  the  decline  of  river  commerce. 
For  in  spite  of  all  obstructions,  we  possess  free  waterways  which  are 
in  many  respects  superior  to  those  of  Europe;  yet  we  have  but  a  frac- 
tion of  their  tonnage.  A  dead  low-water  channel  of  4^  feet  prevails 
throughout  the  year  from  St.  Paul  to  the  mouth  of  the  Missouri. 
Four  feet  draft  prevails  on  the  Missouri  at  low  water  as  far  as  Kansas 
City.  From  St.  Louis  to  Cairo  there  are  only  a  few  days  in  the  year 
when  a  boat  drawing  8  feet  can  not  operate  freely.  Below  Cairo  for 
840  miles  there  is  a  g-foot  depth  during  low  water,  and  for  the  last 
270  miles  boats  of  25  to  30  feet  draft  can  operate.  On  the  Ohio  from 
Cairo  to  Pittsburg,  there  is  a  g-foot  depth  at  low  water.  In  compari- 
son with  these  figures  it  should  be  noted  that  much  of  the  canal  and 
upriver  boat  traffic  of  Europe  is  performed  on  i  meter  (3.28  feet) 
draft;  most  of  it  is  done  on  2  meters  (6.56  feet)  draft  and  10  feet 
draft  is  exceptional.  Hence  it  is  lack  of  uniformity  in  different 
sections  of  the  river,  and  a  resulting  inability  to  use  equipment  to 
the  best  advantage,  rather  than  the  shallowness  of  the  streams  which 
must  be  accounted  the  important  navigation  obstacle. 

In  the  third  place,  \vhether,  as  a  result  of  the  two  causes  just  men- 
tioned, railway  competition  and  navigation  obstacles,  or  whether, 
because  of  a  lack  of  initiative  on  the  part  of  river  interests  after  the 
war,  the  steamboat  business  has  been  wholly  lacking  in  the  administra- 
tive organization  necessary  to  cope  with  so  superbly  organized  an 
industry  as  the  railway.  Capital  has  kept  out  of  it.  The  river  steam- 
boat, except  that  it  has  changed  from  a  passenger  to  a  freight  carrier, 
is  the  same  craft  as  always.  As  late  as  1006,  out  of  a  total  of  1,435 
steam  vessels  on  the  Mississippi  River  system,  1,358,  or  95  per  cent, 
were  of  wood.  The  old  inefficient  "roustabout"  labor  is  still  em- 
ployed, and  no  attempt  whatever  has  been  made  to  introduce  me- 
chanical appliances  for  loading  and  unloading.  There  are  very  few 
satisfactory  wharves  and  docks,  many  of  the  landings  being  made  on 
the  river  bank,  and  the  goods  dumped  on  shore  without  cover.  As 
the  rivers  are  at  the  lowest  levels,  goods  must  be  hauled  uphill  to 
reach  a  place  of  sale.  Good  natural  landings  are  few,  and  artificial 
ones  are  too  expensive  to  be  within  the  reach  of  small  communities. 
Thus  the  terminal  expenses  as  compared  with  the  more  flexible  rail- 
ways are  very  heavy. 

Adequate  terminal  facilities  are  in  very  few  instances  owned  or 
controlled  by  water  lines.  .  .  . 

In  many  cases  all  satisfactory  terminal  property  has  been  acquired 


672  READINGS  IN  ECONOMIC  HISTORY 

by  the  railways.  For  example,  portions  of  the  river  front  at  Pitts- 
burg,  New  Orleans,  St.  Louis,  and  Vicksburg  are  owned  by  railway 
corporations.  The  primary  purpose  of  the  railways  is  not  to  check 
the  development  of  water  transportation,  but  to  secure  desirable 
land  for  switch  tracks  and  yards,  yet  its  effect  upon  the  development 
of  steamboat  traffic  is  disastrous. 

Furthermore,  nearly  half  of  the  steam  vessels  operated  on  the 
Mississippi,  representing,  however,  only  about  one-quarter  of  the  ton- 
nage, are  owned  by  individuals,  and  are  run  independently  with  very 
little  thought  of  securing  united  action  toward  better  organization  of 
river  traffic.  This  makes  it  impossible  for  shippers  to  arrange  for 
through  handling  of  goods.  Repeated  rehandlings  by  irresponsible 
steamboat  captains  cause  damage  to  the  goods,  and  make  location  of 
responsibility  for  the  damage  difficult  and  the  settlement  slow  and 
costly.  Practically  the  only  traffic  which  is  well  organized  is  that  of 
coal  on  the  Ohio,  and  this  is  largely  under  the  control  of  a  single 
corporation.  Of  the  total  tonnage  in  1906  of  unrigged  vessels,  96.6 
per  cent  was  owned  by  corporations. 

Finally  there  was  and  still  is  a  fundamental  cause  of  decline  of 
river  commerce  to  be  found  in  the  relation  of  traffic  movement  to 
traffic  agencies.  So  long  as  wheat  and  corn  were  produced  near  the 
waterways  and  could  be  disposed  of  at  markets  located  on  the  rivers, 
traffic  by  river  continued;  but  so  soon  as  either  of  these  conditions 
was  no  longer  present,  the  railway  began  to  take  the  business.  If 
grain  was  shipped  from  a  river  port  and  required  transfer  to  rail  for 
delivery  at  a  primary  market,  like  Chicago,  the  expense  of  transfer 
and  the  lack  of  all  facilities  for  satisfactory  handling  turned  the 
traffic  at  its  source  to  the  railways.  When  grain  began  to  be  produced 
away  from  the  waterways,  it  had  to  be  loaded  at  first  into  railway 
cars,  and  once  in  the  cars  it  remained  there  until  it  reached  its  market. 
The  movement  of  the  wheat  area  northwestward  to  a  region  west  of 
Lake  Superior  and  the  advance  of  the  corn  area  westward  enhanced 
this  tendency,  and  the  railways  encouraged  it  both  by  the  provision 
of  suitable  facilities  for  storage  and  handling  and  by  the  adjustment 
of  their  rates.  The  effect  upon  the  Mississippi  River  is  strikingly 
shown  by  the  fact  that  although  in  the  fifties  there  were  many  towns 
with  prospects  of  rapid  and  successful  development,  yet  at  the  census 
of  1900  there  was  not  a  river  town  from  St.  Paul  to  St.  Louis  with 
40,000  people  and  only  three,  Quincy,  Davenport,  and  Dubuque, 
with  over  25,000  inhabitants.  The  same  principle  may  be  illustrated 
in  other  parts  of  the  system.  For  example,  Madison  and  New  Al- 


COMMERCE,  TRANSPORTATION,  AND   COMMUNICATION  673 

bany,  Ind.,  both  declined  in  population  between  1890  and  1900,  and 
neither  of  them  had  25,000  people  in  the  latter  year,  whereas  Indian- 
apolis, pre-eminently  a  railway  center,  which  in  1840  had  less  popula- 
tion than  either  of  the  towns  mentioned  and  in  1850  almost  exactly 
the  same  number,  had  in  1900  a  population  of  169,000. 

So  far  as  export  business  by  way  of  New  Orleans  is  concerned,  the 
long  roundabout  journey,  combined  with  lack  of  satisfactory  steam- 
ship facilities  at  New  Orleans,  has  had  its  influence  in  turning  traffic 
eastward  by  rail. 

The  kind  of  business  which  has  most  satisfactorily  developed  on 
the  Mississippi  River  system  has  been  that  transported  in  the  form 
of  rafts,  the  lumber  business,  and  that  handled  by  barges,  of  which 
coal  is  the  best  example.  The  former  flourished  on  the  upper  Mis- 
sissippi, and  is  still  prosperous  on  the  lower  Mississippi  and  the  Ohio 
and  tributaries,  because,  as  already  indicated,  it  can  be  slipped  into 
the  water  and  carried  to  its  market  with  little  expenditure  of  labor 
and  with  no  necessity  of  transfer.  So  soon  as  the  forests  were  cut  off 
on  the  banks  of  upper  Mississippi  tributaries,  rafting  began  to  decline, 
and  a  rapidly  increasing  proportion  of  lumber  and  log  output  was 
carried  by  rail. 

The  Ohio  River  coal  traffic  illustrates  peculiarly  well  the  kind  and 
method  of  business  to  which  the  river  system  is  at  present  adapted. 
In  this  industry,  to  be  sure,  are  some  of  the  advantages  which  are 
lacking  in  any  other,  namely,  administrative  organization,  mechanical 
loading  appliances,  and  the  highest  development  of  barge  traffic. 
But  in  addition  to  all  this,  coal  can  be  loaded  direct  from  the  mines 
into  the  barges  and  can  then  be  transported  without  any  rehandling 
to  its  destination,  which  is  the  river  steamboat,  the  ocean-going 
steamship,  the  sugar  plantation  on  the  bay,  or  the  railway  coal  yard 
on  the  river  bank.  In  other  words,  the  Mississippi  can  at  present 
handle  traffic  successfully  which  begins  and  ends  within  its  banks, 
but  traffic  requiring  transfer  to  the  railway  at  any  point  on  its  course 
will  have  a  tendency  to  resort  to  the  railway  for  the  entire  distance. 
Whether  this  situation  is  due  to  a  control  of  terminal  and  transfer 
facilities  by  the  railways  and  a  refusal  to  pro  rate  with  the  waterway, 
whether  it  is  due  to  lack  of  initiative  on  the  part  of  river  interests  in 
developing  transfer  facilities,  or  whether  it  is  due  to  the  greater  cheap- 
ness of  an  all-rail  haul,  the  fact  remains  that  carriage  involving  transfer 
no  longer  makes  use  of  the  Mississippi  River  system. 

A  recent  special  report  of  a  board  of  United  States  engineers 
calls  attention,  in  explaining  the  insignificant  commerce  of  the  lower 


674  READINGS  IN  ECONOMIC  HISTORY 

Mississippi,  to  the  fact  that  the  population  in  sections  bordering  the 
river  is  as  low  as  86  to  24  per  square  mile,  including  cities,  and  that  in 
a  total  length  of  about  1,265  miles  there  are  only  seven  towns  or 
cities  of  over  10,000  population  and  only  23  of  over  5,000  population. 
In  reply  to  this  and  in  answer  to  the  statements  which  picture  the 
declining  condition  of  river  commerce  the  advocates  of  waterways 
insist  that  if  they  were  given  an  improved  channel  commensurate  with 
the  needs  of  business,  traffic  would  come  and  the  thinly  settled  sections 
along  the  rivers  would  be  built  up.  They  also  contend  that  even 
if  commerce  were  not  developed  by  the  waterway  the  existence  of  a 
waterway  ready  for  use  would  so  affect  railway  rates  as  amply  to 
justify  the  expenditure  for  construction.  This  last  contention  may 
be  dismissed  with  a  few  words.  No  expenditure  by  the  National 
Government  would  be  justified  for  the  construction  or  improvement  of 
a  useless  or  idle  waterway  unless  the  saving  could  be  clearly  demon- 
strated in  advance.  Such  a  demonstration  would,  in  the  nature  of 
things,  be  quite  impossible,  for  it  is  evident  that  the  comparative 
attractiveness  of  rail  and  water  routes  is  not  a  simple  question  of 
comparative  rates.  A  variety  of  factors  which  can  be  summed  up 
in  the  word  "serviceability"  actually  determine  the  method  of  ship- 
ment, and  such  factors  can  not  be  predetermined.  If  the  purpose 
is  to  reduce  railway  rates,  there  are  more  direct  and  less  costly 
methods  of  accomplishing  this  result. 

The  influence  of  a  waterway  in  developing  traffic  is  somewhat 
problematical,  and  no  final  answer  can  be  given  to  the  claims 
of  those  who  insist  that  trade  will  follow  the  lock  and  the  dam. 
Although  there  are  real  obstacles  at  present  to  successful  naviga- 
tion, as  already  noted,  nevertheless  it  is  difficult  to  understand 
why  the  commercial  interests,  if  they  are  so  eager  for  a  waterway, 
have  not  made  better  use  of  existing  facilities.  The  inference  is 
a  natural  one  that  the  trouble  lies  elsewhere  than  in  the  condition 
of  water  navigation. 

But  it  must  be  admitted  that  there  is  some  basis  for  the  contention 
that  good  traffic  facilities  develop  traffic.  The  truth  of  this  has  been 
often  demonstrated  by  the  railways.  The  waterway  advocates  have 
reason  to  count  upon  a  repetition  at  least  in  part  of  railway  experience, 
but  hardly  to  the  extent  claimed  by  some  of  the  extremists  among  the 
supporters  of  the  policy.  They  have,  however,  the  right  to  a  reason- 
able assurance  that  such  improvement  work  as  is  now  being  carried 
on  and  such  plans  as  have  been  undertaken  for  further  betterment 
shall  be  continuous,  in  order  that  such  investments  as  they  may  make 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  675 

in  floating  equipment  shall  not  be  lost  by  an  abandonment  of  im- 
provement work. 

To  four  general  influences,  then,  may  be  assigned  the  decline  in 
Mississippi  River  commerce:  First,  competition  of  rail  and  lake; 
second,  natural  obstructions  to  navigation ;  third,  lack  of  administra- 
tive organization  of  the  water  transportation  business;  and  fourth, 
certain  fundamental  principles  of  traffic  movement  which  under  ex- 
isting conditions  work  to  the  disadvantage  of  water  carriage. 

D.    The  Future  of  Rail  and  Water  Transportation  l 

Mr.  James  J.  Hill,  one  of  the  best  known  railroad  men  of  the  country,  gave  it 
as  his  opinion  in  1908  that  there  was  no  antagonism  between  railroads  and  internal 
waterways.  He  said  further  that  the  ideal  situation  was  one  in  which  each  of  these 
channels  of  communication  would  supplement  the  other. 

.  .  .  The  phrase,  "The  Future  of  Rail  and  Water  Transportation," 
indicates  their  close  correlation.  I  am  glad  to  emphasize  right  here 
the  fact  that  their  relation  is  one  of  harmony,  of  helpfulness  and 
of  co-operation. 

There  is  no  reason  from  the  railway  standpoint  why  it  should  be 
otherwise.  The  trunk  lines  between  Chicago  and  New  York  were 
built  and  have  created  then-  enormous  traffic  in  face  of  the  competi- 
tion of  the  Erie  canal.  St.  Louis,  one  of  the  important  centers  of 
railroad  business  on  this  continent,  has  the  Mississippi  at  her  sendee. 
On  the  Ohio  is  some  of  the  cheapest  water  carriage  in  the  country. 
Its  cost  in  1905  is  reported  as  .76  of  one  mill  per  ton  per  mile  to  move 
freight  by  river  from  Pittsburg  to  Louisville,  and  .67  of  one  mill  per 
ton  per  mile  from  Louisville  to  New  Orleans.  Rates  much  lower 
than  these  are  made  on  barge  tows  during  the  season.  This  is  a  cheap 
and  convenient  route  by  which  the  coal  of  Pennsylvania  and  Ohio 
may  be  moved  to  the  factories  of  St.  Louis.  Coal  can  be  shipped 
profitably  by  water  if  anything  can.  What  is  the  fact?  Of  a  total  of 
8,743,047  tons  of  coal  received  at  St.  Louis  in  1907,  just  155,470  tons 
were  carried  by  boat.  A  large  part  of  this  comes  from  local  mines. 
Every  pound  of  the  1,155,645  tons  shipped  out  went  by  rail.  And  of 
all  commodities  received  at  and  shipped  from  that  city,  amounting 
in  1907  to  nearly  48,000,000  tons,  just  368,075  tons,  or  less  than  .79 
of  one  per  cent.,  were  brought  in  or  sent  out  by  water.  The  chair- 
man of  the  freight  committee  of  the  New  Orleans  Board  of  Trade 
says,  in  the  last  report  of  that  body:  "It  is  a  well-known  fact  that  the 

1  Letter  of  James  J.  Hill.  Read  at  The-Lake-to-the-Gulf  Deep  Waterway 
Convention  (Chicago,  October  yth-Qth,  1908),  1-6,  12-6,  24-6. 


676  READINGS  IN  ECONOMIC  HISTORY 

steamboats  plying  out  of  this  port  find  a  number  of  prominent  rail- 
road competitive  points  on  their  route.  It  is  also,  we  regret  to  say,  a 
positive  fact  that  our  boats  are  accorded  but  little  business  shipping 
out  of  this  city  to  said  points.  Practically  the  only  out-bound  freights 
that  are  shipped  on  the  boats  are  such  as  cannot  be  delivered  by  a 
railroad."  Galveston,  with  no  such  waterway  at  her  doors,  exported 
14,172,071  bushels  of  wheat  in  1007,  as  against  5,496,935  for  New 
Orleans.  Up  to  this  time  the  river  has  been  unable  to  compete  with 
the  railroad,  notwithstanding  its  lower  charges,  because  of  the  rapidity 
and  certainty  with  which  the  latter  carries  and  delivers  freight.  In 
the  year  1855-56  the  domestic  exports  from  New  Orleans  amounted 
to  $80,000,000,  and  were  practically  all  carried  by  water.  Not  in 
recent  times  has  the  commerce  of  the  lower  river  reached  $3,000,000, 
although  the  total  imports  and  exports  of  New  Orleans  in  1907 
were  over  $200,000,000.  These  figures  expose  the  absurdity  of 
the  theory  that  the  railroads  need  feel  either  jealousy  or  fear  of  the 
waterway. 

I  have  shown  the  failures  of  certain  waterways  as  competitors 
of  rail  lines.  Equally  interesting  is  their  experience  with  a  waterway 
which  is  a  glorious  success  and  already  the  most  wonderful  thorough- 
fare for  steam  craft  in  the  world.  On  the  Great  Lakes  97,000,000 
tons  were  carried  last  year.  The  volume  of  lake  commerce  is  always 
growing.  The  registered  tonnage  of  the  "Soo"  canal  in  1907  was 
over  44,000,000  tons.  Over  60,000,000  tons  passed  the  Detroit 
river  in  1906.  The  ore  alone  carried  last  year  by  the  lake  route 
amounted  to  over  900  pounds  for  every  man,  woman  and  child  in 
the  United  States.  The  tonnage  passing  through  the  Suez  canal 
in  the  same  year  was  but  14,728,434.  But  while  the  phenomenal 
growth  of  lake  business  and  reduction  of  the  lake  rate,  which  was 
22.36  cents  per  bushel  by  lake  and  canal  from  Chicago  to  New  York 
in  1867  and  6.64  cents  in  1907,  have  taken  place  practically  within 
the  last  twenty-five  years,  the  railroads  running  west  and  northwest 
from  Buffalo  and  Chicago  have  not  suffered.  On  the  contrary,  in 
this  territory  traffic  has  increased  with  amazing  rapidity;  and  the 
capacity  of  the  railroads  is  taxed  to  handle  business  that  cannot  or 
will  not  use  other  routes. 

Every  intelligent  railroad  man  knew  this  long  ago.  He  dis- 
missed fear  of  the  waterway  as  a  competitor;  not  because  it  is  either 
unimportant  or  powerless,  but  because  the*  two  carriers  are  supple- 
mentary instead  of  mutually  destructive.  He  foresaw  the  day,  when 
under  normal  business  conditions  the  railroads  would  be  unequal  to 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  677 

the  work  demanded  of  them;  when  the  assistance  of  the  waterway 
would  be  valuable,  both  as  a  carrier  and  as  tending  to  relieve  conges- 
tion by  increasing  the  number  and  extending  the  geographical  and 
necessary  distribution  of  terminals.  And  he  has  worked  to  that  end. 
You  cannot  find  a  man  eminent  in  railroading  in  this  country  to-day 
who  is  not  also  an  ardent  advocate  of  waterway  improvement.  Let 
us  start  right  by  dismissing  this  bogey  of  envy  and  baseless  opposition. 
Senator  Knox  has  stated  the  case  correctly  in  these  terse  words: 
"  European  experience  has  established  the  law  that  with  waterways 
carrying  the  slow  and  heavy  freights  which  most  congest  the  railways 
and  on  which  their  return  is  most  narrow,  the  growth  of  industry 
and  population  more  than  compensates  them  in  the  growth  of  their 
high-class  freight,  express,  mail  and  passenger  traffic." 

Understanding,  then,  that  railroads  and  waterways  are  to  work 
together  for  the  development  of  this  country  and  the  betterment  of  its 
people,  how  can  each  be  aided  most  in  discharging  its  vast  and  valuable 
functions  in  the  national  economy?  I  have  already  stated  on  different 
occasions  the  determining  facts  bearing  upon  the  future  of  railroading 
in  this  country.  The  passage  of  time  only  intensifies  the  difficulties 
of  the  situation.  Two  years  ago  I  pointed  out  that,  in  the  ten  years 
between  1895  and  1905,  the  railroad  mileage  of  the  country  had  in- 
creased but  21  per  cent.,  while  the  passenger  business  had  grown  95 
per  cent,  and  the  freight  business  118  per  cent.  The  latest  report  of 
the  Interstate  Commerce  Commission  carries  an  even  graver  warning. 
By  the  decade  ending  in  1907,  the  increase  of  mileage  as  compared 
with  1897  had  crept  up  to  24.7  per  cent.;  but  in  the  same  time  the  in- 
crease of  passenger  business  had  leaped  to  126.1  per  cent.,  and  that 
of  freight  traffic  to  148.7  per  cent. 

The  country  was  saved  from  a  complete  traffic  breakdown  only 
by  increasing  operating  efficiency  after  it  had  already  been  raised 
apparently  to  the  limit.  Density  of  traffic  might  have  been  thought 
to  have  reached  its  maximum  in  1906,  when  every  railroad  performed 
prodigies  in  order  to  do  the  work  required  of  it.  Yet  the  increase  of 
density  hi  1907  on  the  entire  railroad  system  of  the  country  was 
69,718  freight  tons  for  every  mile  of  line,  or  about  20  tons  per  mile  for 
every  day  in  the  year.  I  have  for  years  been  urging  that  the  building 
up  of  a  transportation  machine  commensurate  with  the  growth 
of  the  country  should  not  only  be  permitted  but  encouraged  in 
the  only  two  possible  ways:  First,  by  encouraging  capital  to 
invest  in  railroad  construction,  instead  of  scaring  it  away  by  hostile 
and  unjust  legislation;  and,  second,  by  a  comprehensive  and 


678  READINGS  IN  ECONOMIC  HISTORY 

rational  system  of  waterway  improvement.  There  is  no  other  way 
now,  nor  will  there  ever  be,  by  which  the  business  of  the  country  can 
be  done.  ."  .  . 

...  It  will  be  the  deep  waterway  that  helps  business,  just  as  it  is 
the  deep  harbor  that  has  built  up  trade  and  lowered  rates  by  making 
it  possible  to  run  boats  of  greater  tonnage.  I  said  a  year  ago  to  the 
members  of  the  National  Rivers  and  Harbors  Congress  that  they  should 
work  for  -a  fifteen-foot  channel  in  the  Mississippi  and  that  eighteen 
or  twenty  would  be  twice  as  good.  If  you  have  a  waterway,  you 
want  it  deep  enough  to  do  business.  A  barge  that  carries  only  1,000 
tons  cannot  compete  with  a  box  car.  With  a  steamer  carrying  10,000 
tons  you  have  beaten  it.  Twenty  years  ago  the  largest  carriers  on 
the  lakes  that  could  pass  through  the  old  "Soo"  canal,  with  its 
fourteen-foot  locks,  were  about  3,000  tons.  To-day  an  ordinary 
load  is  10,000  or  12,000  tons.  The  canal  has  been  deepened  to 
twenty-one  feet,  and  with  what  result?  The  commerce  of  the  Great 
Lakes  is  one  of  the  wonders  of  the  world.  Twenty  years  ago  Duluth 
was  a  little  town  with  a  promising  local  trade  only.  To-day  it  is 
one  of  the  great  shipping  ports  of  the  world,  with  unlimited  possi- 
bilities of  expansion.  For  1005  the  total  tonnage  of  New  York 
harbor,  foreign  and  coastwise,  was  30,314,062.  For  1906  Chicago's 
tonnage  was  15,638,051.  That  of  Liverpool  and  Birkenhead  in  1906 
was  16,147,856,  and  London's  in  1905  was  25,867,485.  The  govern- 
ment report  for  the  year  1007  gives  the  tonnage  of  the  Duluth-Su- 
perior  harbor  at  34,786,705,  with  a  valuation  of  $287,529,705.  Deep 
harbors  on  the  lakes,  admitting  the  use  of  big  freighters,  have  made 
such  growth  in  all  our  lake  cities  possible.  The  first  principle  of 
river  improvement,  then,  is  that  these  shall  be  made  deep  water- 
ways; real  and  not  useless  arteries  for  commerce.  .  .  . 

Waterways  should  be  made  as  other  great  works  are  created. 
The  first  railroads  did  not  begin  in  the  heart  of  the  country  and  end 
nowhere.  They  were  lines  between  important  centers  and  terminal 
points;  and  extensions,  branches  and  feeders  were  added  as  needed. 
That  is  what  waterway  improvement  needs.  Locate  your  trunk 
lines  first.  Open  a  way  to  the  sea  by  the  biggest,  freest  outlet. 
Push  the  work  as  nature  indicates,  from  the  seacoast  up  the  rivers. 
And  this,  of  course,  should  be  done  with  ample  resources  according  to 
a  general  scheme  which  will  include  reservoirs  on  the  head  waters  of 
the  main  stream  and  as  many  of  its  tributaries  as  may  be  necessary 
to  prevent  floods  and  maintain  a  deep  channel  in  the  dry  season; 
together  with  such  canalization  of  the  river,  or  canal  construction 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  679 

parallel  with  its  course,  as  will  assure  a  sufficient  and  permanent  chan- 
nel for  boats  of  the  largest  size  during  the  season  of  navigation. 

There  would  be  general  agreement,  probably,  that  the  lower 
Mississippi,  from  New  Orleans  to  St.  Louis,  should  first  be  opened 
to  navigation;  and  that  the  deep  water  connection  with  the  lakes 
should  come  next.  And  it  is  as  important  that  the  order  of  these 
improvements  be  not  reversed  as  it  is  that  you  do  not  set  the  water 
running  in  your  bathroom  before  you  have  provided  an  escape  pipe 
and  a  sewer  connection.  The  Mississippi  basin  contains  two-fifths 
of  the  area  of  the  United  States;  more  than  half  its  population  lives 
hi  States  touching  the  navigable  portions  of  the  great  river  and  its 
tributaries,  and  its  products  feed  the  world.  We  have  really  done 
nothing  permanent  yet  to  make  it  a  navigable  river.  Protection  of 
caving  banks,  revetment,  dredging  and  snag-pulling  are  only  tempo- 
rary expedients.  The  river  is  not  and  cannot  now  be  used  as  a  carrier 
ought  to  be  if  it  is  to  play  a  part  in  national  transportation.  In  1888 
there  were  3,323  boats  and  barges,  carrying  597,955  tons  of  freight, 
besides  lumber  and  logs,  arriving  at  St.  Louis.  In  1907  there  were 
I>33°>  carrying  289,575  tons.  The  departures  in  1888  numbered 
2,076,  with  510,115  tons;  in  1907  they  were  931,  with  78,500  tons. 
There  is  small  reason  to  wonder  at  the  decline  when  the  government 
record  of  river  stages  shows  the  lowest  gauge,  which,  of  course,  gov- 
erns the  whole  steamboat  business,  to  have  been  four  feet  and  three- 
tenths  in  one  month  of  1007,  and  for  six  months  to  have  been  no  higher 
than  eight  and  one-tenth  feet  at  St.  Louis.  Yet  in  the  last  forty 
years  the  government  has  spent  $250,000,000  on  the  Mississippi  and 
its  more  important  branches.  .  .  . 

The  future  of  the  waterway  as  a  factor  in  transportation  cannot 
be  injured  except  by  folly.  The  essentials  for  developing  its  highest 
possibilities  are  few  and  simple.  Let  me,  for  clearness,  repeat  them. 
First,  a  permanent  commission,  authorized  to  expend  appropriations 
in  its  discretion  upon  national  waterways  in  the  order  of  their  impor- 
tance. Second,  a  comprehensive  plan  including  the  classification  of 
rivers  and  canal  routes  in  the  order  of  their  value,  including  also 
such  reservoir  and  slackwater  work  as  may  be  required  for  the  working 
out  of  each  project  to  success.  This  plan  in  its  essentials  to  be 
adopted  by  the  commission  at  the  outset  and  adhered  to  without  inter- 
ference by  Congress  or  any  department.  Third,  insistence  upon  the 
development  of  trunk  lines  first,  and  upon  a  depth  that  will  make 
these  real  carriers  of  commerce,  able  to  aid  the  railroads  in  their 
staggering  task  and  to  transport  bulky  freight  expeditiously  and 


68o  READINGS  IN  ECONOMIC  HISTORY 

economically.  Fourth,  a  liberal  standing  appropriation  annually 
for  the  commission's  work  until  its  plans  shall  have  been  carried  out 
over  the  whole  country;  and  a  refusal  to  ask  the  pledge  of  the  nation's 
credit  for  a  single  dollar  of  this,  which  is  properly  our  work. 

V.   COMMUNICATION 

A.     Development  of  Telegraph  and  Telephone  Systems,  1844-1 907 l 

The  extension  of  the  telegraph  service  to  all  parts  of  the  country  has  tended  to 
eliminate  distances  and  thus  to  facilitate  business.  Scarcely  a  village  is  without 
its  telephones,  and  even  thousands  of  farmers  have  telephonic  connection  with  each 
other  and  with  adjoining  towns  and  cities. 

The  first  telegraph  line  in  the  United  States  was  opened  for 
business  in  1844,  and  thirty- two  years  later  the  telephone  was  in- 
troduced. In  the  early  stages  of  its  development  the  telephone 
industry  was  associated  with  the  telegraph  industry,  but  the  two 
have  now  long  been  distinct,  and  the  telephone  is  to  some  extent  a 
competitor  of  the  telegraph  for  the  business  of  long-distance  commu- 
nication, although  recently  the  leading  telephone  company  has  ac- 
quired a  large  stock  interest  in  one  of  the  leading  telegraph  companies. 
At  the  census  of  1880  the  telegraph  companies  reported  the  opera- 
tion of  291,213  miles  of  wire  as  compared  with  34,305  miles  reported 
for  the  telephone  companies.  By  the  census  of  1902  the  amount  of 
wire  for  the  telegraph  systems  had  increased  to  1,318,350  miles  and 
that  for  the  telephone  systems  to  4,900,451  miles.  Thus  in  1902  the 
mileage  of  wire  devoted  to  the  transmission  of  telephone  messages 
was  almost  four  times  as  great  as  that  used  for  telegraph  purposes. 

Both  industries  developed  rapidly  between  1902  and  1907,  and  by 
the  end  of  that  period  the  mileage  of  single  wire  devoted  primarily 
to  the  telephone  business  was  eight  times  as  great  as  the  mileage 
used  for  the  commercial  telegraph  business. 

In  the  amount  of  business  done  in  1907,  the  amount  paid  in 
salaries  and  wages  during  the  year,  and  the  capital  invested,  the 
telephone  business  was  more  than  three  and  one-half  times  as  extensive 
as  the  telegraph  industry,  and  during  the  year  it  furnished  employ- 
ment for  more  than  five  times  as  many  persons. 

In  1907  a  total  of  14,570,142  miles  of  wire  was  in  use  for  the  trans- 
mission of  commercial  messages,  and  of  this  total,  12,999,369  miles, 
or  89.2  per  cent,  were  used  primarily  for  telephone  messages, 

1  Department  of  Commerce  and  Labor,  Bureau  of  the  Census.  Special  Re- 
ports. Telephone:  1907  (Washington,  1910),  15-18. 


COMMERCE,   TRANSPORTATION,   AND   COMMUNICATION  68 1 

and  1,570,773  miles,  or  10.8  per  cent,  for  the  telegraph  business. 
The  telephone  business  has  increased  more  rapidly  than  the  other 
branch  of  the  industry.  Between  1902  and  1907  there  was  an  addi- 
tion of  8,098,918  miles  of  wire  for  the  use  of  the  telephone  systems 
of  the  country  as  compared  with  an  increase  of  259,611  in  the  mileage 
of  owned  and  leased  wire  for  the  use  of  commercial  telegraph  systems. 
The  increase  in  the  wire  mileage  of  the  telephone  systems  during  that 
period  of  five  years  is  more  than  six  times  as  great  as  the  total  amount 
of  existing  wire  that  has  been  added  to  the  telegraph  business  since  the 
date  when  the  first  statistics  concerning  the  industry  were  gathered. 

The  development  of  the  long-distance  telephone  system  and  the 
increasing  use  by  railway  companies  of  the  telephone  for  the  dispatch 
of  business  have  necessarily  had  some  effect  on  the  extension  of  the 
use  of  the  telegraph.  Naturally  the  increase  in  the  use  of  the  tele- 
phone has  greatly  outdistanced  the  increase  in  the  use  of  the  tele- 
graph. .  .  . 

At  the  close  of  1907  the  amount  of  wire  in  use  by  the  telephone 
systems  of  the  country  exceeded  that  in  use  in  1902  by  more  than 
8,000,000  miles,  and  the  other  leading  items  showed  proportionately 
large  increases.  It  is  especially  interesting  to  learn  that  the  industry 
gave  regular  employment  to  65,417  more  persons  in  1907  than  it  did 
five  years  earlier,  and  that  the  amount  expended  in  salaries  and  wages 
was  greater  by  $32,023,506  in  1907  than  in  1902. 

Until  recent  years  the  field  of  operation  of  a  telephone  system 
was  restricted  to  a  comparatively  small  area,  but  the  introduction 
of  the  long-distance  lines  and  the  arrangements  for  toll  service  between 
neighboring  companies  have  made  communication  possible  between 
widely  separated  sections  of  the  country  with  a  facility  which  of  itself 
has  contributed  to  increase  the  business  of  the  industry. 

Naturally  the  most  extensive  equipment  and  the  greatest  amount 
of  business  are  found  in  the  states  that  have  the  largest  population.  .  .  . 

The  industry  is  largely  concentrated  in  the  populous  North 
Atlantic  and  North  Central  states,  and  the  greatest  amount  of  increase 
between  the  years  1902  and  1907  in  wire  mileage,  telephones,  and 
business  is  shown  for  these  states.  More  rapid  rates  of  increase 
occurred  in  other  sections,  however,  and  the  largest  percentages  of 
gain  for  wire  mileage  are  shown  for  the  Western,  South  Central,  and 
South  Atlantic  states,  where,  as  a  rule,  the  telephones  are  farther 
apart  than  in  the  other  divisions.  The  Western  states  had  the  largest 
percentages  of  increase  also  in  the  number  of  telephones  and  messages 
or  talks.  In  accepting  the  percentages  of  increase  the  relative  size 


682  READINGS  IN  ECONOMIC  HISTORY 

of  the  totals  involved  should  be  given  due  weight.  Between  1902 
and  1907  New  York  had  the  greatest  increases  in  the  number  of  tele- 
phones and  in  the  miles  of  wire,  the  gains  being  438,172  and  1,006,451, 
respectively;  whereas  the  corresponding  increases  for  the  entire 
Western  division,  332,854  telephones  and  898,411  miles  of  wire,  are 
less  than  those  for  the  single  state  of  New  York.  Yet  the  rate  of 
increase  for  telephones  in  the  Western  division  is  nearly  equal  to  that 
for  New  York  state,  the  rates  being  160.5  Per  cent  for  the  division 
and  177.2  per  cent  for  the  state;  while  the  rate  of  increase  for  miles  of 
wire  in  the  Western  division,  293.8  per  cent,  far  exceeds  that  for 
New  York  state,  161.4  Per  cent. 

In  1907  eleven  states  had  over  200,000  telephones  each,  while 
in  1902  only  three  states  —  New  York,  Ohio,  and  Illinois  —  had  this 
number.  ... 

B.    The  Postal  System,  IQII  l 

The  post  office  system  has  extended  its  services  to  every  part  of  the  country, 
until  improvements  on  any  large  scale  seem  scarcely  possible.  The  fastest  trains 
carry  the  mail,  city  routes  are  covered  several  times  daily  and  even  hundreds 
of  thousands  of  country  homes  have  their  mail  brought  direct  to  their  doors 
daily.  The  parcels  post  has  become  a  reality  and  those  who  objected  to  the 
Government  assuming  such  function  have  been  silenced  by  its  success.  Condi- 
tions as  they  were  in  1911  were  described  by  the  Postmaster  General  as  follows: 

A  POSTAL   SURPLUS 

For  the  first  time  since  1883  the  annual  financial  statement  of  the 
Post  Office  Department  shows  a  surplus  instead  of  a  deficit.  The 
revenues  for  the  fiscal  year  ended  June  30,  1911,  amounted  to  $237,- 
879,823.60  and  the  expenditures  to  $237,660,705.48,  leaving  a  surplus 
of  $219,118.12.  At  the  beginning  of  the  present  administration  in 
1909  the  postal  service  was  in  arrears  to  the  extent  of  $17,479,770.47, 
which  was  decidedly  the  largest  deficit  on  record.  In  the  brief  space 
of  two  years  this  deficit  has  been  changed  into  a  substantial  surplus. 

EXTENSION   OF   THE   SERVICE 

The  wiping  out  of  the  deficit  has  been  accomplished  without 
curtailment  of  postal  facilities.  On  the  contrary,  important  exten- 
sions have  been  made  in  every  branch  of  the  service.  Since  the 
opening  of  the  present  administration  there  have  been  established 
3,744  new  post  offices,  delivery  by  carrier  has  been  provided  in  186 

1  Annual  Report  of  the  Postmaster  General  of  the  United  States,  1911  (Washing- 
ton, IQia),  15-17,  19,  21-22. 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  683 

additional  cities,  and  2,516  new  rural  routes,  aggregating  60,679 
miles,  have  been  authorized.  Meanwhile  the  force  of  postal  employees 
has  been  increased  by  more  than  8,000.  In  compensating  such  em- 
ployees the  department  follows  a  liberal  policy.  Last  year  the  total 
amount  expended  for  salaries  was  approximately  $14,000,000  greater 
than  two  years  ago.  The  average  annual  salary  has  been  increased 
from  $869  to  $967  for  rural  carriers,  from  $979  to  $1,082  for  post- 
office  clerks,  from  $1,021  to  $1,084  for  city  letter  carriers,  and  from 
$1,168  to  $1,183  for  railway  postal  clerks.  Thus  a  marked  exten- 
sion of  the  postal  service  and  higher  compensation  for  its  employees 
have  gone  hand  in  hand  with  a  vanishing  deficit. 

POSTAL  SAVINGS  SYSTEM 

An  important  event  of  the  year  was  the  successful  organization 
of  the  Postal  Savings  System.  On  January  3,  1911,  depositories  were 
opened  experimentally  at  a  single  post  office  in  each  one  of  the  48 
States  and  Territories.  After  a  careful  test  for  four  months  at  these 
offices  the  system  was  rapidly  extended,  and  now  comprises  practically 
all  of  the  7,500  presidential  post  offices.  Preparations  are  being  made 
to  establish  the  system  also  in  about  40,000  fourth-class  offices  that 
do  a  money-order  business.  .  .  . 

Postal  savings  deposits  have  kept  pace  with  the  extension  of  the 
system.  Amounting  at  the  end  of  the  first  month  to  only  $60,252 
in  the  48  experimental  offices,  they  increased  in  a  half  year  to  $679,310, 
and  now,  after  n  months  of  operation,  have  reached  a  total  of 
$11,000,000.  This  sum  has  been  distributed  among  2,710  national 
and  State  banks,  where  it  is  protected  by  bonds  deposited  with  the 
Treasurer  of  the  United  States. 

Assuming  that  the  Postal  Savings  System  will  be  extended  to 
additional  offices  in  accordance  with  present  plans,  and  that  with 
this  extension  the  deposits  will  continue  to  increase  at  the  same  rate 
as  now,  it  is  confidently  predicted  that  from  forty  to  fifty  million 
dollars  will  have  been  taken  in  by  the  close  of  the  current  fiscal  year. 
At  that  time  the  income  of  the  system  should  be  sufficient  to  pay  all 
operating  expenses,  including  those  incurred  at  the  central  adminis- 
trative office. 

PARCEL  POST 

Now  that  the  successful  operation  of  the  Postal  Savings  System 
is  assured,  it  is  hoped  that  Congress  will  promptly  authorize  the  estab- 
lishment of  a  parcel  post.  The  benefits  of  this  service  are  widely 


684  READINGS  IN  ECONOMIC  HISTORY 

enjoyed  by  the  people  of  foreign  countries  and  should  be  provided 
in  the  United  States.  The  department  not  only  renews  its  recom- 
mendation of  last  year  for  legislative  authority  to  start  a  parcel  post 
on  rural  routes,  but  asks  a  similar  authorization  for  the  introduction 
of  such  a  service  in  cities  and  towns  having  delivery  by  carrier.  After 
the  organization  of  a  parcel  post  on  rural  routes  and  in  the  City 
Delivery  Service  is  completed,  its  extension  to  include  railway  and 
other  transportation  lines  can  be  more  readily  accomplished  without 
impeding  the  handling  of  the  ordinary  mail.  In  establishing  a  parcel 
post  service  great  care  should  be  taken  not  to  cause  a  congestion  of 
the  mails  and  thus  embarrass  the  present  operations  of  the  post  offices. 
An  attempt  to  absorb  immediately  under  one  sweeping  order  the  entire 
parcel  business  of  the  country  would  be  a  dangerous  experiment  for 
our  postal  service.  That  the  difficulties  of  such  a  plan  may  be  avoided 
the  department  favors  a  more  gradual  introduction  of  a  parcel  post 
in  the  manner  proposed.  To  bring  the  issue  clearly  before  Congress, 
three  items  of  $50,000  each  have  been  inserted  in  the  estimates  of  the 
postal  service,  two  of  these  items  to  cover  the  initial  expense  of  intro- 
ducing a  parcel  post  on  rural  routes  and  in  the  City  Delivery  Service, 
respectively,  and  the  third  item  to  meet  the  cost  of  an  investigation 
looking  to  the  final  extension  of  the  service  to  the  railways  and  other 
transportation  lines.  If  Congress  will  grant  without  delay  the  desired 
authority  and  provide  the  necessary  appropriations  it  is  believed  that 
before  the  end  of  another  year  a  satisfactory  parcel  post  can  be  or- 
ganized on  rural  routes  and  hi  cities  with  a  carrier  service,  thus 
paving  the  way  for  the  final  step  in  the  organization  of  a  general 
parcel  post.  .  .  . 

SHIPMENT    OF    PERIODICALS    BY   FREIGHT 

Among  the  measures  adopted  by  the  department  during  the  year 
that  will  materially  reduce  the  annual  cost  of  carrying  second-class 
mail  is  that  of  shipping  monthly,  semimonthly,  and  bi-weekly  periodi- 
cals by  fast  freight.  The  plan  is  being  put  into  successful  operation 
without  serious  inconvenience  to  publishers  or  subscribers.  It  will 
not  only  result  in  a  large  saving  to  the  Government  by  utilizing  a  less 
expensive  method  of  shipment,  but  what  is  still  more  important  to 
the  business  interest  of  the  country  it  will  insure  a  quicker  handling 
of  first-class  mail.  By  taking  out  of  the  railway  post  office  cars  the 
heavy  periodical  matter  formerly  sorted  en  route  a  more  rapid  dis- 
tribution of  letters  is  made  possible.  Thus  the  new  method  of  ship- 
ping certain  periodicals  will  mean  greater  efficiency  in  the  handling 


COMMERCE,  TRANSPORTATION,   AND   COMMUNICATION  685 

of  a  class  of  mail  that  is  far  more  important  to  the  public.  The 
saving  from  the  new  plan  when  in  full  operation  will  amount  to  several 
million  dollars  a  year.  .  .  . 

CITY  DELIVERY   SERVICE 

Important  changes  were  also  made  during  the  year  in  the  city 
carrier  service.  A  reduction  in  the  number  of  deliveries  for  the  resi- 
dential districts  of  certain  cities  resulted  in  some  misapprehension 
as  to  the  purposes  of  the  department.  In  each  case  the  object  was 
to  permit  the  redistribution  of  the  carrier  service  so  as  to  make  it 
more  effective  as  a  whole.  The  curtailment  of  too  frequent  deliveries 
in  residential  sections  enabled  the  department  to  provide  more  de- 
liveries in  business  districts.  This  policy  is  almost  universally 
approved  by  business  men,  who  are  willing  to  have  fewer  deliveries 
at  their  residences  in  order  to  obtain  more  frequent  service  at  their 
places  of  business.  As  already  pointed  out,  the  city  delivery  service 
has  been  greatly  extended  in  the  last  two  years,  during  which 
period  letter  carriers  have  been  placed  on  duty  for  the  first  time 
in  1 86  additional  cities. 

VILLAGE  DELIVERY   SERVICE 

Delivery  by  letter  carrier,  except  on  rural  routes,  is  confined  under 
existing  law  to  cities  and  towns  having  as  much  as  10,000  population 
or  annual  post-office  receipts  amounting  to  $10,000  or  more.  Thus 
the  residents  of  many  small  towns  and  villages  are  obliged  to  go  to 
the  post  offices  for  their  mail,  while  delivery  service  by  carrier  is 
afforded  both  to  the  inhabitants  of  cities  and  to  people  residing  along 
the  rural  routes  in  sparsely  settled  country  districts.  The  carrier 
delivery  system  is  now  in  operation  in  1,541  cities,  serving  an  urban 
population  of  about  45,000,000,  while  rural  carriers  deliver  mail  on 
42,000  routes  that  reach  about  20,000,000  people.  This  leaves  about 
25,000,000  people  in  the  United  States,  most  of  whom  live  in  small 
towns  and  villages,  without  any  form  of  mail  delivery.  The  estab- 
lishment of  such  a  service  in  these  towns  and  villages  under  the  present 
law  governing  the  employment  and  compensation  of  city  letter 
carriers  would  be  hardly  feasible  because  of  the  heavy  expense  in- 
volved. It  is  believed,  however,  that  in  many  villages  not  now 
entitled  to  free  delivery  a  comparatively  small  allowance  would 
enable  the  postmasters  to  employ  the  assistance  necessary  to  carry 
mail  to  the  residences.  . 


686  READINGS  IN  ECONOMIC  HISTORY 

RURAL   MAIL   SERVICE 

The  consolidation  of  the  rural  delivery  and  star-route  services, 
.  .  .  has  proved  to  be  most  beneficial.  It  has  enabled  the  department 
to  extend  mail  delivery  to  many  thousands  of  additional  patrons  by 
a  rearrangement  of  established  routes  with  little  increase  in  the  annual 
rate  of  expenditure.  Much  needless  duplication  of  service,  which  it 
was  difficult  to  prevent  with  two  independent  systems  of  rural 
delivery,  has  been  eliminated  since  their  consolidation.  Under  tne 
new  plan  of  organization  the  rural  mail  service  is  being  rapidly  ex- 
tended. 


CHAPTER  XX 

FINANCIAL  HISTORY,  MONEY  AND  BANKING 

1860-1915 

I.   FINANCING  THE  WAR 

A.   Extent  and  Character  of  Government  Receipts  and 
Expenditures,  1860  1 

The  receipts  and  expenditures  of  the  government  at  the  outbreak  of  the 
Civil  War  were  meager  as  compared  to  those  during  the  war  period.  Thus 
receipts  for  the  fiscal  year  1860  approximated  $80,000,000,  and  expenditures 
were  only  a  little  less.  The  public  debt,  which  was  something  like  $70,000,000, 
carried  an  interest  charge  of  about  eleven  cents  per  capita.  The  government 
had  but  one  important  source  of  revenue,  the  tariff.  A  detailed  statement  of 
both  receipts  and  expenditures  follows: 

TREASURY  DEPARTMENT, 
December,  4,  1860. 

SIR:  In  compliance  with  the  act  of  Congress  entitled  "An  act 
supplementary  to  an  act  to  establish  the  Treasury  Department," 
approved  May  10,  1800,  I  have  the  honor  to  submit  the  following 
report: 

On  the  first  day  of  July,  1859,  being  the  commencement  of  the 

fiscal  year  1860,  the  balance  in  the  treasury  was $4)339)275-54 

The  receipts  into  the  treasury  during  the  fiscal  year  1860  were  as 
follows: 

For  the  quarter  ending  September  30,  1859: 

From  customs $15,947,670.62 

From  public  lands 470,244.62 

From  miscellaneous  sources 379,650.61 

From  treasury  notes,  per  act   December  23, 

1857 3,611,300.00 

From  loan,  per  act  June  14,1858 210,000.00       20,618,865.85 


Treasury  Report,  1860  (Washington,  1860),  3-4,  6-7. 


688 


READINGS  IN  ECONOMIC  HISTORY 


For  the  quarter  ending  December  31,  1859: 

From  customs 10,785,849.93 

From  public  lands 445,535-36 

From  miscellaneous  sources 149,392.76 

From  treasury  notes,  per  act  December  23, 

1857 4,064,500.00 

From  loan,  per  act  June  14,  1858 60,000.00       15,505,278.05 

For  the  quarter  ending  March  31,  1860: 

From  customs 14,962,783.68 

From  public  lands 505,591.83 

From  miscellaneous  sources 245,447.36 

From  treasury  notes,  per  act  December  23, 

1857 5,588,200.00 

From  loan,  per  act  June  14,1858 1,110,000.00       22,412,022.87 

For  the  quarter  ending  June  30,  1860: 

From  customs 11,491,207.64 

From  public  lands 357,185.90 

From  miscellaneous  sources 236,273.58 

From  treasury  notes,  per  act  December  23, 

1857 6,131,200.00       18,215,867.12 

Making  the  aggregate  means  for  the  service  of  the  fiscal  year 

ending  June  30,  1860 81,091,309.43 

The  expenditures  during  the  fiscal  year  ending  June  30,   1860, 
were  as  follows: 

For  the  quarter  ending  September  30,  1859 20,007,174.76 

For  the  quarter  ending  December  31,  1859 16,025,526.69 

For  the  quarter  ending  March  31,  1860 20,377,502.70 

For  the  quarter  ending  June  30,  i860 21,051,898.57 

77,462,102.72 

Which  amount  was  applied  to  the  respective  branches  of  the 
public  service  as  follows: 

To  civil,  foreign  intercourse,  and  miscellaneous  services 27,969,870.84 

To  service  of  Interior  Department  (Indians  and  pensions) 3,955,686.59 

To  service  of  War  Department 16,409,767.10 

To  service  of  Navy  Department 11,513,150.19 

•To  the  public  debt '.  17,613,628.00 

77,462,102.72 


FINANCIAL  HISTORY,   MONEY   AND   BANKING         689 

Estimates  for  the  fiscal  year  from  ist  July,  1861,  to  jotk  June,  1862. 

Estimated  receipts  from  customs $60,000,000.00 

Estimated  receipts  from  public  lands 3,000,000.00 

Estimated  receipts  from  miscellaneous  sources 1,250,000.00 

Estimated  balance  in  treasury  on  ist  July,  1861 245,891.58 


Aggregate  estimated  means  for  fiscal  year  1862 64,495,891.58 


Estimated  expenditures  from  permanent  appropriations 9,626,386.20 

Estimated  expenditures  from  balance  of  former  appropriations 

not  before  required 12,198,112.62 

Estimates  now  submitted  by  the  executive  departments  for 

appropriation  by  Congress 46,539,227.29 


Aggregate  estimated  expenditures  for  fiscal  year  1862 68,363,726.11 

Showing  a  deficit  of  estimated  means  for  the  service  of  the  fiscal 
year  ending  3oth  June,  1862,  of 3,867,834.53 


The  suggestions  above  made,  as  to  not  drawing  from  the  treasury 
during  the  year  the  whole  amount  of  the  appropriations  authorized 
by  law,  will  apply  to  these  estimates,  so  that  instead  of  the  above 
deficiency  of  $3,867,834.53,  there  will  probably  remain  [in]  the  trea- 
sury on  the  ist  July,  1862,  a  balance  of  about  $8,000,000. 

B.   Money  Cost  of  the  Civil  War,  1869  1 

The  money  cost  of  the  Civil  War  was  stupendous  in  its  magnitude,  so 
much  so  that  few  if  any  of  the  public  men  of  the  time  would  have'  believed 
at  the  beginning  of  the  conflict  that  such  a  cost  would  have  been  borne  by  the 
people.  It  was  borne,  however,  with  little  apparent  difficulty  and  without 
much  complaint,  for  the  north  prospered  in  spite  of  the  War.  The  million  or 
more  northerners  in  the  field  required  immense  quantities  of  food  and  equip- 
ment, and  their  places  had  been  taken  by  improved  machinery.  The  money 
cost  of  the  war  was  reported  on  in  1869  by  the  Special  Commissioner  of  the 
Revenue,  David  A.  Wells,  as  follows: 

It  would  seem  to  be  desirable  at  this  point,  now  that  all  feeling  in 
regard  to  the  subject  from  its  bearing  on  political  questions  has  appar- 
ently passed  away,  to  place  upon  record  the  exact  cost  of  the  war, 
as  nearly  as  the  same  can  be  determined.  With  this  object,  attention 
is  asked  to  the  following  exhibit: 

The  amount  of  outstanding  national  indebtedness  March  7, 

1861,  was $76,455,299.28 


1  Report  of  the  Special  Commissioner  of  the  Revenue,  1869  (Washington,  1870), 
IV-VI. 


690  READINGS  IN  ECONOMIC  HISTORY 

During  the  four  years  of  war  which  terminated  in  April,  1865, 
(April  i,  1 86 1,  to  April  i,  1865,)  the  actual  receipts  of  the  treasury 
were  as  follows: 

From  internal  revenue $314,337,317.01 

From  customs 280,861,618.45 

From  lands 1,812,083.80 

From  direct  tax 4,668,259.31 

From  miscellaneous  sources 74,120,413.37 


Total  receipts 675,799,691.94 


The  receipts  of  revenue  from  April  i,  1865,  to  June  30,  1869, 
inclusive,  during  which  period  the  larger  portion  of  the  expenditures 
has  been  directly  in  consequence  of  the  war,  were  as  follows : 

From  internal  revenue $967,207,221.41 

From  customs 729,991,875.97 

From  lands 7,402,188.28 

From  direct  tax 9,017,217.30 

From  miscellaneous  sources 194,949,122.13 


Total  receipts $1,908,567,625.09 


The  amount  of  outstanding  indebtedness,  less  cash  and  sink- 
ing fund  in  treasury,  June  30,  1869,  was $2,489,002,480.58 

Deducting  from  this  the  amount  of  outstanding  indebted- 
ness'at  the  outbreak  of  the  war  ($76,455,299.28,)  we  have, 
as  the  sum  borrowed  for  war  purposes  and  not  repaid  out 
of  the  receipts  above  indicated 2,412,547,181.30 


Making  the  total  expenditure  (loans  and  receipts)  in  eight 

and  a  quarter  years  of  war  and  its  effects 4,996,914,498.33 

Deducting  the  amount  which,  but  for  the  war,  might  be 
taken  as  the  average  expenditure  of  the  government  during 
this  period,  say  one  hundred  millions  per  annum 825,000,000.00 


We  shall  have $4,171,914,498.33 


which  sum  represents  the  cost  of  the  war  to  the  United  States  gov- 
ernment down  to  June  30,  1869. 

To  this  sum  should  be  added  the  value  of  the  pensions  now  paid 
by  the  Government  on  account  of  the  war,  if  the  same  were  capitalized. 
This,  at  eight  years'  purchase  of  the  present  annual  payment,  would 
amount  to  about  two  hundred  millions. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         691 

But  this  aggregate,  however  large,  must  still  further  be  increased 
by  other  items  if  we  would  reach  the  true  cost  of  the  war  to  us  as  a 
people,  the  above  representing  only  the  expenditures  of  the  national 
government. 

These  additional  charges  are  substantially  as  follows: 

Increase  of  State  debts,  mainly  on  war  account $123,000,000 

County,  city,  and  town  indebtedness  increased  on  account  of  the 
war,  (estimated) 200,000,000 

Expenditures  of  States,  counties,  cities,  and  towns,  on  account 
of  the  war,  not  represented  by  funded  debt,  (estimated) 600,000,000 

Estimated  loss  to  the  loyal  States  from  the  diversion  and  suspen- 
sion of  industry,  and  the  reduction  of  the  American  marine  and 
carrying  trade 1,200,000,000 

Estimated  direct  expenditures  and  loss  of  property  by  the  Con- 
federate States  by  reason  of  the  war 2,700,000,000 

These  estimates,  which  are  believed  to  be  moderate  and  reasonable, 
show  an  aggregate  destruction  of  wealth,  or  diversion  of  industry 
which  would  have  produced  wealth,  in  the  United  States  since  1861, 
approximating  nine  thousand  millions  of  dollars  —  a  sum  nominally 
in  excess  of  the  entire  increase  of  wealth,  as  returned  by  the  census, 
for  the  whole  country  from  1850  to  1860. 

II.   THE  GREENBACKS 

A.     Quantity  and  Nature  of  the  Greenback  Issues,  1864  1 

One  of  the  methods  adopted  by  Congress  for  raising  war  revenue  was  the 
issuing  of  United  States  notes,  popularly  known  as  greenbacks.  The  total 
amount  authorized  was  $450,000,000.  These  notes  displaced  coins  as  a  circu- 
lating medium  and  caused  a  rise  in  prices  as  measured  in  the  greenbacks  them- 
selves. In  other  words  the  value  of  the  notes  fell  measured  in  gold.  Because 
of  their  effect  on  prices  and  on  the  circulation  of  gold,  many  persons  have 
criticized  Congress  for  authorizing  them.  An  official  account  of  the  greenback 
situation  was  given  in  1864  as  follows: 

The  necessities  of  the  treasury  were,  however,  immediate.  To 
raise  money  in  large  amounts  by  taxation,  and  even  by  loans,  requires 
more  time  than  can  always  be  afforded  with  large  armies  in  the  field 
and  great  navies  afloat.  The  demands  of  war  are  imperative,  and 
cannot  await  the  slow  process  of  financial  negotiations.  To  meet 
a  demand  thus  urgent,  Congress,  by  acts  of  February  25  and  July  n, 
1862,  saw  fit  to  authorize  the  emission  of  United  States  notes  to  the 
amount,  including  sixty  millions  of  treasury  notes  previously  author- 

1  Treasury  Report,  1864  (Washington,  1864),  3- 


692  READINGS  IN  'ECONOMIC  HISTORY 

ized,  which  were  to  be  redeemed  and  cancelled,  of  three  hundred 
millions  of  dollars,  as  a  substitute  for  coin,  declaring  them  a  legal 
tender  for  debts,  public  and  private,  and  clothing  them  with  all  the 
requisites  of  currency.  These  notes  were  convertible,  at  the  will  of 
the  holder,  into  bonds  of  the  United  States,  paying  interest  at  six 
per  centum,  semi-annually,  in  coin,  to  secure  which  the  revenue  from 
customs,  also  payable  in  coin,  was  specifically  pledged.  The  same 
act  of  February  25,  1862,  authorized  the  issue  of  bonds  to  the  amount 
of  five  hundred  millions,  increased  subsequently  to  five  hundred  and 
eleven  millions,  redeemable  after  five  years  and  payable  in  twenty 
years  from  date. 

Notwithstanding  the  ample  provision  supposed  to  be  made  by 
Congress  for  the  expenditures  of  the  fiscal  year  ending  on  the  3oth 
of  June,  1863,  the  report  of  the  Secretary,  submitted  on  the  4th  of 
December,  1862,  showed  a  deficiency  for  the  current  year  of  $276,- 
912,517.66;  while  the  estimated  amount  of  expenditures  over  receipts 
from  ordinary  sources  for  the  succeeding  year  was  $622,388,186.56. 
To  provide  for  the  aggregate  of  these  amounts,  Congress,  by  an  act 
approved  March  3,  1863,  authorized  a  loan  of  three  hundred  millions 
for  the  then  current,  and  of  six  hundred  millions  for  the  then  next, 
fiscal  year.  By  the  second  section  of  the  same  act  the  Secretary  was 
authorized  to  issue,  as  a  part  of  said  loan,  four  hundred  millions  in 
amount  of  treasury  notes,  bearing  interest  at  a  rate  not  exceeding 
six  per  centum  per  annum,  payable  in  lawful  money,  which  notes, 
payable  at  periods  expressed  on  their  face,  might  be  made  a  legal 
tender  at  their  face  value.  By  the  third  section,  one  hundred  and 
fifty  millions  in  amount  of  United  States  notes,  of  a  like  character  with 
those  previously  issued  under  the  provisions  of  former  acts,  were 
authorized  as  a  part  of  said  loan. 

It  will  be  seen  that,  by  the  several  acts  of  Congress  referred  to, 
government  paper,  as  a  substitute  for  coin,  under  the  respective 
designations  of  United  States  notes  and  treasury  notes,  might  be  issued 
to  the  amount  of  eight  hundred  and  fifty  millions  of  dollars,  viz.: 
United  States  notes,  not  bearing  interest,  to  the  amount  of  four 
hundred  and  fifty  millions,  but  of  which  fifty  millions  were  to  be  held 
in  reserve  for  the  redemption  of  temporary  deposits,  and  to  be  replaced 
as  soon  as  possible,  thus  leaving  the  whole  amount  intended  for  cir- 
culation but  four  hundred  millions;  and  four  hundred  millions  of 
treasury  notes,  bearing  interest,  and  which  it  was  hoped  and  believed 
would  not  remain  in  circulation,  as  they  could  be  made  a  legal  tender 
only  for  their  face  value,  without  interest. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         693 

B.    The  Greenback  Situation  as  Seen  by  an  Englishman,  1865  l 

Mr.  Goldwin  Smith,  an  eminent  English  historian,  who  spent  many  years 
as  a  teacher  in  an  American  university,  made  public  in  1865  his  views  on  the 
relation  of  the  greenbacks  to  business.  Mr.  Smith  freely  criticized  the  finan- 
cial policy  of  the  government  and  pointed  out  its  deadening  effects  on  the 
country's  business.  He  predicted  nothing  less  than  financial  disaster  unless  the 
situation  should  improve.  The  most  repulsive  feature  of  the  various  laws  under 
which  the  greenbacks  had  been  issued  had  to  do  with  the  legal  tender  clause. 
His  criticisms  and  views  follow: 

I  went  to  America,  convinced  that,  amidst  so  much  that  was  truly 
great,  the  financial  administration  was  the  weak  point;  and  I  have  re- 
turned with  that  conviction  terribly  confirmed.  The  root  of  the  mischief, 
I  venture  to  think,  is  the  Legal  Tender  Act. 

That  measure  not  only  subverted  the  faith  of  private  contracts, 
but  lowered  the  public  credit,  and  is  doubling  the  eventual  burdens 
of  the  country.  It  was  popular  with  the  debtor  interest,  because  it 
enabled  the  debtor  to  deprive  his  creditor  of  half  the  debt;  and  the 
debtor  interest  included  a  large  number  of  the  farmers,  either  as  mort- 
gagors or  as  purchasers  of  land  for  which  the  full  price  had  not  been 
paid.  It  has  subjected  persons  living  on  fixed  incomes,  who  for  the 
most  part  are  politically  weak  and  submissive,  to  a  confiscation  of 
half  their  means  of  subsistence.  It  has  deranged  prices  to  such  an 
extent,  that  when  I  was  in  Illinois  the  wages  of  a  skilled  mechanic 
equalled  the  salary  fixed  by  the  constitution  for  a  judge;  and  it  has 
thereby  multiplied  strikes,  and  introduced  into  industrial  relations 
a  malady  which  will  not  easily  be  expelled.  It  has  filled  trade  with 
confusion  and  almost  annihilated  credit;  and  if  it  has  thus  indirectly 
put  a  stop  to  a  certain  amount  of  gambling  speculation,  it  has  created 
a  speculation  in  gold  more  gambling  than  anything  to  which  it  has 
put  a  stop.  But  its  worst  effects,  and  those  which  will  be  longest 
felt,  are  the  effects  produced  upon  national  credit  and  commercial 
morality  by  every  act  of  questionable  legislation. 

From  the  Legal  Tender  Act  it  was  but  a  natural  step  to  the  pro- 
posal made  by  a  member  of  the  Finance  Committee,  in  unconscious 
imitation  of  the  Reign  of  Terror,  for  forcing  greenbacks  up  to  par  by 
penal  legislation. 

The  advocates  of  the  Legal  Tender  Act  are  loud  in  their  praises 
of  a  national  paper  currency.  But  the  Legal  Tender  Act  and  a 
national  paper  currency  are,  as  a  single  glance  at  the  financial  facts 
of  Europe  might  show,  quite  distinct  things;  having  no  necessary 

1  Bankers'  Magazine  (New  York,  1864-5),  XIX,  901-3. 


694  READINGS  IN  ECONOMIC  HISTORY 

connection  with  each  other.  And  it  is  to  be  remembered  that  the 
smash  of  a  local  "wild-cat  bank"  is,  at  worst,  a  local  evil;  whereas,  if 
the  national  exchequer  becomes  a  "wild-cat  bank,"  and  smashes, 
the  evil  will  be  universal. 

Within  no  long  time  it  will  be  confessed  that  the  Legal  Tender 
Act  was  the  most  wasteful,  as  well  as  the  most  unfair  in  its  incidence, 
of  all  imaginable  systems  of  taxation. 

If  you  touch  upon  the  subject  in  America,  the  common  answer  is, 
"You  cannot  talk;  you  suspended  specie  payments  and  made  bank 
notes  a  legal  tender  yourselves."  Satisfied  as  they  are  apt  to  be  with 
this  retort,  Americans  do  not  inquire  what  were  the  economical  and 
financial  effects,  immediate  and  ultimate,  of  a  measure  which,  although 
anterior  to  the  general  diffusion  of  knowledge  on  economical  subjects, 
was  opposed  by  the  most  enlightened  and  upright  economists  of  the 
time.  Nor  do  they  reflect  that  as  our  war  was  waged  to  a  great  extent 
abroad,  and  by  means  of  subsidies  to  foreign  powers,  it  was  necessarily 
carried  on  partly  in  gold. 

The  melancholy  part  of  the  matter  is,  that  the  people  demanded 
nothing  of  this  kind.  The  people  were  ready  for  a  sound  and  vigorous 
system  of  taxation,  which  would  have  sustained  the  public  credit, 
and  enabled  the  government  to  borrow  what  it  needed  in  gold  at  a 
reasonable  rate.  In  this  and  in  other  matters  the  people  are  leagues 
in  advance  of  the  politicians,  who,  bred  under  an  evil  system,  are  the 
last  to  feel  the  influence  of  a  great  national  regeneration.  The  Ameri- 
can nation  is  a  gallant  horse,  if  it  had  but  a  more  gallant  rider. 

Americans  have  hitherto  lived  in  blessed  ignorance  of  taxation  and 
finance.  The  consequence  is  a  state  of  mind  upon  economical  and 
financial  subjects  —  not  among  the  great  merchants  and  chiefs  of 
industry,  who  are,  of  course,  most  intelligent,  but  among  the  poli- 
ticians and  the  mass  of  even  educated  men  —  which  your  correspond- 
ent terms  "empirical,"  and  which  he  justly  says  is  passing  from  em- 
piricism into  science  by  a  somewhat  expensive  process.  No  fallacy 
(in  European  estimation)  is  too  exploded,  no  fancy  too  chimerical, 
to  find  acceptance  and  do  mischief.  The  vague  notion  prevails 
that  America,  shooting  ahead  of  the  timid  finance  of  the  Old  World, 
has  triumphantly  dispensed  with  a  specie  currency,  though  the  green- 
back bears  upon  its  face  the  flattering  promise  to  pay  specie,  from 
which  it  manifestly  derives  its  whole  value.  Strange  theories,  tend- 
ing in  the  same  direction,  began  to  grow  out  of  the  fact  that,  from 
causes  of  which  a  very  simple  account  may  be  given,  real  property 
did  not  at  first  rise  in  price  like  other  articles  of  commerce.  The 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         695 

highest  financial  authorities,  if  I  am  rightly  informed,  were  convinced 
that  the  fluctuations  in  the  value  of  the  paper  currency  were  caused 
merely  by  a  sort  of  conflict  between  the  currents  of  national  and  local 
notes,  the  variations  of  which  must  have  appeared  to  them  to  coincide 
curiously  with  those  of  military  and  political  events.  The  President 
himself  is  generally  supposed  to  be  the  author  of  the  plan  for  issuing  a 
description  of  stock  not  liable  to  seizure  for  debt,  which  would  produce 
some  moral  as  well  as  economical  phenomena  of  an  interesting  kind. 

The  buried  arguments  of  our  protectionists  have  risen  again  in 
the  New  World;  and  the  Americans,  I  fear,  are  in  the  minority,  who 
do  not  believe  that,  by  forcing  capital  and  industry  from  the  more 
remunerative  to  the  less  remunerative  employment,  a  patriotic  legis- 
lator may  increase  the  national  wealth.  If  misgivings  arise,  there  is 
a  ready  appeal  to  the  "boundless  resources"  of  the  country,  as  though 
untilled  land  and  unwrought  minerals,  the  possible  elements  of  future 
opulence,  could  satisfy  the  immediate  demands  of  the  public  creditor; 
as  though  they  were  anything  more  than  natural  powers,  as  valueless 
in  themselves  as  water  or  air,  and  dependent  for  their  ultimate  value, 
in  this  case,  on  the  influx  of  emigrant  labor  (which  unsound  eco- 
nomical measures,  by  raising  the  cost  of  living,  will  exclude)  and  the 
opening  of  internal  lines  of  communication.  In  the  last  resort  the 
American  reminds  the  objector  that  America  is  a  new  country,  though 
by  what  new  laws  of  economy  and  finance  it  is  governed,  he  would  prob- 
ably be  at  a  loss  to  say.  ADAM  SMITH  and  the  great  European  econo- 
mists are  little  read;  what  is  read  in  their  place  I  forbear  to  describe. 

These  are  disagreeable  reflections.  But  the  public  liabilities, 
claims  for  compensation  included,  must  be  approaching  three  thousand 
millions  of  dollars;  and  the  tax-paying  spirit,  which  is  now  so  high 
that  during  the  three  months  I  passed  in  the  country  I  hardly  ever 
heard  a  murmur,  even  from  those  who  were  most  severely  and  unfairly 
taxed,  will  sink  when  the  excitement  of  the  war  is  at  an  end,  while  a 
conflict  between  different  districts  and  interests,  each  trying  to  shift 
the  burden  to  the  other,  will  too  probably  ensue.  At  present  the 
patriotism  of  the  nation,  its  marvelous  industry,  the  immensity  of 
its  real  wealth,  its  intelligent  fidelity  to  the  government  of  its  choice, 
and  readiness  to  support  all  honest  endeavors  for  the  public  good, 
would  most  likely  enable  a  really  strong  man  to  return  to  a  sounder 
system,  and  avert  imminent  disaster.  But,  unless  a  strong  man 
soon  appears,  all  that  can  be  said,  I  fear,  is  that  the  Americans  will 
bear  a  financial  catastrophe  better,  and  recover  from  it  more  speedily, 
than  any  other  nation. 


696  READINGS  IN  ECONOMIC  HISTORY 

C.   Fluctuations  in  the  Value  of  Greenbacks,  1864-1878  l 

Soon  after  the  greenbacks  were  issued  their  value,  measured  in  gold,  began 
to  decline.  From  that  time  until  the  resumption  of  specie  payments  they  con- 
tinued to  be  worth  less  than  gold.  A  general  view  of  this  depreciation  as 
reported  by  the  Comptroller  of  the  Currency  follows: 

Since  1863  the  measure  of  value  has  been  subject  to  such  frequent 
changes  that  business  men,  no  matter  how  careful  their  calculations 
or  prudent  their  arrangements,  have  been  continually  deceived  by  the 
false  regulator  which  measures  every  transaction.  If  any  single  day 
is  selected,  for  the  purpose  of  comparison,  from  the  business  days  of 
each'  of  the  last  sixteen  years,  the  measure  of  value  will  be  found  to 
have  been  as  variable  as  the  thermometer.  This  will  be  clearly  seen 
in'  the  following  table,  which  gives  the  value,  in  standard  gold  coin, 
of  the  legal-tender  paper  dollar  on  July  i  of  each  year  from  1864  to 
1878,  and  also  its  value  on  November  18  of  the  present  year: 


1864 
Cts. 

1865 
Cts. 

1866 
Ctt. 

1867 
Cts. 

1868 

Cts. 

1869 
Cts. 

1870 
Cts. 

1871 
Cts. 

38.7 

70.4 

66.0 

71.7 

70.1 

73-5 

85.6 

89.0 

1872 
Cts. 

1873 
Cts. 

1874 
Cts. 

1875 
Ct$. 

1876 

Cts. 

1877 
Cts. 

1878 
Cts. 

1878 
Cts. 

87.5 

86.4 

91.0 

87.2 

89.2 

94-5 

99-4 

99-8 

In  1864  the  value  both  of  the  Treasury  note  and  the  national-bank 
note  was  less  than  thirty-nine  cents  to  the  dollar.  They  are  now  alike 
worth  ninety-nine  and  eighty-seven  hundredths  cents.  It  is  within 
the  province  of  the  present  Congress  to  discountenance  henceforth 
in  this  country  the  use  of  a  false  and  fluctuating  measure  of  value, 
and  to  insure  in  its  stead  the  use  of  a  measure  which  is  everywhere 
recognized  as  honest  and  true.  .  .  . 

D.   Resumption  of  Specie  Payments,  1879  2 

A  law  of  1875  provided  for  the  resumption  of  specie  payments,  on  January  i, 
1879.  To  this  end  the  Secretary  of  the  Treasury  collected  a  large  supply  of 
gold  with  which  to  redeem  the  greenbacks  on  demand.  Mr.  John  Sherman, 
who  was  the  Secretary  of  the  Treasury  when  resumption  took  place,  has 
described  the  event  as  follows: 

At  the  date  of  my  last  annual  report,  December  2, 1878,  the  prepa- 
ration for  the  resumption  of  specie  payments,  provided  for  by  the 

1  Report  of  the  Comptroller  of  the  Currency,  1878  (Washington,  1878),  25-6. 
*  Treasury  Report,  1879  (Washington,  1879),  ix-xii. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         697 

act  approved  January  14, 1875,  had  been  substantially  completed.  On 
the  ist  day  of  January,  1879,  the  day  fixed  for  the  resumption  of  specie 
payments,  the  reserve  of  coin,  over  and  above  all  matured  liabilities, 
was  $133,508,804.50. 

Previous  to  that  time,  in  view  of  resumption,  United  States  notes 
and  coin  were  freely  received  and  paid  in  private  business  as  equiv- 
alents. Actual  resumption  commenced  at  the  time  fixed  by  law, 
without  any  material  demand  for  coin  and  without  disturbance  to 
public  or  private  business.  No  distinction  has  been  made  since 
that  time  between  coin  and  United  States  notes  in  the  collection  of 
duties  or  in  the  payment  of  the  principal  or  interest  of  the  public 
debt.  The  great  body  of  coin  indebtedness  has  been  paid  in  United 
States  notes  at  the  request  of  the  creditors.  The  total  amount  of 
United  States  notes  presented  for  redemption  from  January  T  to 
November  i,  1879,  was  $11,256,678.  But  little  coin  has  been  de- 
manded on  the  coin  liabilities  of  the  Government  during  the  same 
period,  though  the  amount  accruing  exceeded  $600,000,000.  Mean- 
time coin  was  freely  paid  into  the  Treasury,  and  gold  bullion  was 
deposited  in  the  assay  office  and  paid  for  in  United  States  notes.  The 
aggregate  gold  and  silver  coin  and  bullion  in  the  Treasury  increased, 
during  that  period,  from  $167,558,734.19  to  $225,133,558.72,  and  the 
net  balance  available  for  resumption  increased  from  $133,508,804.50 
to  $152,737,155.48. 

In  accordance  with  the  position  taken  in  the  last  annual  report, 
United  States  notes  have  been  received,  since  January  i,  last,  in  pay- 
ment of  duties  on  imports. 

To  meet  the  local  demand  for  coin,  in  places  other  than  New  York 
City,  persons  applying  have  been  paid  silver  coin  for  United  States 
notes,  the  coin  being  delivered  to  them  on  established  express-lines 
free  of  expense :  and  for  some  time  gold  and  silver  coin  has  been  freely 
paid  out  at  the  several  subtreasuries  upon  current  obligations  of  the 
Government.  There  has  been,  however,  but  little  demand  for  coin, 
and  United  States  notes  and  the  circulating-notes  of  national  banks 
have  been  received  and  paid  out  at  par  with  coin  in  all  business  trans- 
actions, public  or  private,  in  all  parts  of  the  country. 

The  specie  standard,  thus  happily  secured,  has  given  an  impetus 
to  all  kinds  of  business.  Many  industries,  greatly  depressed 
since  the  panic  of  1873,  have  revived,  while  increased  activity 
has  been  shown  in  all  branches  of  production,  trade,  and  com- 
merce. Every  preparation  for  resumption  was  accompanied 
with  increased  business  and  confidence,  and  its  consummation  has 


698  READINGS  IN  ECONOMIC  HISTORY 

been  followed  by  a  revival  of  productive  industry  unexampled  in 
our  previous  history. 

It  is  made  the  duty  of  this  Department  to  maintain  resumption, 
and  for  this  purpose,  in  addition  to  the  use  of  surplus  revenue  and  the 
fund  for  resumption  purposes,  the  Secretary  is  authorized  to  issue, 
sell,  and  dispose  of,  at  not  less  than  par  in  coin,  either  four,  four  and 
a  half,  or  five  per  cent,  bonds  of  the  description  set  out  in  the  refund- 
ing act,  approved  July  14,  1870.  This  act  is  based  upon  the  idea 
that  all  necessary  expenditures  of  the  Government  appropriated  for 
by  Congress,  will  be  met  by  the  current  revenues,  leaving  the  surplus 
revenues  and  the  reserve-fund  available  for  resumption.  It  is  also 
provided  by  that  act  that  the  amount  of  United  States  notes  to  be 
redeemable  on  demand  in  coin  shall  be  gradually  reduced  to  the  sum 
of  $300,000,000.  The  act  approved  May  31,  1878,  increases  the  maxi- 
mum of  United  States  notes,  upon  which  resumption  is  to  be  main- 
tained, to  the  sum  of  $346,681,016,  the  amount  outstanding  at  the 
date  of  the  passage  of  the  act.  It  also  provides  as  follows: 

"And  when  any  of  said  notes  may  be  redeemed  or  be  received  into 
the  Treasury  under  any  law  from  any  source  whatever  and  shall  belong 
to  the  United  States,  they  shall  not  be  retired  cancelled  or  destroyed, 
but  they  shall  be  reissued  and  paid  out  again  and  kept  in  cir- 
culation.". .  . 

The  great  convenience  and  easy  transportation  of  notes  has  thus 
far  enabled  the  Treasury  to  exchange  them  for  coin  or  bullion  at  all 
the  centers  of  production  of  gold  and  silver  in  this  country,  and  also 
to  pay  for  large  sums  of  foreign  coin  at  the  assay  office  in  New  York 
without  any  material  draft  on  the  resumption  fund ;  and  it  is  believed 
that  this  voluntary  exchange  will,  in  ordinary  times,  furnish  the  Treas- 
ury with  all  the  com  necessary.  It  would  be  only  in  an  emergency 
not  easy  to  foresee,  and  not  likely  to  arise,  that  the  power  to  sell 
bonds  for  resumption  purposes  would  be  exercised,  but  it  should  be 
preserved  to  meet  any  extraordinary  demand  for  the  redemption  of 
notes  which  might  possibly  occur. 

The  Secretary  is,  therefore,  of  opinion  that  the  provisions  of  exist- 
ing law  are  ample  to  enable  the  Department  to  maintain  resumption 
even  upon  the  present  volume  of  United  States  notes.  In  view,  how- 
ever, of  the  large  inflow  of  gold  into  the  country  and  the  high  price  of 
public  securities,  it  would  seem  to  be  a  favourable  time  to  invest  a  por- 
tion of  the  sinking  fund  in  United  States  notes,  to  be  retired  and  can- 
celed, and  in  this  way  gradually  to  reduce  the  maximum  of  such  notes 
to  the  sum  of  $300,000,000,  the  amount  fixed  by  the  resumption  act. 


FINANCIAL  HISTORY,   MONEY  AND  BANKING         699 

The  Secretary  respectfully  calls  the  attention  of  Congress  to  the 
question  whether  United  States  notes  ought  still  to  be  a  legal- tender 
in  the  payment  of  debts.  The  power  of  Congress  to  make  them  such 
was  asserted  by  Congress  during  the  war,  and  was  upheld  by  the 
Supreme  Court.  The  power  to  reissue  them  in  time  of  peace,  after 
they  are  once  redeemed,  is  still  contested  in  that  court.  Prior  to 
1862,  only  gold  and  silver  were  a  legal- tender.  Bullion  was  deposited 
by  private  individuals  in  the  mints  and  coined  in  convenient  forms 
and  designs,  indicating  weight  and  fineness.  Paper  money  is  a  prom- 
ise to  pay  such  coin.  No  constitutional  objection  is  raised  against 
the  issue  of  notes  not  bearing  interest  to  be  used  as  a  part  of  the  cir- 
culating medium. 

The  chief  objection  to  the  emission  of  paper  money  by  the  Govern- 
ment grows  out  of  the  legal-tender  clause,  for  without  this  the  United 
States  note  would  be  measured  by  its  convenience  in  use,  its  safety, 
and  its  prompt  redemption.  In  war,  and  during  a  grave  public 
exigency,  other  considerations  may  properly  prevail;  but  it  would 
seem  that  during  peace,  and,  especially,  during  times  of  prosperity 
and  surplus  revenue,  the  promissory  note  of  the  United  States  ought 
to  stand  like  any  other  promissory  note.  It  should  be  current  money 
only  by  being  promptly  redeemed  in  coin  on  demand.  The  note 
of  the  United  States  is  now  received  for  all  public  dues,  it  is  carefully 
limited  in  amount,  it  is  promptly  redeemed  on  demand,  and  ample 
reserves  in  coin  are  provided  to  give  confidence  in  and  security  for 
such  redemption.  With  these  conditions  maintained,  the  United 
States  note  will  be  readily  received  and  paid  on  all  demands.  While 
they  are  maintained,  the  legal-tender  clause  gives  no  additional 
credit  or  sanction  to  the  notes,  but  tends  to  impair  confidence  and 
to  create  fears  of  overissue.  It  would  seem,  therefore,  that  now  and 
during  the  maintenance  of  resumption  it  is  a  useless  and  objectionable 
assertion  of  power,  which  Congress  might  now  repeal  on  the  ground 
of  expediency  alone.  When  it  is  considered  that  its  constitutionality 
is  seriously  contested,  and  that  from  its  nature  it  is  subject  to  grave 
abuse,  it  would  now  appear  to  be  wise  to  withdraw  the  exercise  of 
such  a  power,  leaving  it  in  reserve  to  be  again  resorted  to  in  such  a 
period  of  war  or  grave  emergency  as  existed  in  1862. 

The  Government  derives  an  advantage  in  circulating  its  notes 
without  interest,  and  the  people  prefer  such  notes  to  coin,  as  money, 
for  their  convenience  in  use  and  their  certain  redemption  in  coin  on 
demand.  This  mutual  advantage  may  be  secured  without  the  exer- 
cise of  questionable  power;  nor  need  any  inconvenience  arise  from  the 


700  READINGS  IN  ECONOMIC  HISTORY 

repeal  of  the  legal-tender  clause  as  to  future  contracts.  Contracting 
parties  may  stipulate  for  either  gold  or  silver  coin  or  current  money. 
In  the  absence  of  an  expressed  stipulation  for  coin  the  reasonable  pre- 
sumption would  exist  that  the  parties  contemplated  payment  in  cur- 
rent money,  and  such  presumption  might  properly  be  declared  by 
law  and  the  contract  enforced  accordingly. 

The  Secretary,  therefore,  respectfully  submits  to  Congress  whether 
the  legal-tender  clause  should  not  now  be  repealed  as  to  all  future 
contracts,  and  parties  be  left  to  stipulate  the  mode  of  payment. 
The  United  States  notes  should  still  be  receivable  for  all  dues  to 
the  Government,  they  should  be  properly  redeemed  on  demand  and 
ample  provision  made  to  secure  such  redemption. 

III.  THE  NATIONAL  BANKING  SYSTEM 

A.   Inadequacy  of  State  Banking,  1863  1 

Even  during  the  years  preceding  the  Civil  War,  state  banking  in  many 
parts  of  the  country  had  been  inadequate,  but  with  the  coming  of  war  and  the 
suspension  of  specie  payments  that  system  practically  broke  down.  Senator 
John  Sherman  of  Ohio  spoke  of  the  situation  in  1863  as  follows: 

.  .  .  The  question  is  between  a  national  currency  and  a  currency 
issued  by  State  corporations,  or  a  mixture  of  both.  Now,  I  wish  to 
state  very  briefly  the  objections  to  local  banks;  and  I  am  here  bound 
to  say  that  I  have  always  been  friendly  to  banks,  and  am  now  inter- 
ested in  a  bank. 

The  objections  to  local  banks  are  obvious.  Senators  will  recognize 
them  and  feel  their  force  when  I  state  them.  The  first  is  the  great 
number  and  diversity  of  bank  charters.  There  are  sixteen  hundred 
and  forty-two  banks  in  the  United  States,  established  by  the  laws  of 
twenty-eight  different  States,  and  these  laws  are  as  diverse,  I  was 
about  to  say,  as  the  human  countenance.  They  are  established 
upon  various  bases.  We  have  the  State  bank  system  with  its 
branches.  We  have  the  independent  system,  sometimes  secured  by 
bonds,  sometimes  State  bonds,  sometimes  by  real  estate,  sometimes 
a  mixture  of  both.  We  have  every  diversity  of  bank  system  in  this 
country  that  has  been  devised  by  the  wit  of  man,  and  all  these  banks 
have  a  power  to  issue  paper  money,  competing  daily  with  the  national 
currency.  With  this  multiplicity  of  banks,  depending  upon  different 
organizations,  it  is  impossible  to  have  a  uniform  national  currency, 


Congressional  Globe,  1862-3  (Washington  1863),  Appendix,  50. 


FINANCIAL  HISTORY,   MONEY  AND  BANKING         701 

for  the  value  of  our  national  currency  is  constantly  affected  by  the 
issues  of  this  multitude  of  State  banks.  There  is  no  common  regu- 
lator; they  are  dependent  on  different  systems.  The  clearing-house 
system  adopted  in  the  city  of  New  York,  only  applies  to  that  city. 
It  cannot  be  effective  when  extended  over  a  great  region  of  country. 
There  is  no  check  or  control  over  these  banks.  There  is  a  want  of 
harmony  and  concert  among  them.  Whenever  a  failure  occurs,  such 
as  that  of  the  Ohio  Life  Insurance  and  Trust  Company,  it  operates 
like  a  panic  in  a  disorganized  army:  all  of  them  close  their  doors  at 
once  and  suspend  specie  payments. 

There  is  another  objection  to  these  local  banks,  and  it  is  one  which 
we  cannot  disregard,  and  that  is  their  unequal  distribution  among 
the  States.  In  New  England  the  circulation  of  the  banks  is  now  about 
$50,000,000,  while  in  Ohio,  a  State  with  three  fourths  of  the  population 
of  all  New  England,  it  is  but  $9,000,000.  When  you  make  the  con- 
trast with  other  States,  it  is  still  more  marked.  We,  in  the  West,  are 
now  using  the  paper  money  of  the  New  England  and  New  York  banks, 
and  we  are  paying  to  the  East  the  interest  on  $40,000,000,  which  we 
would  much  rather,  in  these  times  of  difficulty,  pay  to  the  United 
States.  The  western  people  would  be  better  satisfied  now  if  they 
had  the  notes  or  the  United  States  instead  of  the  $40,000,000  of  eastern 
bank  bills  that  are  circulating  among  them.  According  to  a  recent 
statement,  which  I  have  before  me,  the  circulation  of  banks  in  the 
eastern  States  has  now  reached  about  $130,000,000;  and  of  that 
amount  one  third  is  computed  to  be  in  the  western  country.  I  have 
no  doubt  that  we  are  now  circulating  in  the  West  $40,000,000  of  paper 
money  issued  by  the  banks  of  the  East.  Much  of  it  seeks  the  West 
as  a  medium  of  exchange  for  our  agricultural  productions.  We  are 
using  this  money,  and  the  banks  are  deriving  a  profit  of  the  interest 
on  that  money.  If  this  paper  was  driven  out  of  circulation,  and  the 
United  States  notes  should  fill  the  vacuum,  it  would  make  a  contribu- 
tion to  the  Treasury  of  the  United  States  of  $2,400,000,  for  the  mere 
interest  of  a  .currency  which  we  do  not  prefer,  but  are  now  compelled 
to  use  because  it  is  circulated  among  us. 

The  losses  to  the  people  by  counterfeiting  never  can  be  avoided 
when  you  have  such  a  multitude  of  banks.  It  requires  now  skilled 
experts  to  detect  counterfeits.  People  have  made  this  business  of 
counterfeiting  so  perfect  that  it  is  difficult  for  the  best  experts  to  detect 
them;  it  now  depends  as  well  on  the  general  appearance  of  the  holder 
as  of  the  note.  When  a  stranger  presents  a  bank  bill  for  circulation, 
the  person  about  to  receive  it  looks  rather  at  the  man  who  presents 


702  READINGS  IN  ECONOMIC  HISTORY 

it  to  see  whether  his  face  is  honest,  than  at  the  bill  to  detect  whether 
it  is  counterfeit  or  not.  It  is  impossible  to  avoid  counterfeiting, 
or  to  provide  guards  against  it.  Bank  experts  may  save  the  banks, 
but  the  loss  still  falls  upon  the  people.  You  cannot  prevent  the  people 
from  suffering  largely  from  counterfeiting  when  you  have  sixteen 
hundred  different  banks,  issuing  each  of  them  several  different  kinds 
of  bills,  under  the  laws  of  twenty-eight  different  States.  On  the  other 
hand,  by  the  substitution  of  the  national  currency  we  substantially 
lose  nothing  by  counterfeiting.  When  the  notes  are  few  in  kind, 
only  three  or  four  of  them,  all  issued  by  the  United  States,  all  of 
uniform  character,  they  cannot  be  counterfeited,  because  their  face 
will  become  so  familiar  that  every  man  will  know  a  genuine  note; 
he  will  detect  it  hi  a  moment  as  the  countenance  of  a  familiar  friend. 
But  when  he  has  to  decide  on  the  issues  of  sixteen  hundred  banks, 
how  is  it  possible  for  an  ordinary  citizen  to  detect  the  counterfeit? 

The  loss  to  the  people  of  the  United  States  by  broken  bank  bills 
is  computed  to  be  equivalent  to  five  per  cent,  of  the  entire  issue. 
Every  twenty  years  it  is  supposed  that  the  entire  bank  circulation 
ceases  to  exist  or  deteriorates.  Some  banks  pass  through  the  storm 
and  their  notes  are  good,  but  probably  two  or  three  are  successively 
scattered  as  wrecks  along  the  wayside,  until  it  is  now  computed  by 
intelligent  bankers  that  the  loss  to  the  people  of  the  United  States, 
over  and  above  the  loss  of  interest,  by  the  simple  process  of  broken 
bank  bills,  is  five  per  cent,  per  annum.  This  cannot  be  guarded 
against  by  all  your  laws.  Why,  sir,  when  the  system  of  free  banking 
was  established  in  the  western  country,  all  those  who  were  friendly  to 
banks,  and  I  was  among  them,  said,  "now  we  have  a  stable  issue; 
we  have  bank  bills  based  upon  the  bonds  of  the  States,  and  it  is  not 
possible  that  these  bonds  will  ever  deteriorate  in  value  and  the  people 
lose  money."  And  yet,  sir,  within  two  years  from  the  establishment 
of  this  system,  by  the  depreciation  of  the  bonds  of  the  States,  or  by 
fraud,  these  notes  became  depreciated,  and  in  some  cases  were  of  no 
value  whatever.  In  some  cases  the  bonds  were  abstracted;  in  some 
cases  frauds  were  committeed  by  bank  officers.  From  some  cause  or 
other  these  notes  that  we  all  supposed  to  be  upon  a  stable  basis  dis- 
appeared like  snow  before  the  summer's  sun.  The  people  are  con- 
stantly losing  by  them,  and  you  cannot  by  the  wisdom  of  man  guard 
against  the  frauds  and  peculations,  the  genius  of  rascality  to  which 
men  sometimes  engaged  in  this  business  resort.  I  wish  to  cast  no 
reflection  whatever  on  persons  engaged  in  banking,  but  naturally 
rogues  will  resort  to  this  business  because  it  is  one  in  which  they  may 


FINANCIAL  HISTORY,   MONEY  AND  BANKING        703 

sometimes  by  deception  issue  worthless  promises  to  pay  without 
punishment  or  exposure. 

The  loss  of  exchange  by  local  currency  is  very  great.  Ordinarily, 
the  exchange  from  the  West  to  the  East  is  one  per  cent.  This  loss 
is  usually  made  a  gain  to  themselves  by  the  bankers  and  shavers. 
The  suction  of  this  class  of  people  is  equivalent  to  one  per  cent,  of  the 
circulation.  In  the  western  country  you  cannot  buy  a  draft  without 
paying  this  exchange;  and  I  have  known  it  as  high  as  ten  per  cent. 
This  difference  of  exchange  is  a  common  cover  for  usurious  interest. 
Plain  farmers  wishing  to  borrow  money  are  required  to  draw  drafts 
on  New  York,  by  which  contrivance  they  pay  usurious  interest.  All 
this  exchange  is  a  loss  to  the  people.  Even  in  the  most  favorable 
time,  in  a  favorable  state  of  trade  between  the  East  and  the  West, 
an  exchange  of  one  per  cent,  is  demanded  for  drafts  and  bills  of  ex- 
change, simply  because  the  notes  of  the  East  are  worth  more  than 
those  of  the  West.  But  if  you  had  a  national  currency,  uniform  and 
equal  throughout  the  country,  the  cost  of  exchange  to  the  people 
would  only  be  the  cost  of  transfer  from  one  portion  of  the  country 
to  the  other.  From  Cincinnati  to  Xew  York  it  would  be  only  one  tenth 
of  one  per  cent.,  and  it  could  not  be  higher  if  the  only  basis  of  exchange 
was  gold  and  silver,  or  the  paper  money  of  the  United  States,  which 
can  be  transferred  from  one  section  to  the  other  for  from  one  tenth 
to  one  eighth  of  one  per  cent. 

There  is  a  still  more  serious  objection  to  this  paper  money.  With 
a  system  of  local  banks  there  is  no  power  to  control  over-issues  and 
consequent  depreciation  of  currency.  By  enlarging  the  volume  of 
currency,  it  depreciates  the  value  of  United  States  notes;  and  even 
now,  when  the  United  States  have  issued  8250,000,000  of  notes,  the 
banks  have  increased  their  circulation.  Why?  Because  they  can 
make  money  by  its  increase,  and  that  consideration  will  always 
control  private  individuals.  We  cannot  say  that  it  would  not  control 
us;  if  we  had  the  legal  authority  to  issue  money,  and  found  that  we 
could  make  money  by  the  issue,  we  should  find  reason  enough  for 
issuing  it.  Men  will  always  be  governed  by  their  interests. 

I  have  before  me  a  table  which  has  been  carefully  prepared,  show- 
ing that  on  the  ist  of  January,  1862,  in  the  loyal  States,  there  was  a 
circulation  of  $129,000,000.  Now  it  is  $167,000,000.  What  power 
have  you  over  this?  How  can  you  prevent  this  increase?  You 
cannot  do  it  except  by  taxation.  The  banks  are  governed  by  the 
local  laws  of  the  States  in  which  they  are  situated.  Those  local  laws 
are  beyond  your  power;  you  have  no  way  to  reach  them  except  by 


704  READINGS  IN  ECONOMIC  HISTORY 

a  system  of  taxation.  They  may  go  on  making  this  increase  from 
$167,000,000  to  $500,000,000,  until  all  the  values  in  this  country  are 
destroyed,  depending  upon  a  baseless  issue,  the  redemption  of  which 
you  cannot  guaranty.  I  have  here,  from  the  Bankers'  Magazine, 
a  statement  showing  where  this  large  increase  has  occurred.  In 
the  city  of  New  York  there  has  been  an  increase,  since  the  ist  of 
January,  of  iQ^Vo  Per  cent.;  in  the  State  of  Massachusetts  there  has 
been  an  increase  of  4-iyVo  per  cent.;  in  the  State  of  New  Hampshire 
there  has  been  an  increase  of  27^-$  per  cent.;  in  the  city  of  Phila- 
delphia there  has  been  an  increase  of  138^^0  per  cent.;  until  the 
sagacity  of  the  bankers  began  to  notice  the  increase  and  suspected 
the  money  of  the  banks  issuing  the  large  increase.  In  the  western 
country,  for  local  reasons  that  I  need  not  mention,  on  account  of  the 
existence  of  the  limitations  in  the  charters  of  the  banks  of  Ohio  and 
Indiana,  this  increase  has  not  gone  on  so  rapidly;  but  even  in  Ohio 
there  has  been  an  increase,  and  a  considerable  increase,  of  the  paper 
money. 

B.  Superiority  of  the  National  Banking  System,  1868  1 

The  first  year  of  the  war  made  it  evident  that  the  prevailing  state  banking 
system  was  inadequate.  Consequently  an  agitation  arose  to  place  banking 
under  the  control  of  the  federal  government,  with  the  result  that  Congress  in 
1863  provided  for  the  national  banking  system.  To  bring  the  banking  opera- 
tions of  the  country  still  further  within  the  control  of  the  federal  government, 
an  act  of  1865  imposed  a  ten  per  cent  tax  on  state  bank  notes.  Both  acts 
were  justified  on  the  ground  that  business  demanded  a  more  uniform  and  stable 
currency  than  was  in  circulation  at  the  time.  At  first  the  number  of  national 
banks  increased  more  slowly  than  the  friends  of  the  system  had  anticipated. 
It  soon  became  evident,  however,  to  those  who  were  in  the  best  position  to 
judge  that  the  system  possessed  real  merit.  The  Banker's  Magazine  expressed 
such  an  opinion  in  1868,  as  follows: 

The  revolution  which  has  taken  place  in  the  United  States,  within 
the  last  five  years,  in  the  systems  of  Banking  and  Currency,  is  without 
a  parallel  in  history,  in  respect  both  to  its  extent  and  its  completeness. 
On  the  first  day  of  January,  1862,  there  were,  in  the  several  States 
(including  those  in  rebellion,  according  to  their  latest  returns  to  the 
Secretary  of  the  Treasury),  1,496  banks,  with  a  capital  of  $420,000,000. 
They  existed  under  the  laws  of  twenty-nine  States,  and  they  had  dif- 
ferent privileges,  and  were  subject  to  different  obligations.  All  of 
them  were  banks  of  issue,  and  they  had  in  circulation  notes  to  the 
amount  of  $184,000,000.  These  notes  had  only  a  local  currency, 

1  Bankers'  Magazine  (New  York,  1867-8),  XXII,  681-2,  690,  695. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         705 

more  or  less  restricted,  and  were  not  of  equal  value.  Many  of  them 
continued  to  be  at  par  with  gold  until  the  suspension  of  specie  pay- 
ments in  December,  1861,  and  had  for  a  long  time  enjoyed  the  con- 
fidence of  the  public,  although  the  safeguards  by  which  their  credit 
was  maintained  differed  essentially  in  different  States.  Thus,  in 
New  England,  the  safety  of  the  bill-holder  was  secured  by  the  daily 
redemption  of  all  New  England  bank-notes  in  Boston;  in  New  York, 
by  the  pledge  of  stocks  of  adequate  value  with  the  Banking  Depart- 
ment; in  New  Orleans,  Kentucky,  and  Indiana  (so  far  as  the  issues 
of  the  State  Bank  were  concerned),  by  the  magnitude  of  their  coin 
reserves.  But  in  many  of  the  Western  States  the  banks  were  insol- 
vent, and  their  currency  greatly  depreciated.  Thus,  in  Illinois,  eighty- 
nine  banks  had  failed,  and  their  bills  were  redeemed  by  the  State 
auditor,  at  rates  varying  from  fifty  per  cent,  to  par.  In  Wisconsin, 
the  notes  of  thirty-nine  banks  were  discredited;  and  in  Minnesota 
nearly  all  of  them  were  in  liquidation. 

The  "Act  to  provide  a  National  Currency,  secured  by  a  pledge 
of  United  States  bonds,  and  to  provide  for  the  circulation  and  redemp- 
tion thereof,"  was  passed  on  the  25th  of  February,  1863.  It  was  re- 
enacted  in  a  new  draft,  not  essentially  differing  from  the  original  law, 
on  the  3d  of  June,  1864.  Under  the  provisions  of  these  statutes, 
the  banks  of  the  several  States  have  ceased  to  exist  as  banks  of  issue, 
and  nearly  all  of  them  have  become  National  associations. 

On  the  first  day  of  October,  1867,  there  were  1,637  National  banks 
in  operation,  having  a  capital  of  $420,000,000  (the  exact  capital  of 
the  State  banks  in  1862),  and  circulating  notes  to  the  amount  of 
$294,000,000;  while  only  four  millions  of  the  State  bank  issues  were 
still  outstanding.  The  notes  of  the  National  banks  are  secured  by 
a  deposit  of  $338,000,000  in  Federal  bonds,  by  a  first  and  paramount 
lien  on  all  the  assets  of  the  banks,  by  a  personal  liability  of  the  share- 
holders to  an  amount  greater  than  the  circulation,  and  by  the  absolute 
guaranty  of  the  Government;  while  their  convertibility  is  further 
protected  by  the  obligation  of  the  government  to  redeem  them  in- 
stantly at  the  Federal  Treasury,  if  the  bank  by  which  they  are  issued 
shall  fail  to  redeem  them  on  presentation  at  its  counter.  Thus 
fortified,  the  National  bank  notes  are  of  equal  value  throughout  the 
Union,  whatever  may  be  the  place  of  issue. 

The  question  is  now  before  the  country,  whether  this  system  of 
banking  shall  be  maintained  or  overthrown.  The  decision  of  it  rests 
with  Congress,  and  there  is  no  one  of  the  financial  problems,  which 
are  waiting  for  the  solution  of  that  body,  more  important  to  the  public 


706  READINGS  IN  ECONOMIC  HISTORY 

welfare.  If,  after  a  fair  trial,  the  National  banking  system  has  proved 
a  failure,  let  it  be  condemned;  but  it  will  be  unbecoming  the  dignity 
of  the  National  Legislature  to  pronounce  such  a  condemnation  without 
the  fullest  consideration  of  what  it  involves.  .  .  . 

1.  In  enumerating  the  advantages,  which  we  claim  for  the  National 
Banking  system,  we  place  first,  therefore,  the  uniformity  which  it  has 
introduced  into  both  the  currency  and  the  banking  of  the  country.     It  is 
an  important  point  gained,  when  any  of  the  great  departments,  into 
which  the  business  of  a  country  is  divided,  can  be  carried  on,  in  all 
parts  of  a  wide  territory,  on  the  same  principles,  and  under  the  same 
regulations.     The  tendency  of  the  time  is  toward  the  organization, 
and  even  the  consolidation,  of  great  business  enterprises.     Witness 
the  important  operations  which  have  been  recently  effected  in  the 
consolidation  of  railway,  telegraph,  and  express  property,  and  the 
arrangement  of  far-reaching  lines   for   merchandise    transportation. 
But  it  is  more  important,  that  this  principle  of  co-operation,  and 
uniform  organization,  should  prevail  in  banking,  than  in  any  other 
business,  because  its  special  office  is  to  regulate  the  machinery  of 
the  exchanges,  of  credit,  and  of  the  circulation.     The  banks  have 
been  constantly  striving  to  attain  this  end  without  legislation.     The 
Clearing  House  system  is  the  crowning  triumph  of  this   principle 
of  voluntary  organization.  .  .  . 

2.  The   second   important  advantage   which  we   claim  for   the 
National  Bank  system,  is  the  safety  of  the  currency.     We  have  seen 
that  the  plan  of  securing  the  circulation  by  a  pledge  of  public  stocks, 
was  not  original  with  MR.  CHASE.     It  had  been  tried,  with  varied 
results,  in  several  of  the  States.     In  New  York  it  had  operated  well, 
because  the  bonds  of  that  State  were  secured;    but  it  had  failed  in 
Indiana,  Wisconsin,  and  Illinois,  because  the  securities  received  as  a 
basis  for  the  circulation  were  not  sound.     It  is  obvious,  therefore, 
that  the  principle  of  securing  the  bank-note  by  a  pledge  of  State 
stocks,  was  not  of  itself  a  sufficient  safeguard,  while  there  is  so  great  a 
difference  in  the  value  of  State  obligations;   nor  would  it  have  been 
possible  for  the  Federal  Government,  in  fixing  a  basis  for  the  circula- 
tion which  it  desired  to  issue,  to  admit  the  bonds  of  any  State,  without 
receiving  those  of  all,  since  any  discrimination  in  favor  of  the  richer 
States,   would  naturally  have  given   offense   to   the  poorer.    The 
Federal  bonds,  being  the  common  debt  of  the  nation,  were  the  only 
securities,  adequate  in  amount  to  furnish  a  basis  for  the  circulation, 
or  which  were  of  equal  value  and  obligation  in  all  the  States.     In 
adopting  them  as  a  basis  of  banking,  we  followed  not  only  the  earliest 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         707 

practice  of  our  own  Government,  but  also  that  of  the  most  enlightened 
countries  of  Europe.  .  .  . 

C.   Development  of  Banking,  1879-1909  l 

Since  the  Civil  War  banking  has  had  a  remarkable  growth  in  the  United 
States.  State  and  private  banks  and  trust  companies  as  well  as  national  banks 
have  enjoyed  an  increasing  prosperity.  A  view  of  this  development  during  the 
thirty  years  prior  to  1909  follows: 

In  £1886,  state  banks]  .  .  .  were  far  outnumbered  both  by  private 
and  by  national  banks,  but  by  1899  they  were  the  most  numerous  class 
of  banking  institutions  in  the  United  States.  Since  1899  their  rate 
of  increase  has  been  even  greater.  The  following  table  shows  the 
number  of  national  banks,  state  banks,  private  banks,  and  trust 
companies  at  certain  dates: 


1879 

1884 

1889 

1894 

1899 

1904 

1909 

National  banks   

2,048 

2,62s 

T..2T.Q 

7,77O 

3,183 

C    221 

6  8cu 

State  banks  

813 

I,OI7 

2,OQ7 

3,7O^ 

4,2^3 

6,084 

1  1  292 

Private  banks 

2    ZAZ 

3,4^8 

A.  2IZ 

3  SAA. 

4  1  68 

^  A&l 

Trust  companies   . 

-27 

44 

6? 

228 

276 

Q2A 

I  O7O 

Of  the  whole  number  of  banks  and  trust  companies  in  the  United 
States  on  January  i,  1910,  nearly  one-half  were  state  banks;  and,  if 
we  deduct  from  the  number  of  private  banks  the  large  number  of 
brokers  so  classified  who  do  not  do  a  banking  business,  the  state  banks 
are  considerably  more  than  one-half  of  the  total.  In  1879  less  than 
one-sixth  of  the  total  number  of  banks  and  trust  companies  were  state 
banks. 

The  increase  in  the  number  of  state  banks  has  by  no  means  been 
uniform  in  the  different  sections  of  the  country.  The  number  of 
state  banks  in  the  different  groups  of  States  for  the  years  1879,  1889, 
1899,  and  1909  is  shown  in  the  following  table  [on  page  708]: 

It  will  be  noted  that  the  greatest  increase  in  the  number  of  state 
banks  has  been  in  the  Southern,  Middle  Western,  Western,  and 
Pacific  States.  In  the  New  England  States  the  number  of  state 
banks  is  exactly  the  same  as  in  1879,  and  in  the  Eastern  States  the 
increase  in  the  number  of  state  banks  has  been  small.  , 


1  State  Banks  arid  Trust  Companies  Since  the  Passage  of  the  National-Bank  Act. 
By  George  E.  Barnett.  National  Monetary  Commission  (Washington,  1911), 
201-4. 


708 


READINGS  IN  ECONOMIC  HISTORY 


Number  and  percentage  of  increase  of  state  banks,  by  groups  of  States,  for  the  years 
1879,  1889,  1899,  and  1909 


1879 

18 

89 

18 

99 

IQ 

09 

Group 

Number 

Number 

Percent- 
age of 
increase 

Number 

Percent- 
age of 
increase 

Number 

Percent- 
age of 
increase 

New  England  .  . 
Eastern  

J9 

1  80 

22 
2"?^ 

16 

T.A 

23 

•1-2  A 

5 

32 

19 

187 

-17 
16 

Southern  

204 

464 

127 

I,O7I 

131 

3,312 

200 

Middle  Western 
Western  

295 

42 

675 

S28 

129 

I.IC7 

i,594 
o<;6 

I36 

81 

3,717 
3,026 

J33 
216 

Pacific  

64 

ICC 

142 

27=; 

77 

831 

202 

Total...    . 

8n 

2,007 

1  58 

4,  2s3 

IO2 

11,292 

16"? 

In  the  New  England  and  Eastern  States,  the  state  banks  fall  far 
behind  both  the  national  banks  and  the  trust  companies  in  number 
as  well  as  in  aggregate  capital.  Only  a  little  more  than  2  per  cent 
of  the  capital  invested  in  the  New  England  States  in  the  three  classes 
of  banking  institutions  is  represented  by  the  capital  of  the  state 
banks.  The  state  banks  are  somewhat  more  important  in  the  East- 
ern States,  but  less  than  10  per  cent  of  the  banking  capital  in  this 
group  of  States  is  represented  by  the  capital  of  the  state  banks.  In 
all  the  other  groups  of  States  the  state  banks  are  more  numerous  than 
either  the  national  banks  or  trust  companies.  In  none  of  these 
groups,  however,  is  the  capital  invested  so  great  as  that  invested  in 
national  banks,  although  in  all  of  them  it  is  greater  than  the  amount 
invested  in  trust  companies.  In  the  Western  and  Pacific  groups,  how- 
ever, the  amount  of  the  capital  of  the  state  banks  approximates  that  of 
the  national  banks.  In  the  Southern  States  the  capital  of  the  state 
banks  is  in  amount  nearly  four-fifths  of  that  of  the  national  banks,  and 
in  the  Middle  Western  States  a  little  more  than  one-half.  .  .  . 

The  rapid  increase  in  the  number  of  trust  companies  began  much 
later  than  the  increase  in  the  number  of  state  banks.  The  number 
in  the  entire  United  States  did  not  exceed  100  until  1888,  and  the 
number  of  accessions  was  not  large  until  1899.  Since  that  time  the 
increase  has  been  very  rapid.  According  to  the  reports  made  to  the 
National  Monetary  Commission,  on  April  28,  1909,  nearly  1,100 
trust  companies  were  actively  engaged  in  business. 


FINANCIAL   HISTORY,    MONEY    AND    BANKING         709 

The  great  development  of  the  trust  company  has  been  almost 
entirely  in  the  New  England,  Eastern,  and,  to  a  less  extent,  in  the 
Middle  Western  States.  Nearly  one-half  of  all  the  trust  companies 
in  the  United  States  are  in  the  New  England  States,  Pennsylvania, 
and  New  York.  .  .  .  The  capital  of  the  New  England  trust  companies 
is  approximately  one-third  of  that  of  the  New  England  national  banks, 
and  the  capital  of  the  trust  companies  of  the  Eastern  States  is  nearly 
two-thirds  of  that  of  the  national  banks  in  those  States.  In  both 
of  these  groups  the  trust  companies  are  far  more  numerous  and  of  a 
much  greater  aggregate  capital  than  the  state  banks.  In  the  Southern, 
Middle  Western,  Western,  and  Pacific  groups  the  trust  companies  are 
far  less  numerous  and  far  less  important,  measured  by  the  amount  of 
their  capital,  than  either  the  national  or  the  state  banks. 

D.   Expected  Benefits  of  the  Federal  Reserve  Act,  1914  l 

The  new  banking  law  of  1914  was  the  result  of  a  long-drawn-out  agitation 
for  reform  in  government  regulation  of  national  banks.  The  benefits  expected 
to  be  derived  from  the  new  law  were  stated  by  Mr.  Williams,  Comptroller  of 
the  Currency,  as  follows : 

The  Federal  reserve  act,  approved  by  President  Wilson  on  De- 
cember 23,  1913,  is  designed  not  only  to  cure  weaknesses  and  defects 
of  the  currency  system  under  which  we  have  struggled,  and  sometimes 
staggered,  in  the  past,  as  we  have  outgrown  the  conditions  and  passed 
beyond  the  circumstances  which  it  was  especially  provided  to  meet, 
but  to  offer  to  the  people  of  this  country  many  new  advantages  and 
opportunities,  while  emancipating  business  from  many  evils,  diffi- 
culties, and  troubles  with  which  it  has  been  burdened  and  from  which 
it  has  found  no  escape. 

Among  the  principal  direct  benefits  which  the  new  act  confers 
are  these: 

First,  it  supplies  a  circulating  medium  absolutely  safe,  which  will 
command  its  face  value  in  all  parts  of  the  country,  and  which  is  suffi- 
ciently elastic  to  meet  readily  the  periodical  demands  for  additional 
currency,  incident  to  the  movement  of  the  crops,  also  responding 
promptly  to  increased  industrial  or  commercial  activity,  while  re- 
tiring from  use  automatically  when  the  legitimate  demands  for  it 
have  ceased.  Under  the  operation  of  this  law  such  financial  and  com- 
mercial crises,  or  "panics,"  as  this  country  experienced  in  1873, 
in  1893,  and  again  in  1907,  with  their  attendant  misfortunes  and  pros- 
trations, seem  to  be  mathematically  impossible. 

1  Report  of  the  Comptroller  of  the  Currency,  1914  (Washington,  1914),  I,  10-12. 


710  READINGS  IN  ECONOMIC  HISTORY 

Second,  it  provides  effectually  and  scientifically  for  the  mobiliza- 
tion of  bank  reserves  in  the  12  Federal  reserve  districts,  where  these 
funds  are  not  only  available  for  the  member  banks  of  each  respective 
district,  but,  under  wise  and  well-guarded  provisions  of  the  law,  the 
surplus  moneys  of  any  one  district  become  available  for  the  legitimate 
needs  of  any  other  districts  which  may  require  them. 

Third,  it  eliminates  the  indirect  tax  of  many  millions  of  dollars 
annually  upon  the  commerce  and  industry  of  the  country,  heretofore 
imposed  in  the  shape  of  collection  or  "exchange"  charges  on  checks, 
and  inaugurates  a  system  of  clearances  by  which  it  is  expected  that 
every  check  or  draft  on  any  member  bank  in  any  one  of  the  1 2  Federal 
reserve  districts  can  be  collected  ultimately  free  of  the  exchange 
charges  heretofore  exacted  and  may  be  charged  on  the  books  of  the 
Federal  reserve  bank  to  the  account  of  the  bank  upon  which  drawn, 
in  most  cases,  within  24  hours  or  less  after  it  is  deposited  with  a 
member  bank.  This  provision  renders  available  many  hundreds  of 
millions  of  dollars  heretofore  carried  in  transit  in  the  mails  in  expensive 
and  tedious  processes  of  collection,  sometimes  absolutely  useless  during 
weeks  when  much  needed,  held  in  transit  moving  from  point  to  point. 

Fourth,  it  furnishes  a  discount  system  by  which  every  well-man- 
aged member  bank  may  have  the  opportunity  of  converting  into 
money  by  rediscounting,  to  such  extent  as  may  be  necessary  or  desir- 
able, all  commercial  paper  having  not  more  than  three  months  to  run 
which  it  may  have  taken  in  the  ordinary  course  of  its  business.  The 
new  law  removes,  so  far  as  borrowing  money  from  a  Federal  reserve 
bank  is  concerned,  the  limitation  which  prevented  a  national  bank 
from  borrowing  an  amount  in  excess  of  100  per  cent  of  its  capital. 
The  significance  of  this  release  may  be  appreciated  when  it  is  realized 
that  some  national  banks  have  deposits  amounting  to  10  times  their 
capital  or  more.  The  ability  to  borrow  only  an  amount  equal  to 
capital  would  be  wholly  insufficient,  in  many  cases,  to  enable  banks 
to  meet  the  demands  which  arise  from  unexpected  runs,  or  in  financial 
crises,  or  other  extraordinary  demands. 

It  removes  from  prosperous  and  well-managed  banks  penalties 
hitherto  imposed  on  their  very  prosperity  and  success. 

It  relieves  the  well-managed  bank  from  the  limitations  of  original 
capital  invested  and  gives  it  the  legitimate  advantages  of  its  own 
enterprise  and  the  business  it  has  built  up  and  actually  does. 

Fifth,  by  making  it  possible  for  any  well-managed  bank  to  convert 
its  assets  readily  into  cash  to  meet  unexpected  contingencies  or  runs, 
the  necessity  for  the  larger  reserves  heretofore  required  ceases.  It 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         711 

is  estimated  that  by  this  reduction  in  the  reserve  requirements  alone 
more  than  four  hundred  millions  of  dollars  of  money  or  credits  here- 
tofore held  in  reserves  and  inert,  will  become  available  for  commercial 
purposes  and  the  legitimate  demands  of  business. 

Sixth,  the  new  law  also  makes  it  possible  for  national  banks  to 
lend  money  on  improved,  unencumbered  farm  property,  thus  enabling 
farmers,  the  most  numerous  and  in  many  respects  most  important 
portion  of  our  population  to  participate  directly  in  the  beneficent 
provisions  of  the  new  law. 

Seventh,  the  new  law  provides  that  national  banks  may  establish 
branches  in  foreign  countries,  these  branches  to  be  under  the  juris- 
diction and  subject  to  the  rules,  regulations,  and  examinations  of 
the  comptroller's  office.  These  branch  banks  should  be  material 
aids  in  building  up  our  foreign  commerce. 

Eighth,  the  former  system  of  paying  national  bank  examiners  by 
fee  is  abolished;  and  the  examinations  of  all  member  banks,  both 
National  and  State,  are  now  placed  upon  a  basis  which  necessarily 
will  insure  a  thoroughness  and  efficiency  hitherto  impossible. 

Under  the  provisions  of  the  new  law  the  failure  of  efficiently  and 
honestly  managed  banks  is  practically  impossible  and  a  closer  watch 
can  be  kept  on  member  banks.  Opportunities  for  a  more  thorough 
and  complete  examination  are  furnished  for  each  particular  bank. 
These  facts  should  reduce  the  dangers  from  dishonest  and  incompetent 
management  to  a  minimum.  It  is  hoped  that  national-bank  failures 
can  hereafter  be  virtually  eliminated. 

Ninth,  the  establishment  of  a  system  of  bank  acceptances  and  an 
open  market  for  commercial  paper,  which,  it  is  believed,  will  aid  and 
facilitate  this  country  in  obtaining  a  larger  share  of  international 
trade  and  of  the  world  s  commerce. 

IV.  THE  SILVER  QUESTION 

A.    The  "Crime  of  '73"  l 

In  1873  Congress  enacted  a  new  coinage  law  in  which  no  provision  was 
made  for  coining  the  standard  silver  dollar.  During  the  free  silver  discussion 
that  followed  the  friends  of  silver  declared  that  the  act  had  been  passed  without 
free  and  full  discussion  of  its  provisions.  They  referred  to  it  as  the  "  Crime  of 
'73."  Senator  John  P.  Jones,  of  Nevada,  stated  the  position  of  the  free  silver 
men  as  follows: 

Mr.  JONES  said: 

Mr.   PRESIDENT:     The  act.  of    February   12,    1873,  .  .  .  which 


1  Congressional  Record,  1875-6  (Washington,  1876),  Appendix  67,  78,  88,  97. 


712  READINGS  IN  ECONOMIC  HISTORY 

under  the  guise  of  regulating  the  mints  of  the  United  States,  practically 
abolished  one  of  the  precious  metals,  was  a  grave  wrong;  a  wrong 
committed  no  doubt  unwittingly,  yet  no  less  certainly,  in  the  interest 
of  a  few  plutocrats  in  England  and  in  Germany  and  as  certainly  in 
the  interest  of  the  entire  pagan  and  barbarian  world;  a  wrong  upon 
the  people  of  the  United  States  and  of  the  whole  civilized  globe;  a 
wrong  upon  industry,  upon  the  natural  tendency  of  wealth  toward 
equalization,  upon  the  liberties  of  peoples  which  are  born  out  of  the 
effects  of  such  equalization  of  wealth,  upon  every  aspiration  of  man 
which  depends  for  its  realization  upon  the  development  of  those 
liberties. 

The  act  alluded  to  practically  abolished  one  of  the  precious  metals 
as  money,  the  one  chiefly  produced  in  this  country,  the  one  chiefly 
consumed  in  the  semi-civilized  countries  of  Asia,  and  the  one  which 
at  the  date  of  its  abolition  and  under  the  time-honored  laws  that 
previously  prevailed  was  becoming,  as  it  has  since  become,  the  more 
available  metal  of  the  two  in  which  to  transact  exchanges  and  liquidate 
debt.  .  .  . 

But  the  manner  in  which  this  legislation  was  affected  leaves  but 
little  reason  to  infer  that  any  deliberate  judgment  was  exercised  on 
this  important  subject  of  the  standard,  or  that  the  question  was  ever 
so  presented  to  the  American  people  as  to  elicit  the  indorsement  or 
the  approval  of  any  single  congressional  constituency.  The  bill  by 
which  it  was  effected  originated,  as  I  understand  it,  in  another  bill 
which  was  introduced  into  the  House  of  Representatives  February  9, 
1872.  It  was  discussed  for  a  few  moments  on  April  9,  1872.  Then 
the  discussion  was  cut  short,  and  a  substitute,  the  present  law,  reported 
by  title  on  May  27,  and  passed  without  a  reading,  under  a  suspension 
of  the  rules,  May  29,  1872.  From  the  House  it  went  to  the  Senate, 
where,  without  any  discussion  at  all  upon  the  all-important  section 
14,  it  passed;  and,  after  concurrence  by  the  House,  again  without  a 
discussion,  became  a  law. 

I  am  aware  that  it  has  been  stated  that  the  bill  was  passed  after 
very  full  discussion  on  this  subject;  but  I  am  unable  to  find  a  corrobo- 
ration  of  this  statement  in  the  official  report  of  the  proceedings.  If 
any  such  full  discussion  appears  in  the  Congressional  Globe,  I  shall  be 
glad  to  have  it  pointed  out  in  order  that  I  may  correct  the  impression 
now  on  my  mind  in  respect  of  this  matter.  .  .  . 

At  the  bottom  of  this  dangerous  effort  to  abolish  the  double  stand- 
ard of  this  country  lie  nothing  but  selfishness  and  injustice  —  the 
selfishness  of  a  class  who  desire  to  receive  payment  for  debts  and  obliga- 


FINANCIAL  HISTORY,   MONEY   AND   BANKING         713 

tions  in  a  metal  which,  for  the  moment,  and  at  the  mean  natural 
relation,  is  a  few  per  cent,  dearer  than  the  other.  .  .  . 

Opposed  to  the  consummation  of  this  injustice,  not  only  does  all 
nature  array  herself,  but  so  also  do  the  unconscious  instincts  of  human- 
ity, the  occult  working  of  social  institutions.  Consummate  it  if  you 
can,  and  you  will  have  poverty,  distress,  commotion,  and  perhaps 
revolution.  Having  consummated  it,  try  then  to  undo  it,  and  you 
will  find  the  task  beset  with  great  difficulties. 

Neglected  dislocations  of  the  human  frame  are  difficult  to  remedy ; 
because  the  wrenched  member  finds  for  itself  a  new  socket.  The 
dislocation  of  the  social  fabric  which  threatens  to  result  from  the  effects 
of  the  act  of  1873  may  yet  be  averted  by  the  timely  measure  of  restor- 
ing the  double  standard  before  we  attempt  to  resume  specie  payments. 

You  cannot  expect  to  take  a  nation  by  the  throat,  hold  it  down, 
squeeze  the  last  drop  of  substance  out  of  it,  no  matter  in  what  sacred 
name,  whether  of  honor  or  justice,  without  running  the  risk  of  being 
taken  by  the  throat  yourselves.  No  matter  how  cunning  the  injus- 
tice is,  it  is  sure  to  be  found  out  when  it  comes  to  work,  and  sure  to 
be  avenged  when  it  is  found  out.  All  the  interests  of  society,  even 
the  safety  and  permanence  of  vested  interests,  demand  the  exercise 
of  equity  in  the  affairs  of  government;  and  I  tell  those  who  repre- 
sent such  interests  that,  in  the  long  run,  they  will  best  consult  their 
advantage  in  being  just  at  the  outset.  They  got  the  people  of  this 
country  by  the  throat  in  the  ambiguously  worded  act  of  February  25, 
1862.  They  pinned  the  people  down  by  the  coin-paying  act  of  March 
18,  1869,  and  now  they  would  squeeze  the  last  drop  of  substance  out 
of  them  by  the  single  gold  standard  act  of  February,  1873,  which  they 
propose  to  carry  into  effect  by  the  resumption  act  (a  very  proper  act 
of  itself)  of  1875.  And  now  my  advice  to  them  is,  to  stop  and  undo 
the  worst  part  of  their  work,  by  repealing  so  much  of  the  act  of  1873 
as  prevents  the  silver  dollar  from  being  tendered  for  the  payment  of 
debts.  The  people  have  paid  their  full  ransom  to  Brennus;  let  him 
not  attempt  to  overload  the  scale  with  the  weight  of  his  sword,  or  they 
may  take  it  up  and  use  it.  ... 

I  have  done.  For  the  patience  and  attention  with  which  Senators 
have  listened  to  an  exposition  unusually  lengthy  and  somewhat 
tedious,  I  thank  them,  and  can  only  plead  the  transcendent  impor- 
tance of  the  subject. 

There  is  yet  time  to  undo  the  work  of  1873,  to  correct  the  grave 
blunder  perpetrated  by  the  mint  act  of  that  year,  in  interdicting  the 
American  silver  dollar  and  substituting  the  single  standard  of  gold  for 


714  READINGS  IN  ECONOMIC  HISTORY 

the  money  of  the  Constitution.  The  disastrous  effects  which,  in  my 
opinion,  are  bound  to  flow  from  this  attenuation  of  the  standard  and 
the  basis  of  prices  and  credit  are  not  yet  felt  because  of  the  existing 
suspension  of  specie  payments;  but  so  soon  as  specie  payments  are 
resumed  —  if  indeed  they  can  ever  be  resumed  without  the  restoration 
and  co-ordination  of  silver  in  the  standard  —  will  the  bad  effects  of 
this  legislation  develop  themselves  and  make  their  mark  upon  the 
affairs  of  the  country.  It  may  then  be  too  late  to  reform. 

The  present  is  therefore  the  acceptable  time  to  undo  the  unwitting 
and  inconsiderate  work  of  1873,  and  to  render  our  legislation  upon  the 
subject  of  money  consistent  with  the  physical  facts  concerning  the 
stock  and  supply  of  the  precious  metals  throughout  the  world  and 
conformable  to  the  Constitution  of  the  country. 

We  cannot,  we  dare  not,  avoid  speedy  action  upon  this  subject. 
Not  only  do  reason,  justice,  and  authority  unite  in  urging  us  to  re- 
trace our  steps,  but  the  organic  law  commands  us  to  do  so,  and  the 
'  presence  of  peril  enjoins  what  the  law  commands.  .  .  . 

B.    The  Coinage  Act  of  1873  Defended 1 

Senator  Jones'  charge  that  the  coinage  law  of  1873  nad  been  passed  as  the 
result  of  underhand  legislation  did  not  go  unanswered.  Senator  John  Sherman 
of  Ohio  defended  the  act  as  follows: 

.  .  .  Perhaps  there  is  no  law  on  the  statute-book  that  received 
more  thorough  consideration  than  the  act  of  1873,  which  is  entitled 
"An  act  revising  and  amending  the  laws  relative  to  the  mints,  assay 
offices,  and  coinage  of  the  United  States."  It  is  a  long  law,  covering, 
I  think,  twelve  pages  of  the  Statutes  of  the  United  States,  and  was 
approved  February  12,  1873.  That  act  was  first  introduced  from  the 
Treasury  Department  in  January,  I  think,  1870,  more  than  three 
years  before  it  passed.  It  was  discussed  at  some  length  in  the  Senate; 
was  then  printed  and  sent  all  over  the  country  to  every  person  who 
was  familiar  with  the  subject,  especially  to  California,  to  Nevada, 
the  Mint  at  Philadelphia,  and  largely  to  Europe;  and  it  was  thoroughly 
examined.  It  came  back,  and  in  the  following  session,  that  is,  the 
session  of  1870  and  1871,  it  passed  the  Senate  of  the  United  States. 
Subsequently  the  bill  failed  in  the  House  for  want  of  time  in  that  Con- 
gress. At  the  next  session,  however,  it  was  introduced  in  the  House 
of  Representatives.  It  was  there  discussed,  and  finally  passed  the 
House  of  Representatives  and  came  to  the  Senate,  the  same  bill  in 


Congressional  Record,  1875-6  (Washington,  1876),  2734-5. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         715 

effect  that  had  previously  passed  the  Senate  of  the  United  States. 
In  the  Senate  it  was  again  examined,  rediscussed,  considered,  and 
passed.  So  that  this  bill  really  was  pending  in  Congress  nearly  four 
years,  and  it  was  discussed  in  every  stage  of  its  progress.  It  was 
examined  by  experts  not  only  in  this  country  but  in  Europe.  It  was 
prepared  at  the  Treasury  Department,  and  largely  prepared  by  Mr. 
Patterson,  of  Philadelphia,  who  is  now,  probably,  the  most  eminent 
authority  in  this  country  on  the  subject,  and  by  Dr.  Linderman,  and 
others.  It  was  submitted  to  all  classes,  and  especially  to  persons 
living  in  California  and  other  parts  of  the  country  interested  in  the 
production  of  gold  and  silver. 

There  is  another  thing  to  which  I  wish  to  call  attention.  The  act 
of  1873  did  not  make  any  essential  change  in  the  then  existing  law. 
The  only  change  of  importance  in  the  previous  law  made  by  the  act 
of  1873  was  made  at  the  request  of  the  interests  in  California.  That 
is,  the  trade-dollar  was  introduced  as  a  mercantile  dollar  to  enable 
them  to  send  in  a  convenient  form  the  production  of  silver  in  this 
country  to  China.  This  was  the  only  change  made  in  the  then  exist- 
ing law  of  any  material  character.  The  bill  itself  was  but  a  codifica- 
tion and  revision  of  the  laws  relating  to  the  mints  of  the  United  States 
and  the  coinage  of  the  United  States,  changing  but  slightly  any  mate- 
rial features  of  the  existing  laws.  The  proposition  about  the  trade- 
dollar  was  introduced  at  the  request  of  merchants  and  dealers 
in  bullion  in  San  Francisco,  and  was  intended  simply  as  a  means 
of  enabling  them  to  put  in  the  best  and  most  valuable  form 
the  silver  bullion  of  the  country  with  a  view  to  its  exportation  to 
China  and  Japan. 

My  honorable  friend  from  Nevada  in  his  long  and  carefully  pre- 
pared speech  has  gone  upon  the  idea  that  the  act  of  1873  in  some  way 
demonetized  silver.  What  I  have  stated  shows  that  it  did  not  in 
the  slightest  degree  demonetize  silver.  My  friend  from  Missouri 
(Mr.  Bogy)  was  perfectly  correct  in  saying  that  so  far  as  the  silver 
coins  were  concerned  the  act  of  1873  did  not  have  the  slightest  effect 
upon  them.  But,  on  the  other  hand,  the  act  of  1853,  to  which  the 
Senator  from  Nevada  did  not  seem  to  allude  except  in  quoting  the 
report  of  Mr.  Hunter,  did  adopt  the  system  of  what  is  called  a  sub- 
sidiary coinage  of  silver ;  that  is,  it  made  the  coinage  of  silver  subsid- 
iary to  gold.  It  provided  for  a  gold  coinage,  and  made  the  silver  coin- 
age of  fifty-cent  pieces,  twenty-five-cent  pieces,  ten-cent  pieces,  &c., 
called  subsidiary  coins,  and  demonetized  those  by  reducing  them  to 
about  6  per  cent,  below  the  legal  relative  value  of  sixteen  to  one;  and 


7i6  READINGS  IN  ECONOMIC  HISTORY 

if  there  is  any  law  to  complain  of  on  the  statute-books  of  the  United 
States,  it  is  the  law  of  1853,  in  that  respect.  .  .  . 

.  .  .  The  act  of  1873  did  not  affect  it  in  the  slightest  degree,  and 
therefore  the  comments  made  by  the  Senator  from  Nevada  rest  on  an 
error  in  that  particular.  The  essential  qualities  of  the  act  of  1873 
are  precisely  like  the  act  of  1853.  It  provided  for  subsidiary  coins. 
The  substance  of  the  act  of  1853  was  to  provide  for  a  subsidiary  coin- 
age of  silver.  But  there  is  another  thing  to  be  remembered.  The 
right  to  coin  the  silver  dollar,  which  is  now  proposed  to  be  authorized 
again,  has  always  existed  in  this  country,  has  never  been  taken  away. 
It  is  the  legal  dollar  to-day,  and  the  silver  dollars  that  are  now  out- 
standing, if  there  are  any,  and  I  suppose  there  are  not  many,  are  a 
legal  tender  for  all  amounts  unless  the  quality  of  legal  tender  has  been 
taken  away  by  these  Revised  Statutes. 

The  act  of  1873  is  before  me.  As  I  said,  it  is  one  of  the  most  care- 
fully prepared  statutes  that  ever  were  passed  in  any  country  in  the 
world.  It  underwent  the  scrutiny  of  persons  here  and  abroad;  and 
for  four  sessions  of  Congress  was  it  here  and  discussed.  That  act 
simply  leaves  the  old  dollar  where  the  law  of  1853  left  it.  It  says 
nothing  about  it.  It  says  that  no  coins  but  these  named  shall  be  issued 
under  the  act;  but  the  old  silver  dollar  stood  precisely  as  it  stood 
before  under  the  act  of  1853.  It  was  true  it  had  not  been  issued  since 
1853;  and  I  suppose  not  for  some  years  before  that,  though  I  do  not 
knpw.  .  .  . 

I  have  been  often  asked  not  only  in  this  Chamber  but  outside,  how 
comes  it  that  the  silver  dollar  was  dropped  from  among  the  coins  of  the 
country.  The  answer  is  that  in  1873,  when  these  statutes  were  so  care- 
fully revised,  the  silver  dollar  as  provided  in  the  then  existing  law 
was  worth  more  than  a  dollar  in  gold,  more  in  the  money  markets  of 
the  world.  There  was  no  use  then  in  issuing  the  dollar,  because  it 
would  go  into  the  melting-pot,  being  worth  more  than  the  gold  dollar. 
That  was  the  reason  why  the  silver  dollar  was  not  provided  for.  That 
was  before  the  movements  which  have  been  commented  upon  in 
Europe,  and  especially  in  Germany,  commenced  to  affect  the  price 
of  silver.  The  United  States  had  since  the  act  of  1837  undervalued 
silver;  that  is,  they  required  sixteen  ounces  of  silver  to  be  equal  to  one 
ounce  of  gold.  The  result  was  that  a  dollar  in  silver  was  worth  more 
than  a  dollar  in  gold.  France  and  other  countries  had  said  that  fif- 
teen and  a  half  ounces  of  silver  should  be  equal  to  an  ounce  of  gold, 
and  that  made  a  difference  of  3  or  4  per  cent,  as  between  their  relation 
and  ours,  which  difference  was  sufficient  to  induce  the  exportation  of 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         717 

silver  in  the  form  of  dollars  or  bullion  to  France  or  the  countries  of 
Europe  where  the  double  standard  prevailed.  The  result  was  that 
there  was  no  object  in  1873  in  providing  for  the  silver  dollar.  If  it  had 
been  issued  from  the  Mint  it  would  not  have  gone  into  circulation,  but 
would  have  been  exported.  The  idea  of  reducing  it  down  to  the  French 
standard  of  fifteen  and  a  half  to  one  was  not  entertained,  as  our  sub- 
sidiary coin  which  then  filled  the  channels  of  circulation  was  actually 
only  fourteen  and  a  half  to  one.  There  was  no  object,  therefore,  in 
issuing  the  silver  dollar  for  the  purpose  of  maintaining  the  double 
standard. 

These  were  the  circumstances,  and  I  simply  rose  now  at  the  heel 
of  the  argument  of  the  honorable  Senator  from  Nevada  to  correct  the 
misapprehension  into  which  he  has  fallen  about  the  act  of  1873.  The 
act  of  1873  itself  was  but  a  codification  of  the  then  existing  laws  of 
the  United  States,  and,  with  the  exception  of  prohibiting  the  issue 
of  the  silver  dollar,  it  did  not  change  in  the  slightest  degree  the  law  of 
1853,  so  far  as  it  affected  the  silver  coin.  The  silver  coins  now  in 
circulation  were  practically  provided  for  by  the  act  of  1853.  The 
only  change  made  by  the  act  of  1873  was  in  measuring  the  weight 
of  these  coins  in  grams  instead  of  in  grains,  slightly  changing  to  the 
extent  of  about  \  of  i  per  cent,  the  value  of  the  silver  in  the  silver 
coins;  and  this  was  done  to  make  them  assimilate,  dollar  for  dollar, 
grain  for  grain,  weight  for  weight,  size  for  size,  with  the  French  silver 
coins  now  in  circulation,  so  that  a  five-franc  piece  is  $i,  and  the 
same  proportion  prevails  throughout. 

C.   Operation  of  the  Bland-Allison  Silver  Purchase  Act,  1878-1889  l 

By  1878  the  agitation  for  the  remonetization  of  the  standard  silver  dollar 
had  become  strong  enough  to  compel  favorable  legislation.  Accordingly  the 
first  silver  purchase  act,  generally  known  as  the  Bland-Allison  Act,  was  passed 
by  Congress.  This  act  provided  for  the  purchase  of  silver  by  the  Treasury 
Department;  and  its  operation  during  almost  its  entire  existence  was  described 
in  1889  by  the  Secretary  of  the  Treasury  as  follows: 

The  continued  coinage  of  the  silver  dollar,  at  a  constantly  increas- 
ing monthly  quota,  is  a  disturbing  element  in  the  otherwise  excellent 
financial  condition  of  the  country,  and  a  positive  hindrance  to  any 
international  agreement  looking  to  the  free  coinage  of  both  metals  at 
a  fixed  ratio. 

Mandatory  purchases  by  the  Government  of  stated  quantities  of 
silver,  and  mandatory  coinage  of  the  same  into  full  legal-tender  dollars, 

1  Treasury  Report,  1889  (Washington,  1889),  LX-LXI. 


718  READINGS  IN  ECONOMIC  HISTORY 

are  an  unprecedented  anomaly,  and  have  proved  futile,  not  only  in 
restoring  the  value  of  silver,  but  even  in  staying  the  downward  price 
of  that  metal. 

Since  the  passage  of  the  act  of  February  28,  1878,  to  November  i, 
1889,  there  have  been  purchased  299,889,416.11  standard  ounces  of 
silver,  at  a  cost  of  $286,930,633.64,  from  which  there  have  been  coined 
343,638,001  standard  silver  dollars. 

There  were  in  circulation  on  November  i  of  the  present  year 
60,098,480  silver  dollars,  less  than  $i  per  capita,  the  remainder,  283,- 
539,521,  being  stored  away  in  Government  vaults,  of  which  $277,319,- 
944  were  covered  by  outstanding  certificates. 

The  price  of  silver,  on  March  i,  1878,  was  54y|  pence,  equal  to 
$1.20429  per  ounce  fine.  At  this  price  $2,000,000  would  purchase 
1,660,729  ounces  of  fine  silver,  which  would  coin  2,147,205  standard 
silver  dollars.  At  the  average  price  of  silver  for  the  fiscal  year  ended 
June  30,  1889  (42.499  pence),  equivalent  to  $0.93163  per  ounce  fine, 
$2,000,000  would  purchase  2,146,755  fine  ounces,  out  of  which 
2,775,628  standard  silver  dollars  could  be  coined. 

The  lower  the  price  of  silver,  the  greater  the  quantity  that  must  be 
purchased,  and  the  larger  the  number  of  silver  dollars  to  be  coined, 
to  comply  with  the  act  of  February  28,  1878. 

No  proper  effort  has  been  spared  by  the  Treasury  Department  to 
put  in  circulation  the  dollars  coined  under  this  law.  They  have  been 
shipped,  upon  demand,  from  the  mints  and  sub-treasuries,  free  of 
charge,  to  the  nearest  and  the  most  distant  localities  in  the  United 
States,  only  to  find  their  way  back  into  Treasury  vaults  in  payment  of 
Government  dues  and  taxes.  Surely  the  stock  of  these  dollars  which 
can  perform  any  useful  function  as  a  circulating  medium  must  soon 
be  reached,  if  it  has  not  been  already,  and  the  further  coinage  and 
storage  of  them  will  then  become  a  waste  of  public  money  and  a 
burden  upon  the  Treasury. 

It  is  freely  admitted  that  the  predictions  of  many  of  our  wisest 
financiers,  as  to  when  the  safe  limit  of  silver  coinage  would  be  reached, 
have  not  been  fulfilled,  but  it  is  believed  that  the  principles  on  which 
their  apprehensions  were  based  are  justified  by  the  laws  of  trade  and 
finance,  and  by  the  universal  experience  of  mankind.  While  many 
favorable  causes  have  co-operated  to  postpone  the  evil  effects  which  are 
sure  to  follow  the  excessive  issue  of  an  overvalued  coin,  the  danger 
none  the  less  exists. 

The  silver  dollar  has  been  maintained  at  par  with  gold,  the  mone- 
tary unit,  mainly  by  the  provisions  of  law  which  make  it  a  full  legal 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         719 

tender,  and  its  representative,  the  silver  certificate,  receivable  for 
customs  and  other  dues;  but  the  vacuum  created  by  the  retirement 
of  national-bank  circulation,  and  the  policy  of  the  Government  in  not 
forcibly  paying  out  silver,  but  leaving  its  acceptance  largely  to  the 
creditor,  have  materially  aided  its  free  circulation. 

The  extraordinary  growth  of  this  country  in  population  and  wealth, 
the  unprecedented  development  in  all  kinds  of  business,  and  the  un- 
swerving confidence  of  the  people  in  the  good  faith  and  financial  con- 
dition of  our  Government,  have  been  powerful  influences  in  enabling  us 
to  maintain  a  depreciated  and  constantly  depreciating  dollar  at  par 
with  our  gold  coins,  far  beyond  the  limit  which  was  believed  possible 
a  few  years  ago. 

But  the  fact  must  not  be  overlooked  that  it  is  only  in  domestic  trade 
that  this  parity  has  been  retained;  in  foreign  trade  the  silver  dollar 
possesses  only  a  bullion  value. 

D.   Effect  of  the  Sherman  Silver  Purchase  Act  on  the  Supply  of  Money, 

1893.^ 

In  1890  the  Bland-Allison  Silver  Purchase  law  was  repealed  and  the  so- 
called  Sherman  Silver  Purchase  law  was  enacted.  Three  years  later  this  latter 
law  was  repealed.  During  its  existence  the  money  supply  of  the  country  was 
materially  increased.  A  view  of  the  increase  at  this  time  of  its  repeal  was  given 
as  follows: 

.  .  .  This  vast  increase  in  the  volume  of  outstanding  currency, 
notwithstanding  the  enormous  exports  of  gold  during  the  year,  is  the 
result  of  several  causes,  among  which  may  be  mentioned  the  issue  of 
Treasury  notes  for  the  purchase  of  silver  bullion,  the  excess  of  public 
expenditures  over  receipts,  the  additional  circulation  called  for  by  the 
national  banks  during  the  late  financial  stringency,  and  the  large 
imports  of  gold,  which  amounted  during  the  months  of  July,  August, 
September,  and  October,  1893,  to  the  sum  of  $55,785,526.  That  the 
amount  of  money  in  the  country  is  greater  than  is  required  for  the 
transaction  of  the  business  of  the  people  at  this  time  is  conclusively 
shown  by  the  fact  that  it  has  accumulated,  and  is  still  accumulating, 
in  the  financial  centers  to  such  an  extent  as  to  constitute  a  serious 
embarrassment  to  the  banks  in  which  it  is  deposited,  many  of  which 
are  holding  large  sums  at  a  loss.  This  excessive  accumulation  of 
currency  at  particular  points  is  caused  by  the  fact  that  there  is  no 
such  demand  for  it  elsewhere  as  will  enable  the  banks  and  other  in- 
stitutions to  which  it  belongs  to  loan  it  to  the  people  at  remunerative 

1  Treasury  Report,  1893  (Washington,  1893),  LXXIV-LXXVII. 


720  READINGS   IN   ECONOMIC    HISTORY 

rates,  and  it  will  continue  until  the  business  of  the  country  has  more 
fully  recovered  from  the  depressing  effects  of  the  recent  financial 
disturbances.  .  .  . 

The  unsatisfactory  condition  of  our  currency  legislation  has  been 
for  many  years  the  cause  of  much  discussion  and  disquietude  among 
the  people,  and  although  one  great  disturbing  element  has  been  re- 
moved, there  still  remain  such  inconsistencies  in  the  laws  and  such 
differences  between  the  forms  and  qualities  of  the  various  kinds  of 
currency  in  use  that  private  business  is  sometimes  obstructed  and  the 
Treasury  Department  is  constantly  embarrassed  in  conducting  the 
fiscal  operations  of  the  Government.  There  are  now  in  circulation 
nine  different  kinds  of  currency,  all  except  two  being  dependent  di- 
rectly or  indirectly  upon  the  credit  of  the  United  States.  One  statute 
requires  the  Secretary  of  the  Treasury  to  redeem  the  old  legal-tender 
notes  in  coin  on  presentation,  and  another  compels  him  to  reissue 
them,  so  that,  no  matter  how  often  they  are  redeemed,  they  are  never 
actually  paid  and  extinguished.  The  act  of  July  14,  1890,  provides 
that  the  Treasury  notes  issued  in  payment  for  silver  bullion  shall  be 
redeemed  in  gold  or  silver  coin  at  the  discretion  of  the  Secretary,  and 
when  so  redeemed  may  be  reissued;  but  the  same  act  also  provides 
that  no  greater  or  less  amount  of  such  notes  shall  be  outstanding  at 
any  time  than  the  cost  of  the  silver  bullion  and  the  standard  silver 
dollars  coined  therefrom  then  held  in  the  Treasury  purchased  by 
such  notes,  and  consequently,  when  these  notes  are  redeemed  with 
silver  coined  from  the  bullion  purchased  under  the  act,  they  can  not 
be  reissued,  but  must  be  retired  and  canceled,  for  otherwise  there 
would  be  a  greater  amount  of  notes  outstanding  than  the  cost  of  the 
bullion  and  coined  dollars  "then  held  in  the  Treasury."  In  this 
manner  notes  to  the  amount  of  $2,625,984  have  been  retired  and  can- 
celed since  August  last,  and  standard  silver  dollars  have  taken  their 
places  in  the  circulation.  If  redeemed  in  gold  coin,  the  notes  might 
be  lawfully  retired  or  reissued  in  the  discretion  of  the  Secretary;  but 
the  condition  of  the  Treasury  has  been,  and  is  now,  such  that  practi- 
cally no  discretion  exists,  for  the  reason  that  the  necessities  of  the  public 
service  and  the  requirements  of  the  coin  reserve  compel  him  to  reissue 
them  in  defraying  the  expenditures  of  the  Government  or  in  procuring 
com  to  replenish  that  fund. 

One  of  the  principal  difficulties  encountered  by  the  Treasury 
Department  results  from  the  indisposition  of  the  public  to  retain 
standard  silver  dollars  and  silver  certificates  in  circulation.  It 
requires  constant  effort  on  the  part  of  the  Treasury  officials  to  pre- 


FINANCIAL  HISTORY,   MONEY  AND  BANKING        721 

vent  the  certificates  especially  from  accumulating  in  the  subtreasuries 
to  the  exclusion  of  legal-tender  currency.  Why  this  should  be  the 
case  is  not  easily  understood,  for,  although  these  certificates  are  not 
legal  tender  in  the  payment  of  private  debts,  they  are,  by  the  acts 
of  1878  and  1886,  made  receivable  for  all  public  dues,  and  by  the  act 
of  May  12,  1882,  national  banks  are  authorized  to  hold  them  as  part 
of  their  lawful  reserves.  With  the  policy  of  maintaining  equality 
in  the  exchangeable  value  of  all  our  currency  firmly  established,  and 
the  further  accumulation  of  silver  bullion  arrested,  there  is  no  sub- 
stantial reason  why  the  silver  certificate  should  not  be  as  favorably 
received  and  as  liberally  treated  by  the  public  as  any  other  form  of 
note  in  circulation;  and,  for  the  purpose  of  creating  a  greater  demand 
for  their  permanent  use  in  the  daily  transactions  of  the  people,  I  have 
directed  that,  as  far  as  the  law  permits,  and  as  rapidly  as  the  oppor- 
tunity is  afforded,  the  amount  of  such  certificates  of  denominations 
less  than  $10  shall  be  increased  by  substituting  them  for  larger  ones 
to  be  retired,  and  that  the  small  denominations  of  other  kinds  of  cur- 
rency shall  be  retired  as  they  are  received  into  the  Treasury  and  larger 
ones  substituted  in  their  places. 

There  are  now  outstanding  United  States  legal-tender  notes  to 
the  amount  of  $67,944,941  in  denominations  less  than  $10;  Treasury 
notes  issued  under  the  act  of  1890  of  denominations  less  than  $10, 
$64,688,489,  and  national-bank  notes,  $63,381,916.  There  is  express 
authority  in  the  act  of  August  4,  1886,  to  substitute  small  silver 
certificates  for  larger  ones,  and  the  Secretary  of  the  Treasury  also  has 
power  to  make  such  changes  as  he  may  deem  proper  in  the  denomina- 
tions of  the  Treasury  notes  issued  under  the  act  of  July  14,  1890,  but 
Congress,  in  the  sundry  civil  appropriation  act  approved  March  3, 
1893,  provided  that  no  part  of  the  money  therein  appropriated  to 
defray  the  expenses  of  the  Bureau  of  Engraving  and  Printing  should 
be  expended  for  printing  United  States  legal-tender  notes  of  larger 
denominations  than  those  retired  or  canceled.  As  the  law  now 
specifically  designates  the  denominations  in  which  national-bank 
notes  shall  be  issued,  they  can'  not  be  changed  without  further  legis- 
lation, and  consequently  during  the  present  fiscal  year,  at  least,  the 
$64,688,489  in  small  Treasury  notes  are  the  only  ones  that  can  be 
lawfully  retired  to  enlarge  the  use  of  small  silver  certificates.  I  am 
of  the  opinion  that  if  this  policy  can  be  carried  out  to  the  extent  of 
supplying  the  country  with  small  silver  certificates  to  an  amount 
sufficient  to  conduct  the  ordinary  cash  transactions  of  the  people,  and 
if,  during  the  same  tune,  certificates  of  the  largest  denominations  were 


722  READINGS  IN  ECONOMIC  HISTORY 

issued  in  the  places  of  others  retired,  so  as  to  encourage  the  national 
banks  to  hold  them  as  parts  of  their  lawful  reserves,  the  existing  diffi- 
culties would  be  removed,  and  ultimately  a  larger  amount  of  such  cur- 
rency than  is  now  in  circulation  could  be  conveniently  and  safely  used. 

The  Treasury  now  holds  140,699,760  fine  ounces  of  silver  bullion, 
purchased  under  the  act  of  July  14,  1890,  at  a  cost  of  $126,758,218, 
and  which,  at  the  legal  ratio  of  15.988  to  i,  would  make  181,914,899 
silver  dollars.  The  act  provided  that  after  the  first  day  of  July, 
1891,  the  Secretary  of  the  Treasury  should  coin  as  much  of  the  bullion 
purchased  under  it  as  might  be  necessary  to  provide  for  the  redemption 
of  the  notes,  and  that  any  gain  or  seigniorage  arising  from  such  coin- 
age should  be  accounted  for  and  paid  into  the  Treasury.  It  is  plain 
from  this,  and  other  provisions  of  the  act,  that  so  much  of  the  bullion 
as  may  be  necessary,  when  coined,  to  provide  for  the  redemption  of 
the  entire  amount  of  notes  outstanding,  is  pledged  for  that  purpose, 
and  can  not  be  lawfully  used  for  any  other;  but  it  was  decided  by  the 
late  Attorney-General,  and  by  my  predecessor  in  office,  that  the  so- 
called  gain  or  seigniorage  resulting  from  the  coinage  as  it  progressed 
constituted  a  part  of  the  general  assets  of  the  Treasury,  and  that  cer- 
tificates could  be  legally  issued  upon  it,  notwithstanding  the  act  of 
1890  is  silent  upon  the  latter  subject. 

The  coinage  of  the  whole  amount  of  this  bullion,  which  would 
employ  our  mints,  with  their  present  capacities,  for  a  period  of  about 
five  years,  would,  at  the  existing  ratio,  increase  the  silver  circulation 
during  the  time  named  $55,156,681  from  seigniorage,  besides  such 
additions  as  might  be  made  in  the  meantime  by  the  redemption  of 
Treasury  notes  in  standard  silver  dollars.  In  order  that  the  Depart- 
ment might  be  in  a  condition  to  comply  promptly  with  any  increased 
demand  that  may  be  made  upon  it  by  the  public  for  standard  silver 
dollars  or  silver  certificates,  or  that  it  might  take  advantage  of  any 
favorable  opportunity  that  may  occur  to  put  an  additional  amount 
of  such  currency  in  circulation  without  unduly  disturbing  the  mone- 
tary situation,  I  have  caused  a  large  amount  of  bullion  to  be  prepared 
for  coinage  at  New  Orleans  and  San  Francisco,  and  have  ordered  the 
mints  at  those  places  to  be  kept  in  readiness  to  commence  operations 
at  any  time  when  required. 

E.     A  Plea  for  the  Free  Coinage  of  Silver,  1896  l 

When  the  Democrats  met  in  their  National  Nominating  Convention  at  Chicago 
in  1896,  it  was  generally  expected  that  a  bitter  contest  would  arise  over  the  free 

1  Contemporary  Newspapers,  July  8  and  9,  1896. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         723 

silver  question.  Delegates  from  the  west  and  the  south  were  united  in 
demanding  the  remonetization  of  silver,  while  the  bulk  of  the  opposition  came 
from  the  eastern  states.  The  logical  presidential  candidate  of  the  free  silver 
men  was  Richard  P.  (Silver  Dick)  Bland  of  Missouri,  for  he  had  been  their 
spokesman  for  years,  and  but  for  an  unexpected  occurrence  he  would  in  all 
probability  have  been  selected  by  them  as  their  standard  bearer.  As  it  turned 
out,  however,  a  new  champion  of  the  free  silver  cause  arose  to  displace  him. 
William  Jennings  Bryan,  in  a  stirring  speech,  in  which  he  declared  the  in- 
industrial  evils,  through  which  the  country  was  then  going,  to  have  been  caused 
by  the  single  gold  standard,  stated  the  cause  of  the  free  silver  men  so  eloquently 
that  they  named  him  as  their  candidate  for  president.  Important  portions  of 
this  speech  follow: 

Never  before  in  the  history  of  this  country  has  there  been  wit- 
nessed such  a  contest  as  that  through  which  we  have  just  passed. 
Never  before  in  the  history  of  American  politics  has  a  great  issue  been 
fought  out  as  this  issue  has  been,  by  the  voters  of  a  great  party.  On 
the  fourth  of  March,  1895,  a  few  Democrats,  most  of  them  members 
of  Congress,  issued  an  address  to  the  Democrats  of  the  nation,  assert- 
ing that  the  money  question  was  the  paramount  issue  of  the  hour; 
declaring  that  a  majority  of  the  Democratic  party  had  the  right  to 
control  the  action  of  the  party  on  this  paramount  issue;  and  conclud- 
ing with  the  request  that  the  believers  in  the  free  coinage  of  silver  in 
the  Democratic  party  should  organize,  take  charge  of,  and  control  the 
policy  of  the  Democratic  party.  Three  months  later,  at  Memphis, 
an  organization  was  perfected,  and  the  silver  Democrats  went  forth 
openly  and  courageously  proclaiming  their  belief,  and  declaring  that, 
if  successful,  they  would  crystallize  into  a  platform  the  declaration 
which  they  had  made.  Then  began  the  conflict.  With  a  zeal 
approaching  the  zeal  which  inspired  the  crusaders  who  followed  Peter 
the  Hermit,  our  silver  Democrats  went  forth  from  victory  unto 
victory  until  they  are  now  assembled,  not  to  discuss,  not  to  debate, 
but  to  enter  up  the  judgment  already  rendered  by  the  plain  people 
of  this  country.  In  this  contest  brother  has  been  arrayed  against 
brother,  father  against  son.  The  warmest  ties  of  love,  acquaintance 
and  association  have  been  disregarded;  old  leaders  have  been  cast 
aside  when  they  refused  to  give  expression  to  the  sentiments  of  those 
whom  they  would  lead,  and  new  leaders  have  sprung  up  to  give  direc- 
tion to  this  cause  of  truth.  Thus  has  the  contest  been  waged,  and  we 
have  assembled  here  under  as  binding  and  solemn  instructions  as  were 
ever  imposed  upon  representatives  of  the  people.  .  .  . 

And  now,  my  friends,  let  me  come  to  the  paramount  issue.  If 
they  ask  us  why  it  is  that  we  say  more  on  the  money  question 
than  we  say  upon  the  tariff  question,  I  reply  that,  if  protection 


724  READINGS  IN  ECONOMIC  HISTORY 

has  slain  its  thousands,  the  gold  standard  has  slain  its  tens  of 
thousands.  If  they  ask  us  why  we  do  not  embody  in  our  platform 
all  the  things  that  we  believe  in,  we  reply  that  when  we  have 
restored  the  money  of  the  Constitution  all  other  necessary  reforms 
will  be  possible;  but  that  until  this  is  done  there  is  no  other  reform 
that  can  be  accomplished. 

Why  is  it  that  within  three  months  such  a  change  has  come  over 
the  country?  Three  months  ago,  when  it  was  confidently  asserted 
that  those  who  believe  in  the  gold  standard  would  frame  our  platform 
and  nominate  our  candidates,  even  the  advocates  of  the  gold  standard 
did  not  think  that  we  could  elect  a  President.  And  they  had  good 
reason  for  their  doubt,  because  there  is  scarcely  a  State  here  to-day 
asking  for  the  gold  standard  which  is  not  in  the  absolute  control  of 
the  Republican  party.  .  .  . 

You  come  to  us  and  tell  us  that  the  great  cities  are  in  favor  of  the 
gold  standard;  we  reply  that  the  great  cities  rest  upon  our  broad  and 
fertile  prairies.  Burn  down  your  cities  and  leave  our  farms,  and  your 
cities  will  spring  up  again  as  if  by  magic;  but  destroy  our  farms  and 
the  grass  will  grow  in  the  streets  of  every  city  in  the  country. 

My  friends,  we  declare  that  this  nation  is  able  to  legislate  for  its 
own  people  on  every  question,  without  waiting  for  the  aid  or  consent 
of  any  other  nation  on  earth;  and  upon  that  issue  we  expect  to  carry 
every  State  in  the  Union.  I  shall  not  slander  the  inhabitants  of  the 
fair  State  of  Massachusetts  nor  the  inhabitants  of  the  State  of  New 
York  by  saying  that,  when  they  are  confronted  with  the  proposition, 
they  will  declare  that  this  nation  is  not  able  to  attend  to  its  own  busi- 
ness. It  is  the  issue  of  1776  over  again.  Our  ancestors,  when  but 
three  millions  in  number,  had  the  courage  to  declare  their  political 
independence  of  every  other  nation;  shall  we,  their  descendants, 
when  we  have  grown  to  seventy  millions,  declare  that  we  are  less  inde- 
pendent than  our  forefathers?  No,  my  friends,  that  will  never  be  the 
verdict  of  our  people.  Therefore,  we  care  not  upon  what  lines  the 
battle  is  fought.  If  they  say  bimetallism  is  good,  but  that  we  cannot 
have  it  until  other  nations  help  us,  we  reply  that,  instead  of  having 
a  gold  standard  because  England  has,  we  will  restore  bimetallism,  and 
then  let  England  have  bimetallism  because  the  United  States  has  it. 
If  they  dare  to  come  out  in  the  open  field  and  defend  the  gold  standard 
as  a  good  thing,  we  will  fight  them  to  the  uttermost.  Having  behind 
us  the  producing  masses  of  this  nation  and  the  world,  supported  by 
the  commercial  interests,  the  laboring  interests,  and  the  toilers  every- 
where, we  will  answer  their  demand  for  a  gold  standard  by  saying  to 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         725 

them:  You  shall  not  press  down  upon  the  brow  of  labor  this  crown 
of  thorns,  you  shall  not  crucify  mankind  upon  a  cross  of  gold. 

V.  THE  MONETARY  STOCK 

A.    The  Trade  Dollar,  1873-1878  1 

The  coinage  act  of  1873,  which  had  omitted  any  mention  of  the  standard 
silver  dollar,  provided  for  coining  a  trade  dollar  of  420  grains  to  be  circulated 
in  the  Orient.  The  extent  to  which  it  was  used  and  the  manner  of  speculating 
in  it  were  set  forth  in  a  leading  financial  journal  as  follows: 

To  what  extent  the  trade  dollar  has  been  used  in  a  speculative 
way  —  buying  it,  approximately,  by  weight,  and  replacing  it  in  cir- 
culation by  tale  —  there  are  no  means  of  knowing.  Its  circulation, 
as  will  be  apparent  to  everybody  who  takes  note  of  his  own  experience, 
has  been  large  since  the  decline  in  silver,  about  18  months  ago,  per- 
mitted it;  on  the  other  hand,  although  over  n  millions  of  the  new 
"standard"  dollars  have  been  coined  since  last  February  —  while 
but  8  millions  of  the  "dollar  of  our  fathers"  were  coined,  from  1793 
to  1873  —  only  a  little  more  than  one  million  of  them  have  as  yet  been 
got  into  circulation  and  their  appearance  in  retail  trade  is  not  at  all 
common.  The  Government  is  entirely  free  from  fault  as  regards  the 
trade  dollar,  for  it  will  be  noticed  that  its  action  was  simply  this: 
to  convert,  into  trade  dollars,  for  its  owners,  any  silver  bullion  pre- 
sented, at  actual  cost,  leaving  the  parties  receiving  them  to  dispose  of 
them  as  they  could;  Government  neither  received  them  nor  paid 
them  out,  simply  stamping  and  returning  them.  By  the  same  abused 
act  of  1873,  which  "demonetized"  the  old  412^  grain  dollar  by  omit- 
ting it  from  the  list  of  coins,  the  trade  dollar  was  both  authorized  and 
was  made  legal  tender;  but  no  wrong  was  done  by  this,  because  it 
was  then  worth  more  than  100  cents  and  the  subsequent  decline  of 
silver  was  not  foreseen.  The  law  contemplated  the  exclusive  use  of 
the  coin  in  export  trade;  at  least  once  before  the  present  time,  upon 
its  appearing  that  the  supply  exceeded  the  demand  for  that  purpose, 
the  coinage  was  suspended.  Obviously,  Government  had  no  power 
to  control  the  course  of  the  coin,  and  in  abrogating  its  legal-tender 
quality  as  soon  as  another  use  for  it  was  opened,  and  now  in  suspending 
its  coinage,  has  done  all  which  could  be  demanded. 

Still,  the  question  remains,  what  is  to  be  done  with  the  trade  dollars, 
which  are  now  at  a  discount  and  are  liable  to  become  a  nuisance. 


Commercial  and  Financial  Chronicle  (New  York,  1878),  XXVII,  187. 


726  READINGS  IN  ECONOMIC  HISTORY 

Some  urge  that  Government  is  legally  bound  to  redeem,  at  their  face, 
all  dollars  coined  before  July  22,  1876.  There  were  coined,  in  1874, 
$3,588,900;  in  1875,  $5,697,500;  in  1876,  $6,132,050;  in  1877,  $9,162,- 
900;  and  if  the  statement  in  a  Washington  dispatch  is  correct  that  the 
total  is  $35,959,360,  there  must  have  been  $11,378,010  coined  during 
the  fiscal  year  just  ended.  The  rate  of  coinage  increased  yearly; 
the  early  coinage,  of  course,  went  to  the  East,  and  it  is  impossible  to 
ascertain  how  much  of  the  total  is  within  the  country,  although 
it  is  probable  that  the  bulk  of  it  is  of  issues  since  the  resolution  of 
1876,  about  two-thirds  of  the  whole  having  probably  been  put  out 
since  then.  It  is  also  urged,  and  with  some  reason,  it  appears  to  us, 
that,  as  a  matter  of  equity,  Government  ought  to  take  them  all  at 
par,  or  at  least  to  exchange  them  for  the  standard  dollar,  piece  for 
piece;  this  latter  course  will  probably  be  proposed  to  Congress  next 
winter,  unless  the  price  of  silver  changes  in  the  interim,  and  it 
is  the  one  which,  under  the  circumstances,  ought  to  be  adopted, 
for  the  sake  of  innocent  holders  who  have  taken  these  coins  as 
"dollars,"  knowing  only  that  they  bear  the  Government  stamp, 
which,  by  the  theory  of  these  days,  is  held  to  be  potent  to  "make" 
anything  a  good  dollar  on  which  it  is  imprinted.  As  it  will  be  im- 
practicable to  distinguish  between  holders,  the  speculative  one 
would  have  to  be  allowed  to  make  his  profit,  for  the  sake  of  protect- 
ing the  innocent  one. 

To  receive  the  trade  dollar  for  the  standard  one,  at  Government 
offices,  will  end  the  trouble;  but  how  could  clearer  and  more  public 
testimony  be  given  to  show  the  unnecessary  muddle  into  which  the 
folly  of  Congress  has  brought  the  coinage?  In  retiring  the  trade 
dollar  the  Government  will  "father"  a  dollar  which  it  never  issued, 
legally  speaking,  and  never  intended  for  circulation.  Government 
will  also  give  the  less  for  the  greater,  although  the  difference  will  be 
less  than  exists  under  the  present  arrangement  for  buying  bullion; 
speaking  approximately,  Government  will  then  give  an  88-cent  in 
exchange  for  a  go-cent  dollar,  piece  for  piece,  whereas  now  it  only 
offers  to  pay  90  cents  for  the  latter,  in  88-cent  dollars.  .  .  . 

B.   Kinds  and  Amounts  of  Money  in  Circulation,  1860-1893  1 

At  the  outbreak  of  the  Civil  War  but  two  kinds  of  money  circulated  in  the 
United  States,  namely,  specie  and  state  bank  note.  From  time  to  time  additions 
were  made  to  the  money  stock  both  in  amounts  and  kinds.  Conditions  for  typical 
years  were  as  follows: 

1  Treasury  Report,  1893  (Washington,  1893),  CVIII,  CXI,  CXII,  CXV. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         727 

July  i,   1860 
(Population,  31,443,321;   circulation  per  capita,  $13.85) 


General  stock 
coined  or 

issued 

In  Treasury 

Amount  in 
circulation 

Specie 

§235  ooo  ooo 

$6  695  225 

$228  3O4.  77^ 

State-bank  notes. 

2O7   IO^  4.77 

2O7  IO2.4.77 

$422,102,477 

$6,695,225 

$435,407,252 

July  i,  1862 
(Population,  32,704,000;   circulation  per  capita,  $10.23) 


State-bank  notes  .  . 

$183  702  O70 

$183  702  070 

United  States  notes 

06  62O  OOO               $23  7:!4,33:i 

72  86s  665 

Demand  notes  

53,O4O,OOO 

^  O4.O  OOO 

Add:   Specie  in  circulation 

$333,452,079               $23,754,335 

on  the  Pacific  coast 

$309,697,744 
25,000,000 

$334,697,744 

July  i,   1863 
(Population,  33,365,000;   circulation  per  capita,  $17.84) 

Fractional  currency $20,192,456  $4,308,074  $15,884,382 

State-bank  notes 238,677,218             238,677,218 

United  States  notes 387,646,589  75,165,171  312,481,418 

Demand  notes 3,351,020             3,351,020 

$649,867,283          $79,473,245        $570,394,038 
Add:   Specie  in  circulation  on  the  Pacific  coast 25,000,000 

$595,394,038 

July  i,  1864 
(Population,  34,046,000;    circulation  per  capita,  $19.67) 


Fractional  currency  

$22.894,877 

$3,762,376 

$19,132,501 

State-bank  notes 

179,157,717 

179,157,717 

United  States  notes   . 

447,300,203 

32,184,213 

415,115,990 

National-banks  note 

31,23s,  27O 

31,23^,270 

Add'   Specie  in  circulation  on 

$680,588,067 

the  Pacific  coast.  .  .  . 

$35,946,589 

$644,641,478 
25,000,000 

$669,641,478 


728 


READINGS  IN  ECONOMIC  HISTORY 


July  i,  1878 
(Population,  47,598,000;   circulation  per  capita,  $15.32) 


General  stock 
coined  or 
issued 

In  Treasury 

Amount  in 
circulation 

Standard  silver  dollars,  includ- 
ing bullion  in  Treasury.  .  . 
Subsidiary  silver 

$16,269,079 
60,778,828 
1,462,600 
16,547,769 
346,681,016 
324,514,284 

$15,059,828 
6,860,506 
1,455,520 
180,044 
25,775,121 
12,789,923 

$1,209,251 
53,918,322 
7,080 
16,367,725 
320,905,895 
311,724,361 

Silver  certificates  

Fractional  currency  

United  States  notes.  . 

National-bank  notes.  .   . 

Add:   Specie  in  circulation  on  the 

$766,253,576 
Pacific  coast.  .  . 

$62,120,942 

$704,132,634 
25,000,000 

$729,132,634 

July  i,  1879 
(Population,  48,866,000;   circulation 

per  capita,  $16.75) 

Gold  coin,  including  bullion  in 
Treasury 

$245,741,837 

41,276,356 
70,249,985 
iS,4i3,7oo 
2,466,950 
346,681,016 
329,691,697 

$135,236,475 

33,239,917 
8,903,401 
i33,88o 
2,052,470 
45,036,904 
8,286,701 

$110,505,362 

8,036,439 
61,346,584 
15,279,820 
414,480 
301,644,112 
321,404,996 

Standard  silver  dollars,  includ- 
ing bullion  in  Treasury.  .  . 
Subsidiary  silver. 

Gold  certificates.  . 

Silver  certificates.  ...            ... 

United  States  notes  

National-bank  notes.  .    . 

5 

51,051,521,  541 

$232,889,748 

$818,631,793 

July  i,  1893 
(Population,  66,946,000;   circulation  per  capita,  $23.85) 

Gold  coin  including  bullion  in 
Treasury  .   .             

$597,697,685 

538,300,776 
77,415,123 
94,041,189 
330,957,504 

147,190,227 
346,681,016 

12,405,000 
178,713,872 

$189,162,022 

481,371,103 
11,945,257 
1,399,000 
4,133,656 

6,334,6i3 
27,621,590 

690,000 
4,043,906 

$408,535,663 

56,929,673 
65,469,866 
92,642,189 
326,823,848 

140,855,614 
319,059,426 

11,715,000 
174,669,966 

Standard  silver  dollars,  includ- 
ing bullion  in  Treasury.  .  . 
Subsidiary  silver  

Gold  certificates  

Silver  certificates  

Treasury    notes,    act    July    14, 
1890.  ...                    

United  States  notes  

Currency  certificates,  act  June 
8,  1872  

National-bank  notes 

Total  

$2,323,402,392 

$726,701,147     $1,596,701,245 

FINANCIAL  HISTORY,   MONEY  AND   BANKING         729 


VI.  PANICS  AND  CRISES 

'  A.    The  Panic  of  1873  1 

During  the  past  hundred  years  the  United  States  has  suffered  severely  from 
several  panics  and  crises.  The  first  came  in  1819.  Others  followed  more  or  less 
periodically  in  1837,  1857,  1873,  1884,  1893  and  1907.  Of  these  one  of  the  most 
severe  occurred  in  1873.  A  detailed  description  of  conditions  follows: 

The  monetary  crisis  of  1873  may  be  said  to  have  had  its  beginning 
in  New  York  City  on  September  8,  by  the  failure  of  the  Warehouse 
Security  Company,  and  of  two  houses  which  had  left  their  regular 
business  to  embark  in  enterprises  foreign  thereto,  which  were  followed 
on  the  I3th  by  the  failure  of  a  large  firm  of  stock-brokers.  On  the 
1 8th  and  igth  two  of  the  largest  banking-houses  in  the  city,  well 
known  throughout  the  country,  and  which  were  interested  in  the  nego- 
tiations of  large  amounts  of  railroad  securities,  also  failed;  and  on 
the  2oth  of  the  same  month  the  failures  of  the  Union  Trust  Company, 
the  National  Trust  Company,  the  National  Bank  of  the  Common- 
wealth, and  three  other  well-known  banking-houses  were  announced. 
On  the  same  day  the  New  York  Stock  Exchange,  for  the  first  time  in 
its  existence,  closed  its  doors,  and  they  were  not  again  opened  for  a 
period  of  ten  days,  during  which  period  legal-tender  notes  commanded 
a  premium  over  certified  checks  of  from  one-fourth  of  one  per  cent, 
to  three  per  cent.  An  active  demand  for  deposits  commenced  on  the 
1 8th,  and  increased  rapidly  during  the  igth  and  2oth,  chiefly  from  the 
country  correspondents  of  the  banks;  and  their  drafts  continued 
to  such  an  extent,  "  calling  back  their  deposits  in  a  medium  never 
before  received,"  that  the  reserves  of  the  banks  were  alarmingly 
reduced. 

The  "call  loans,"  amounting  to  more  than  sixty  millions  of  dollars, 
upon  which  the  banks  relied  to  place  themselves  in  funds  in  such  an 
emergency,  were  entirely  unavailable,  because  the  means  of  the  bor- 
rowers, upon  the  realization  of  which  they  depended  to  repay  their 
loans  were,  to  a  great  extent,  pledged  with  the  banks.  These  col- 
laterals could  in  ordinary  times  have  been  sold,  but  at  that  moment 
no  market  could  be  found  except  at  ruinous  sacrifices.  Had  there 
been  a  market,  the  payments  would  have  been  made  in  checks 
upon  the  associated  banks,  which  would  not  have  added  to  the 
general  supply  of  cash.  A  meeting  of  the  clearing  house  association 
was  called,  and  on  Saturday  evening,  September  20,  the  following 

1  Treasury  Report,  1873  (Washington,  1873),  9°~2- 


730  READINGS  IN  ECONOMIC  HISTORY 

plan  for  facilitating  the  settlement  of  balances  at  the  clearing-house 
was  unanimously  adopted: 

In  order  to  enable  the  banks  of  this  association  to  afford  such  additional  assist- 
ance to  the  business  community,  and  also  for  the  purpose  of  facilitating  the  settle- 
ment of  the  exchanges  between  the  banks,  it  is  proposed  that  any  bank  in  the 
clearing-house  association,  may,  at  its  option,  deposit  with  a  committee  of  five 
persons,  to  be  appointed  for  that  purpose,  an  amount  of  its  bills  receivable,  or  other 
securities  to  be  approved  by  said  committee,  who  shall  be  authorized  to  issue  there- 
for to  said  depositing  bank  certificates  of  deposit,  bearing  interest  at  seven  per  cent. 
per  annum,  in  denominations  of  five  and  ten  thousand  dollars,  such  as  may  be  de- 
sired, to  an  amount  not  in  excess  of  seventy-five  per  cent,  of  the  securities  or  bills 
receivable  so  deposited. 

Except  when  the  securities  deposited  shall  consist  of  either  United  States  stocks 
or  gold  certificates,  the  certificates  of  deposit  may  be  issued  upon  the  par  value  of 
such  securities. 

These  certificates  may  be  used  in  settlement  of  balances  at  the  clearing-house 
for  a  period  not  to  extend  beyond  the  first  of  November  proximo,  and  they  shall  be 
received  by  creditor  banks  during  that  period  daily,  in  the  same  proportion  as  they 
bear  to  the  aggregate  amount  of  the  debtor  balances  paid  at  the  clearing-house. 

The  interest  which  may  accrue  upon  these  certificates  shall,  on  the  ist  day  of 
November  next,  or  sooner,  should  the  certificates  all  be  redeemed,  be  apportioned 
among  the  banks  which  shall  have  held  them  during  that  time. 

The  securities  deposited  with  the  committee,  as  above  named,  shall  be  held 
by  them  as  a  special  deposit,  pledged  for  the  redemption  of  the  certificates 
issued  thereon. 

The  committee  shall  be  authorized  to  exchange  any  portion  of  said  securities 
for  an  equal  amount  of  others,  to  be  approved  by  them,  at  the  request  of  the  depos- 
iting bank,  and  shall  have  power  to  demand  additional  security,  either  by  an  ex- 
change or  an  increased  amount,  at  their  discretion. 

The  amount  of  certificates  which  this  committee  may  issue  as  above  shall  not 
exceed  ten  million  dollars. 

This  arrangement  shall  be  binding  upon  the  clearing-house  association  when 
assented  to  by  three-fourths  of  its  members. 

The  banks  shall  report  to  the  manager  of  the  clearing-house  every  morning  at 
10  o'clock  the  amount  of  such  certificates  held  by  them. 

That,  in  order  to  accomplish  the  purposes  set  forth  in  this  arrangement,  the 
legal  tenders  belonging  to  the  associated  banks  shall  be  considered  and  treated  as 
a  common  fund,  held  for  mutual  aid  and  protection,  and  the  committee  appointed 
shall  have  power  to  equalize  the  same  by  assessment,  or  otherwise,  at  their  dis- 
cretion. 

For  this  purpose  a  statement  shall  be  made  to  the  committee  of  the  condition 
of  each  bank  on  the  morning  of  every  day,  before  the  commencement  of  business, 
which  shall  be  sent  with  the  exchanges  to  the  manager  of  the  clearing-house, 
specifying  the  following  items: 

ist.    Amount  of  loans  and  discounts. 

2d.     Amount  of  loan  certificates. 

3d.     Amount  of  United  States  certificates  of  deposit  and  legal-tender  notes. 

4th.  Amount  of  deposits,  deducting  therefrom  the  amount  of  special  gold 
deposits. 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         731 

The  suspension  of  currency  payments  followed  and  was  at  first 
confined  to  the  banks  of  New  York  City,  but  afterward  extended  to 
other  large  cities  because  the  New  York  banks  could  not  respond  to 
the  demands  of  their  correspondents  in  those  cities,  and  these,  in 
turn,  could  not  respond  to  the  demands  of  their  correspondents. 
Exchange  on  New  York,  which  would  otherwise  have  commanded  a 
slight  premium,  was  at  a  discount,  and  to  a  considerable  extent  un- 
available. The  suspension  of  the  banks  in  other  leading  cities,  almost 
without  exception,  therefore  followed,  and  their  partial  or  entire  sus- 
pension continued  for  forty  days,  until  confidence  was  in  a  measure 
restored  by  the  resumption  of  the  New  York  City  banks  on  the  first 
day  of  November. 

Although  predictions  had  been  made  of  the  approach  of  a  financial 
crisis,  there  were  no  apprehensions  of  its  immediate  occurrence.  On 
the  contrary  there  were  in  almost  every  direction  evidences  of  pros- 
perity. The  harvest  was  nearly  or  quite  completed,  and  the  bins  and 
granaries  were  full  to  overflowing.  The  manufacturing  and  mining 
Interests  had  also  been  prosperous  during  the  year,  and  there  was 
good  promise  that  the  fall  trade,  which  had  opened,  would  be  as  large 
as  during  previous  years.  The  value  of  the  cereals,  potatoes,  tobacco, 
and  hay  for  1872,  is  estimated  by  the  Department  of  Agriculture  at 
$1,324,385,000.  It  is  supposed  that  the  value  of  these  products  for 
the  present  year,  a  large  portion  of  which  was  at  this  time  ready  for 
sale  and  awaiting  shipment  to  market,  will  not  vary  materially  from 
the  above-mentioned  estimate  of  last  year.  An  estimate  based  upon 
the  census  returns  of  1869  gives  the  probable  aggregate  value  of  the 
marketable  products  of  industry  for  that  year  at  $4,036,000,000, 
and  a  similar  estimate  upon  the  same  basis,  and  upon  returns  to  the 
Agricultural  Department,  gives  an  increase  of  $1,788,000,000  for  1873 
over  the  amount  for  1868. 

It  is  not  the  province  of  the  Comptroller  to  explain  the  causes  which 
led  to  this  suspension.  In  order  to  enter  upon  such  an  explanation 
it  would  be  necessary  to  obtain  comparative  data  for  a  series  of  years 
in  reference  to  the  imports  and  exports,  the  products  of  industry, 
the  issue  of  currency  and  other  evidences  of  debt,  and,  in  fact,  a  gen- 
eral discussion  of  the  political  economy  of  the  country.  The  imme- 
diate cause  of  the  crisis  is,  however,  more  apparent.  The  money 
market  had  become  overloaded  with  debt,  the  cost  of  railroad  con- 
struction for  five  years  past  being  estimated  to  have  been  $1,700,000,- 
ooo,  or  about  $340,000,000  annually;  while  debt  based  upon  almost 
every  species  of  property  —  State,  city,  town,  manufacturing  cor- 


732  READINGS  IN  ECONOMIC  HISTORY 

porations,  and  mining  companies  —  had  been  sold  in  the  market. 
Such  bonds  and  stocks  had  been  disposed  of  to  a  considerable  extent 
in  foreign  markets,  and  so  long  as  this  continued  the  sale  of  similar 
securities  was  stimulated,  and  additional  amounts  offered.  When 
the  sale  of  such  securities  could  no  longer  be  effected  abroad,  the  bonds 
of  railroads  and  other  enterprises  of  like  nature  which  were  in  process 
of  construction  were  thus  forced  upon  the  home  market,  until  their 
negotiation  became  almost  impossible.  The  bankers  of  the  city  of 
New  York,  who  were  burdened  with  the  load,  could  not  respond  to 
the  demands  of  their  creditors,  the  numerous  holders  of  similar  securi- 
ties became  alarmed,  and  the  panic  soon  extended  throughout  the 
country. 

B.    The  Financial  Crisis  of  1884  l 

In  1884  occurred  a  financial  crisis,  caused,  as  is  generally  believed,  by  an  over- 
investment in  railroad  building.  The  Comptroller  of  the  Currency  reported  on 
the  situation  at  the  time  as  follows: 

Owing  to  the  large  number  of  mercantile  failures  which  had 
occurred  during  1883,  considerable  financial  uneasiness  was  felt  at  the 
beginning  of  1884,  and  the  year  opened  inauspiciously,  by  the  appoint- 
ment on  January  i  of  a  receiver  for  the  New  York  and  New  England 
Railroad.  Following  closely  upon  this  failure  were  the  troubles  of 
the  Oregon  and  Transcontinental  Company,  and  the  appointment  on 
January  12  of  a  receiver  for  the  North  River  Construction  Company. 
The  months  of  February,  March,  and  April  were  characterized  by 
many  commercial  failures,  rumors  affecting  the  credit  of  various  cor- 
porations, and  a  still  further  depreciation  in  price  of  stocks  and  bonds, 
and  in  fact  of  all  products  and  commodities. 

This  feeling  of  uneasiness  and  of  uncertainty  as  to  value  culminated 
on  May  6  with  the  failure  of  the  Marine  National  Bank  of  New 
York  whose  president  was  a  member  of  the  firm  of  Grant  &  Ward. 
The  failure  of  this  firm  immediately  followed,  and  owing  to  the  promi- 
nence of  some  of  its  members  and  its  large  liabilities,  exceeding 
$17,000,000,  its  failure  caused  great  excitement,  that  had  not  subsided 
when  on  May  13  the  president  of  the  Second  National  bank  of  New 
York  was  discovered  to  be  a  defaulter  to  the  extent  of  $3,185,000. 
Although  this  defalcation  was  immediately  made  good  by  the  directors 
of  the  bank  and  did  not  result  in  its  suspension  or  failure,  such  a 
shock  was  given  to  credit,  and  the  confidence  of  the  public  in  all 
institutions  and  firms  supposed  to  have  loaned  money  upon  such  rail- 

1  Report  of  the  Comptroller  of  the  Currency,  1884  (Washington,  1884),  32-5. 


FINANCIAL  HISTORY,   MONEY  AND  BANKING         733 

road  and  other  securities  as  had  greatly  decreased  in  value  or  whose 
managers  were  supposed  to  be  directly  or  indirectly  interested  in 
speculation  in  Wall  Street,  was  so  shaken,  that  there  was  great  pressure 
to  sell  stocks  and  securities  and  an  active  demand  on  the  banks  for 
deposits.  .  .  . 

The  crisis  of  May,  1884,  seems  to  have  been  even  more  unexpected 
to  the  country  than  that  of  September,  1873.  Although  many  con- 
servative people  had  predicted  that  the  large  increase  in  railroad  and 
other  securities,  and  the  general  inflation  which  had  been  going  on 
for  a  number  of  years  would  bring  financial  troubles  and  disasters 
to  the  country,  it  was  nevertheless  generally  believed  that  the  depre- 
ciation of  values  and  the  liquidation  which  had  already  been  going 
on  for  many  months,  and  the  further  facts  that  the  country  was  doing 
business  upon  a  gold  basis,  that  the  prices  of  all  commodities  were 
already  very  low,  that  an  increased  area  of  territory  was  under  cultiva- 
tion, and  that  the  prospects  were  excellent  for  good  crops,  together 
with  the  larger  distribution  of  wealth  throughout  the  Union,  would 
prevent  a  repetition  of  the  panic  of  1873.  This  general  belief  was 
measurably  correct,  as  the  panic  or  crisis  was  confined  principally 
to  New  York  City,  although  its  effects  were  more  or  less  felt  in  all 
parts  of  the  country,  and  the  liquidation  resulting  therefrom  has  not 
yet  been  fully  completed. 

The  most  profound  students  of  political  economy  have  for  many 
years  endeavored  to  explain  the  causes  which  have  led  to  financial 
troubles  similar  to  those  of  1857,  1873,  and  1884,  and  it  is  not  to  be 
expected  that  the  Comptroller  can  obtain  sufficient  data  to  enter  into 
a  complete  and  satisfactory  explanation  of  the  causes  of  the  financial 
disturbances  of  the  present  year.  The  causes  that  lead  to  financial 
crises  in  a  country  so  rich  in  agriculture,  of  which  the  manufacturing 
and  mining  interests  are  so  varied  and  important,  the  imports  and 
exports  so  great,  of  so  extensive  an  area  of  territory,  and  in  which 
wealth  is  becoming  so  equally  distributed,  and  the  population  of  which 
is  increasing  so  rapidly,  are  difficult  to  explain,  and  the  issue  of  cur- 
rency and  creation  of  debt  require  elaborate  study  to  ascertain  the 
reasons  for  the  rise  and  fall  in  value  of  commodities  and  realty  which 
cause  a  panic.  It  is  scarcely  possible  at  this  time  to  explain  why  it 
should  be  necessary  for  the  country  to  go  through  the  liquidation  and 
financial  trouble  which  is  now  being  experienced. 

It  is  apparent,  however,  that  a  repetition  of  some  of  the  same 
circumstances  which  brought  about  the  monetary  crisis  of  1873  has 
been  largely  influential  in  causing  the  present  crisis.  Property  of  all 


734  READINGS  IN  ECONOMIC  HISTORY 

kinds  had  been  capitalized,  as  it  is  called;  bonds  and  stocks  had  been 
issued  for  the  purpose  of  building  railroads,  carrying  on  manufactur- 
ing and  other  business;  municipal  and  other  bonds  had  been  issued 
for  public  improvements.  These  bonds  and  stocks  were  put  upon 
the  market,  and  commercial  credit  was  extended  until  a  point  was 
reached  where  capitalists  of  this  and  other  countries  questioned  the 
intrinsic  value  of  these  securities  and  the  earning  power  of  the  property 
on  which  they  were  based,  and  also  doubted  the  solvency  of  many 
firms  in  commercial  business.  This  lack  of  confidence  induced  them 
to  decline  to  make  farther  advances  or  investments.  A  decrease  in 
the  earnings  of  railroads,  manufacturing,  and  other  enterprises  fol- 
lowed, and  the  entire  business  of  the  country  has  consequently  been 
restricted  and  deadened. 

There  is  little  doubt  that  one  of  the  causes  which  led  to  the  local 
disturbances  among  the  banks,  national  and  State,  and  private  bankers 
of  the  city  of  New  York,  was  their  intimate  relation  in  many  instances 
to  the  New  York  Stock  Exchange,  and  the  fact  that  a  large  portion  of 
the  loans  made  by  the  banks  and  bankers  of  New  York  were  based 
upon  the  security  of  stocks  and  bonds,  often  speculative  in  their 
character,  which  are  dealt  in  and  regularly  called  at  the  Stock 
Board.  .  .  . 

Just  what  restrictions  should  be  placed  upon  the  business  of  the 
New  York  Stock  Exchange,  or  what  legislation  should  be  had,  is 
difficult  to  determine.  Just  how  far  the  Federal  or  State  law  can 
interfere  with  the  business  of  private  citizens  is  a  delicate  and  difficult 
matter  to  settle. 

C.    The  Panic  of  1907  l 

The  Panic  of  1907,  which  is  often  referred  to  as  the  "rich  man's  panic,"  was 
severe  while  it  lasted.  Yet  it  is  generally  believed  that  it  would  have  been  still 
more  severe  had  the  financial  interests  of  the  country  not  combined  for  protection. 
Thus  in  New  York,  for  example,  the  leading  banks,  through  the  medium  of  the 
clearing  house  association,  issued  an  emergency  currency,  designated  as  clearing 
house  certificates.  A  view  of  the  panic  by  the  Comptroller  of  the  Currency 
follows: 

Certainly  since  as  long  ago  as  the  date  of  the  San  Francisco  catas- 
trophe there  has  been  no  lack  of  warning  indications  of  financial 
troubles  and  possible  business  disaster.  For  at  least  ten  or  twelve 
years  there  has  been  an  era  of  advancing  prices  and  great  industrial, 
commercial,  and  speculative  activity  in  all  the  countries  of  the  world. 


Report  of  the  Comptroller  of  the  Currency,  1907  (Washington,  1907),  69-71. 


FINANCIAL  HISTORY,   MONEY   AND   BANKING         735 

Credits  have  increased  and  multiplied  until  the  limit  has  been  reached 
in  the  amount  of  reserve  money  on  which  they  must  be  based. 

For  at  least  two  or  three  years,  however,  it  has  been  becoming 
more  and  more  evident  that  there  must  soon  be  a  slackening  of  pace 
if  we  were  to  avoid  a  general  and  universal  crisis  in  financial  and  com- 
mercial affairs.  These  conditions  have  been  world-wide  and  not  by 
any  means  confined  to  the  United  States.  Crises  of  more  or  less 
severity  have  arisen  in  several  important  countries.  As  is  always 
the  case  when  there  is  a  demand  for  liquidation,  it  first  manifested 
itself  in  the  stock  market.  For  months  there  has  been  a  more  or  less 
steady  decline  in  stock-market  quotations.  Not  only  stocks,  but  the 
very  best  bonds,  have  dropped  lower  and  lower  in  price.  The  diffi- 
culty in  selling  bonds  has  become  so  great  that  for  several  years  many 
of  the  railways  have  had  to  raise  money  for  their  necessary  expendi- 
tures and  improvements  with  so-called  short  time  notes,  instead  of 
regular  bond  issues,  the  rates  of  interest  on  such  issues  rising  higher 
and  higher  and  each  issue  being  harder  to  place.  Merchants  and 
manufacturers  of  the  highest  standing  and  credit  have  found  it  more 
and  more  difficult  to  secure  or  renew  loans  and  the  rates  have  risen 
steadily  for  months  past. 

With  such  conditions  existing  we  approached  the  autumn  crop- 
moving  period,  when  there  is  always  more  or  less  disturbance  of  credit 
on  account  of  currency  shipments  and  withdrawals  of  balances  from 
the  reserve  cities.  For  a  time  it  seemed  as  if  there  were  good  reason 
to  hope  that  there  might  be  no  more  than  a  gradual  liquidation  which 
might  be  conducted  in  detail,  one  interest  or  line  at  a  time,  beginning 
with  the  stock  market,  and  that  while  there  might  be  a  general  de- 
cline in  the  volume  of  trade  and  the  gradual  liquidation  of  credits, 
it  would  not  develop  into  a  bank  or  commercial  crisis.  But  during 
the  month  of  October  the  collapse  of  a  highly  speculative  corner  in 
stocks,  dealt  in  on  the  "curb"  in  New  York  —  not  even  listed  on  any 
regular  exchange  —  brought  suspicion  upon  an  old,  well-established 
national  bank  in  the  city  of  New  York.  Although  examinations 
by  the  national-bank  examiners  and  the  New  York  clearing  house 
committee  showed  this  bank  to  be  entirely  solvent,  with  its  large  capi- 
tal and  a  considerable  surplus  still  beyond  question  intact,  public 
interest  had  been  aroused  to  such  an  extent  that  runs  developed  in 
New  York  City  on  a  number  of  other  banks  and  trust  companies  and 
some  national  banks  between  which  and  the  bank  first  under  attack 
there  was  known  to  be  community  of  ownership  and  management. 
The  national  banks  of  New  York  City  were  all  found  to  be  solvent 


736  READINGS  IN  ECONOMIC  HISTORY 

by  the  clearing  house  committee,  and  being  supported  by  the  clearing 
house  banks  none  failed. 

But,  unfortunately,  a  few  other  banks  and  trust  companies  were 
not  in  such  good  condition,  and  many  of  them,  not  being  members  of 
the  clearing  house  or  any  similar  association,  they  were  not  so  well 
prepared  for  cooperation  and  support  of  each  other.  The  Knicker- 
bocker Trust  Company,  with  $1,200,000  of  capital  and  $48,387,000 
of  deposits,  closed  its  doors  on  October  22,  and  this  was  followed  by 
a  large  number  of  failures  among  smaller  banks  and  trust  companies. 
During  the  months  of  October  and  November  ten  State  banks  and 
trust  companies,  two  of  which  have  since  resumed,  closed  their  doors 
in  New  York  City  and  vicinity.  There  were  long  and  serious  runs  on 
two  large  trust  companies,  which  were  only  kept  from  failure  by  the 
support  of  the  other  trust  companies  and  the  clearing-house  banks. 
One  national  bank,  the  First  National  Bank  of  Brooklyn,  which  was 
clearing-house  agent  for  two  large  trust  companies  in  Brooklyn 
which  had  failed,  was  compelled  to  close  its  doors  on  October  25  in 
order  to  avoid  the  responsibility  for  the  clearings  of  these  trust  com- 
panies, and  is  now  in  the  hands  of  a  receiver. 

On  October  26  the  New  York  clearing-house  banks  decided  to  issue 
clearing-house  certificates  for  use  in  the  payment  of  balances,  and  to 
limit,  if  not  suspend,  the  shipment  of  currency  to  out-of-town  banks. 
In  this  the  New  York  banks  were  followed  by  those  of  the  other  cen- 
tral reserve  and  most  of  the  reserve  cities.  The  result  was  to  at  once 
precipitate  a  most  serious  bank  crisis  and  a  famine  of  currency  for 
pay  rolls  and  other  necessary  cash  transactions.  All  domestic  ex- 
changes were  at  once  thrown  into  disorder  and  the  means  of  remit- 
tance and  collection  were  almost  entirely  suspended.  Money  has  been 
withdrawn  and  hoarded  by  individuals,  corporations,  and  even  more, 
perhaps,  by  the  banks  themselves,  all  of  whom  at  once  drew  and  held 
all  the  money  of  any  kind  they  could  obtain,  often  really  in  larger 
sums  than  needed. 

It  has  been  one  of  the  peculiar  features  of  the  situation  that  there 
has  actually  been  more  of  a  panic  among  the  banks  themselves  than 
there  has  been  among  the  people.  The  banks  have  been  fearful  as 
to  what  might  develop,  and  finding  their  usual  reserve  deposits  only 
partially  available,  if  available  at  all,  they  have  been  compelled  in 
self-protection  to  gather  from  every  source  all  the  money  they  could 
possibly  reach  and  to  hold  on  to  it  by  refusing  payment  wherever 
it  is  possible  and  satisfying  their  customers  with  the  smallest  possible 
amount  of  cash.  It  has  been  remarkable  how  patiently  and  with 


FINANCIAL  HISTORY,   MONEY  AND   BANKING         737 

what  forbearance  the  people  in  the  business  community  generally 
have  borne  with  the  situation  and  helped  the  banks  to  deal  with  the 
emergency.  With  the  exception  of  the  first  excitement  in  New  York 
and  some  smaller  runs  in  other  places,  there  has  really  been  surprisingly 
little  excitement  or  uneasiness  among  the  people. 

The  greatest  hardship  to  business  generally  has  been  the  derange- 
ment of  the  machinery  for  making  collections  and  remittances.  As 
can  readily  be  seen,  this  has  interfered  with  every  kind  and  class  of 
business  and  led  to  great  curtailment  of  business  operations  of  every 
kind.  Factories  have  suspended,  workmen  have  been  thrown  out 
of  employment,  orders  have  been  canceled,  the  moving  of  crops  has 
been  greatly  retarded  and  interfered  with  and  exports  have  fallen  off 
at  a  time  of  the  year  when  they  should  be  at  their  highest.  Another 
result  has  been  a  reduction  of  the  volume  of  the  foreign  credits  avail- 
able just  at  the  time  they  are  most  needed  to  offset  the  large  imports 
of  gold  which  have  been  made. 


CHAPTER  XXI 
MANUFACTURES,  TARIFF,  AND  TRUSTS,  1860-1915 

I.   MANUFACTURES 

A.   Conditions  of  Industrial  Progress,  igoi  l 

The  fundamental  conditions  of  the  industrial  progress  of  a  country  are  here 
excellently  stated  by  the  Industrial  Commission.  This  commission  was  created  by 
act  of  Congress  in  1898  for  the  purpose  of  investigating  general  industrial  condi- 
tions. For  two  years  they  took  testimony  and  made  investigations  and  in  1900- 
1902  published  their  report  in  nineteen  volumes.  This  constitutes  one  of  our  most 
complete  and  authentic  records  of  recent  industrial  developments. 

The  increase  in  the  manufactures  and  commerce  of  the  United 
States  during  the  past  half  century  has  been  enormous.  It  is  charac- 
teristic of  progress  in  civilization,  with  the  usual  greater  aggregate 
productive  power  on  the  part  of  the  people  which  accompanies  it, 
that  manufactures,  transportation,  and  trade  should  increase  in 
greater  proportion  than  agriculture  and  mining.  The  amount  of 
food  and  other  raw  material  required  increases,  for  the  most  part,  but 
little  more  rapidly  than  the  population.  If  the  productive  power 
of  the  people,  therefore,  increases  by  a  much  higher  ratio,  labor  is 
set  free  from  the  task  of  producing  the  raw  materials,  the  absolute  ne- 
cessities of  life,  and  may  devote  itself  to  elaborating  materials  so  that 
they  shall  supply  higher  needs  and  appeal  to  more  developed  tastes. 
The  employments  of  the  world  thus  become  more  and  more  diversified. 
Because  of  the  wonderful  improvements  in  means  of  production,  the 
same  amount  of  labor  can  accomplish  vastly  more  than  it  could  fifty 
or  one  hundred  years  ago.  A  great  variety  of  new  products  and  new 
services,  unknown  to  the  past  generations,  has  been  introduced,  and 
the  people  generally  are  able  to  enjoy  products  formerly  accessible 
to  the  few  only;  and  the  quality  of  goods,  even  those  consumed  by  the 
poorer  classes,  has  risen  greatly.  .  .  . 

Probably  in  no  other  country  has  the  progress  of  the  industrial 
system  been  so  rapid  as  in  the  United  States.  A  study  of  our  economic 

1  Final  Report  of  the  Industrial  ^Commission.    (Washington,  1902),  XIX,  485, 


MANUFACTURES,   TARIFF,   AND   TRUSTS  739 

history  shows  that  the  introduction  and  improvement  of  machinery, 
and  the  progress  in  methods  of  industrial  organization  and  adminis- 
tration, have  resulted  in  making  the  individual  more  productive, 
and  worth  more  per  unit  of  his  time;  that  he  has  therefore  received 
continually  a  greater  compensation;  that  his  increased  income  has 
given  him  increased  purchasing  power,  and  that  this  gain  in  purchasing 
power  has  so  increased  the  demand  for  manufactured  articles  as 
much  more  than  to  counterbalance  the  original  displacement  of  labor 
by  these  improvements.  .  .  . 

The  fundamental  elements  of  efficiency  in  industrial  production, 
in  the  United  States  as  in  any  country,  are  perhaps  summed  up  as  — 

1.  The  character  of  the  people,  as  given  form  by  race,  environment, 
and  especially  by  social  and  political  influences. 

2.  The  physical  condition  of  the  people,  as  determined  by  their 
food,  their  habits  of  life,  and  exercise. 

3.  The  skill  and  efficiency  of  the  people  as  tool  users. 

4.  The  quantity  and  productivity  of  tools,   as  determined  by 
design  and  construction,  and  by  combination  of  the  man  and  the  ma- 
chine under  all  the  preceding  conditions. 

5.  The  effective  organization  of  business  for  economizing  all  pro- 
ductive and  distributive  forces. 

Given  a  people  of  constitutional  vigor  and  intelligence,  with 
a  talent  for  invention  and  construction,  with  political  freedom  and 
without  social  caste  control,  with  a  good  system  of  education  of  mind 
and  of  hand,  with  abundance  of  wholesome  food  and  a  working  day 
of  proper  length,  with  vocation  and  general  opportunity  free  to  all, 
and  they  will  soon  acquire  tools  and  machinery,  and  skill  in  their 
use,  and  will  promptly  attain  ability  to  promote  their  own  elevation 
in  maximum  degree  in  minimum  time.  These  conditions  are  probably 
at  the  moment  illustrated  in  larger  measure  in  the  industrial  system 
of  the  United  States  than  in  any  other  nation,  though  progress  toward 
their  fulfilment  is  rapid  over  all  the  civilized  world.  .  .  . 

B.   Growth  of  Manufactures,  i 8 50-1 880 l 

A  striking  feature  of  the  following  tables  is  the  tremendous  leap  shown  by 
our  manufacturing  industries  between  1860  and  1870,  under  the  stimulus  of  war 
demand  and  war  prices.  Manufactures  were  highly  localized  in  the  north  Atlantic 
and  north  central  states  and  were  still  closely  allied  to  the  extractive  industries 
of  agriculture  and  mining. 


1  Report  on  the  Manufactures  of  the  United  States  at  the  Tenth  Census.     (Wash- 
ington, 1883),  II,  xi-xxi,  passim. 


740 


READINGS  IN  ECONOMIC  HISTORY 


The  growth  of  the  United  States  in  manufacturing  industry  is 
one  of  the  most  noteworthy  features  of  the  present  industrial  age. 
It  is  not  easy  to  say  which  is  the  best  test  of  that  growth;  but  the 
application  of  any  one  of  the  several  tests  offered  by  the  tables  com- 
mon to  the  last  four  censuses  shows  our  national  progress  in  this  direc- 
tion to  have  been  remarkable. 

Let  us  first  take  the  figures  representing  the  gross  value  of 
product.  .  .  . 

It  is  noted  in  another  place  (see  introductory  notes  on  the  statistics 
of  manufactures)  that  in  comparisons  of  1870  with  1880,  on  the  one 
hand,  or  with  1860  on  the  other,  it  should  be  borne  in  mind  that  the 
figures  for  1870  are  stated  in  a  currency  which  was  at  a  great  discount 
in  gold,  the  average  premium  on  gold  being  for  the  twelve  months, 
June  i,  1869,  to  May  31,  1870,  25.3  per  cent.,  which  is  closely  equiv- 
alent to  a  discount  on  currency  of  20  per  cent.  If  then,  we  discount 
the  reported  values  of  1870  by  one-fifth,  we  shall  have  as  our  corrected 
table  the  following: 


Year 

Corrected  gross 
value  of 
manufactured 
products 

Corrected 
gain 
per  cent  in 
ten  years 

i8<;o.  . 

$1,019,109,616 

1860  

1,885,861,676 

8s.  cs 

1870  

3,385,860,354 

79.54 

1880  

5,369,579,191 

<$8.  59 

Again,  we  may  inquire  what  has  been  the  increase  in  the  net  value 
of  manufactured  products  reported  in  the  four  successive  censuses 
taken  for  the  purposes  of  this  comparison;  that  is,  the  value  of  the 
products  after  deduction  of  the  value  of  the  materials  consumed:  .  .  . 


Year 

Corrected  net 
value  of 
manufactured 
products 

Corrected 
gain 
per  cent  in 
ten  years 

i8qo.  . 

$    463,935,296 

1860  

854,256,584 

84.13 

1870  

1,395,118,560 

63.31 

1880  

1,972,755,642 

41  .40 

MANUFACTURES,   TARIFF,   AND   TRUSTS 


74i 


Again,  we  may  take  the  figures  of  capital  reported  as  invested  in 
manufacturing  industries  at  the  successive  periods  under  considera- 
tion, as  affording  a  certain  measure  of  the  growth  of  the  country  in 
industrial  power,  although  there  is  too  much  reason  to  believe  that  the 
returns  of  capital  have  always  been  gravely  defective,  for  reasons  which 
will  be  adverted  to  hereafter.  Assuming,  however,  that  the  liability  to 
omission  or  defective  statement  remained  of  constant  force  from  1850 
to  1880,  we  should  have  the  following  progressive  results:  .  .  . 


Year 

Corrected 
amount  of 
capital  invested 
in  manufactures 

Corrected 
gain 
per  cent  in 
ten  years 

1850  

S      ^  ?"?   2  j.^   1ZI 

1860  

1  .OOQ  8^  >   7IZ 

80  T.& 

1870  

1  ,694,567,015 

67  80 

1880  

2,790,272,606 

64  66 

Again,  we  may  take  for  comparison  the  amount  of  manufacturing 
wages  paid  in  each  of  the  years  1850,  1860,  1870,  and  1880:  .  .  . 


Year 

Corrected 
amount  of 
manufacturing 
wages  paid 

Corrected 
gain 
per  cent  in 
ten  years 

18150.  . 

$236,759,464 

1860  

378,878,966 

60.03 

1870  

620,467,474 

63  .  76 

1880   ...                      

947,953,795 

=52.78 

If,  again,  we  were  to  take  the  number  of  hands  employed  as  the 
test  of  the  manufacturing  power  of  the  country  on  the  several  dates 
named,  we  should  have  the  following  table: 


Year 

Number  of 
hands  employed 

Gain 
per  cent  in 
ten  years 

1850 

958,079 

1860.  .  .             

1,311,246 

36.86 

1870                                 

2,053,006 

56.64 

1880                          

2,732,595 

33  .04 

742 


READINGS  IN  ECONOMIC  HISTORY 


.  .  .  The  geographical  distribution  of  manufactures  throughout 
the  United  States  appears  by  the  following  tables,  as  was  to  be  ex- 
pected, to  be  governed  by  very  different  forces  from  those  which  control 
the  distribution  of  population  or  of  agricultural  industry.  .  .  . 

The  following  table  presents  for  1880  the  proportions  in  which 
the  several  geographical  groups  contribute  to  the  aggregate  number 
of  establishments,  amount  of  capital  invested,  number  of  hands 
employed,  amount  of  wages  paid,  and  gross  and  net  values  of  product: 


Net 

product 

Groups  of 
states 

Number 
of  estab- 
lishments 

Amount 
of  capital 
invested 

Hands 
em- 
ployed 

Wages 
paid 

Gross 
product 

(i.  e.,  de- 
ducting 
value  of 

mate- 

rials) 

The  United  States 

100.00 

100.00 

100.00 

100.00 

100.00 

100.00 

North  Atlantic..  . 

44.87 

61.94 

62.23 

64-33 

59.64 

62.03 

South  Atlantic.  .  . 

10.  16 

5.89 

7-59 

4-99 

5-26 

5-3° 

Nor  them  Central. 

34-33 

25.78 

24-39 

24.86 

28.94 

26.38 

Southern  Central. 

7-55 

3-75 

3.85 

3-n 

3-47 

3-52 

Western  

^  -OO 

2  .64 

I  .04- 

2.  71 

2  .60 

2    77 

O            7 

*    y-r 

1 

y 

if 

.  .  .  Table  II  of  the  general  statistical  tables  following  [on  page 
743]  distributes  the  aggregate  of  our  manufacturing  industries  under 
332  titles;  of  these  the  following  show  each  a  total  production  of 
$50,000,000  or  over: 

.  .  .  Some  branches  of  manufacture  are  reported  for  every  one  of 
the  47  states  and  territories;  such  as  blacksmi thing,  boot  and  shoe 
making,  the  manufacture  of  tinware,  copperware,  of  sheet-iron  ware, 
and  saddlery  and  harness  making.  The  making  or  repairing  of  car- 
riages and  the  wheelwrighting  trade  appear  in  46  states  and  territories. 
The  making  of  bread  and  other  bakery  products  and  the  manufacture 
of  furniture  are  reported  from  45  states  and  territories.  Forty-four 
states  and  territories  return  founderies  and  machine-shops. 

It  is  significant  of  the  habits  of  the  people  that  while  the  pro- 
duction of  men's  clothing  in  distinct  establishments  is  reported  hi 
43  states  and  territories,  that  of  women's  clothing  is  reported  from 
only  25,  domestic  manufacture  or  custom  dress-making  taking  the 
place  of  the  shop  or  factory  in  supplying  this  demand  in  22  states  or 
territories.  The  other  industries  which  are  reported  in  as  many  as 
43  states  and  territories  are  the  manufacture  of  tobacco  or  cigars  and 


MANUFACTURES,   TARIFF,   AND   TRUSTS 


743 


Industry 

Number 
of  estab- 
lishments 

Value 
of 
product 

Flouring  and  grist-mill  products  

2A.  22,8 

$>COs    T&C    7T2 

Slaughtering  and  meat-packing,   not   including  retail 
butchering  establishments.  .  .  . 

872 

Iron  and  steel  

Woolen  manufactures,  all  classes  l  .  .  .    . 

2  689 

Lumber,  sawed  

or   708 

Foundery  and  machine-shop  products  

4.  O^8 

21  A.  378  4.68 

Cotton  goods  

Clothing,  men's.  .  . 

6  166 

Boots  and  shoes,  including  custom  work  and  repairing.  . 
Sugar  and  molasses,  refined  .  .  . 

17,972 

196,920,481 

Leather,  tanned  

3    TOs 

112    24.8    2.2.6 

Carpentering  

Q   l8A 

QA.   IZ2    I2.Q 

Printing  and  publishing  

1  4.67 

OO.78O    2.4.1 

Furniture  2  

^,227 

77,Sd.^,72^ 

Leather,  curried  

2   3IQ 

71    2.CI   2O7 

Agricultural  implements  .  . 

I  Q4.3 

68  640  486 

Mixed  textiles  

4.7O 

66,221,703 

Bread  and  other  bakery  products 

6  306 

65  824  896 

Carriages  and  wagons 

^  841 

64.  o  s  i  6  1  7 

Tobacco,  cigars  and  cigarettes 

7.I4.C 

62.,Q7Q,C7C 

Paper  ... 

602 

n,  100,014 

Tobacco,  chewing,  smoking,  and  snuff  

477 

[!2,7Q2,,os6 

the  manufacture  of  confectionery.  The  distinct  manufacture  of 
brooms  and  brushes  is  reported  from  36  states  and  territories,  and  that 
of  mattresses  and  spring  beds  from  35.  .  .  . 

So  much  for  the  wide  territorial  diffusion  of  common  industries, 
many  of  them  of  a  petty  character.  ...  Of  the  greater  industries, 
some  are  widely  spread ;  others  intensely  concentrated.  The  greatest 
of  all  is  the  flour  and  grist-mill  industry,  aggregating  a  product  of 
$505,185,712.  Of  this  about  one-half  is  produced  by  the  six  states 
of  New  York,  Illinois,  Pennsylvania,  Minnesota,  Ohio,  and  Missouri, 
while  yet  not  less  than  24  states  produce  above  $4,000,000  each. 
This  industry  involves  the  consumption  of  304,775,737  bushels  of 
wheat  and  234,907,220  bushels  of  other  grain,  with  an  aggregate  value 
of  all  materials  reaching  $441,545,225.  .  .  . 

The  next  of  the  great  industries  is  also  connected  with  the  supply  of 

1  Includes  carpets,  other  than  rag;    felt  goods;   hosiery  and  knit  goods;   wool 
hats;  woolen  goods  and  worsted  goods. 

2  Includes  furniture,  chairs. 


744  READINGS  IN  ECONOMIC  HISTORY 

food,  viz.  slaughtering  and  meat-packing,  which  yields  an  aggregate 
product  of  $303,562,413.  The  concentration  of  this  interest  is  startling, 
the  single  state  of  Illinois  contributing  almost  one- third  of  the  whole,  the 
single  city  of  Chicago  producing  $85,324,371.  Of  the  other  states,  New 
York  follows  at  a  long  distance  with  $43,096,138;  Massachusetts,  with 
$22,951,782;  New  Jersey,  with  $20,719,640;  Ohio,  with  $19,231,297; 
Indiana,  with  $15,209,204;  Missouri,  with  $14,628,630.  .  .  . 

Ranking  next  in  order  of  gross  value  of  product  comes  the  manu- 
facture of  iron  and  steel,  with  an  aggregate  of  $296,557,685,  of  which 
Pennsylvania  alone  produces  $145,576,268.  Ohio  is  the  next  state  as  an 
iron  producer,  with  $34,918,360,  or  less  than  one-fourth  the  product  of 
Pennsylvania.  New  York,  with  $22,219,219;  Illinois,  with  $20,545,- 
289;  New  Jersey,  with  $10,341,896,  and  Massachusetts,  with  $10,288,- 
921,  are  the  only  other  states  rising  above  ten  millions.  There  are  seven 
other  states  showing  a  product  of  between  $10,000,000  and  $4,000,000, 
and  six  showing  between  $4,000,000  and  $1,000,000.  The  aggregate 
value  assigned  to  the  product  of  the  iron  and  steel  manufacture  is  dis- 
tributed among  the  principal  different  classes  of  works  as  follows: 

Blast  furnaces $  89,315,569 

Bloomaries  and  forges 3,968,074 

Iron  rolling  mills 136,798,574 

Bessemer  and  open-hearth  steel  works 55,805,210 

Crucible  and  miscellaneous  steel  works 10,670,258 


Total  .....................................   296,557,685 

.  .  .  Certain  industries,  not  of  the  highest  yet  of  very  con- 
siderable importance  as  to  aggregate  value  of  product,  are  notice- 
able for  their  rapid  extension  at  the  west.  These  are  furniture,  with 
a  product  of  $77,845,725;  agricultural  implements,  $68,640,486; 
carriages  and  wagons,  $64,951,617;  distilled  liquors,  $41,063,663.  .  .  . 


C.   Manufactures, 

The  growing  industrialization  of  the  United  States  in  the  half  century  since 
the  Civil  War  is  clearly  shown  by  the  marvelous  increase  in  the  manufacturing 
industries  of  the  country  as  indicated  in  the  following  table. 

The  statistics  of  manufactures  secured  at  the  decennial  censuses 
from  1850  to  1900,  inclusive,  covered  the  neighborhood,  hand,  and 
building  industries,  as  well  as  the  factory  industries,  while  the  reports 
for  1904  and  1909  were  confined  to  factory  industries.  .  .  . 

1  Thirteenth  Census  of  the  United  States,  Taken  in  the  Year  igio.  Volume 
VIII:  Manufactures  (Washington,  1913),  33,  37,  48,  56,  83. 


MANUFACTURES,   TARIFF,   AND   TRUSTS 


745 


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cd  02 

746  READINGS  IN  ECONOMIC  HISTORY 

.  .  .  The  present  report  on  manufactures  distinguishes  264  in- 
dustries, although  for  certain  purposes  some  of  these  are  subdivided 
into  two  or  more  branches.  .  .  . 

There  are  three  industries  which  in  1909  reported  a  value  of  prod- 
ucts exceeding  a  billion  dollars,  namely,  the  slaughtering  and  meat- 
packing, foundry  and  machine-shop,  and  lumber  industries.  There 
are  six  others  whose  products  exceeded  half  a  billion  dollars  in  value, 
namely,  the  steel  works  and  rolling  mills,  the  flour-mill  and  gristmill 
industry,  printing  and  publishing,  and  the  manufacture  of  cotton 
goods,  of  men's  clothing,  and  of  boots  and  shoes.  .  .  . 

The  five  leading  states  in  respect  to  value  of  manufactured  products 
in  1909  were  New  York,  Pennsylvania,  Illinois,  Massachusetts,  and 
Ohio.  These  states  together  contained  33.2  per  cent,  or  about  one- 
third,  of  the  total  population  of  the  United  States  in  1910,  but 
reported  51.1  per  cent  of  the  total  number  of  wage  earners  in  manu- 
facturing industries  in  1909,  52.5  per  cent  of  the  value  of  manufac- 
tured products,  and  53.8  per  cent  of  the  value  added  by  manufacture, 
or  a  little  more  than  one-half  in  each  case.  .  .  . 

New  York  decidedly  outranks  any  other  city  in  manufacturing, 
although  in  proportion  to  its  population  its  manufacturing  interests 
are  relatively  less  important  than  in  a  considerable  number  of  other 
cities.  Nearly  one-tenth  of  the  total  value  of  manufactured  products 
for  the  United  States  in  1909  was  reported  from  New  York  City.  As 
judged  by  the  value  of  products,  Chicago  ranked  second  among  the 
manufacturing  cities  in  1909,  followed  by  Philadelphia,  St.  Louis, 
Cleveland,  Detroit,  Pittsburgh,  Boston,  Buffalo,  Milwaukee,  and 
NewTark,  in  the  order  named.  Each  of  the  n  cities  just  named 
produced  in  1909  manufactured  products  valued  at  more  than 
$200,000,000. 

D.   Rank  of  the  United  States  as  a  Manufacturer  of  Cotton, 
1830-1905 l 

As  representative  manufacturing  industries  in  this  country,  the  cotton  and  the 
iron  and  steel  industries  have  been  selected  for  more  detailed  description,  and 
the  following  six  extracts  trace  their  development  somewhat  more  fully.  The 
importance  of  the  textile  industry  in  the  United  States  is  best  shown  by  comparing 
it  with  those  of  other  countries.  Judged  by  number  of  spindles  or  value  of  product 
the  United  States  ranks  second  in  the  manufacture  of  cotton. 

It  is  comparatively  easy  to  ascertain  the  relative  rank  of  the  coun- 
tries in  the  manufacture  of  cotton.  Two  methods  may  be  followed, 

1  Census  of  Manufactures:  1905.  Textiles,  Bulletin  74  (Washington,  1907),  21-2. 


MANUFACTURES,   TARIFF,   AND   TRUSTS 


747 


either  of  which  gives  an  approximation  to  the  truth  —  the  amount 
of  cotton  consumed,  and  the  number  of  spinning  spindles.  The  first 
statement  to  be  presented  shows  the  average  consumption  of  cotton 
in  the  United  States,  in  the  United  Kingdom,  and  on  the  continent 
of  Europe,  in  the  five  years  ending  with  each  census  period  of  the 
United  States  from  1830  to  1880,  and  the  total  consumption  for  the 
years  1890,  1900,  and  each  succeeding  year  to  1905: 

COTTON  CONSUMPTION  IN   UNITED   STATES   AND   EUROPE:     1830  TO   1905  * 

(Expressed  in  thousands  of  bales  of  500  pounds  each.) 


Five  years  ending  — 
1830.  . 

United 
States 

United 
Kingdom 

Continent 
of  Europe 

AVERAGE    CONSUMPTION 

104 
204 
442 
650 
700 
1,234 

569 
925 
1,166 
1,812 

2,111 

2,339 

329 
503 
621 
1,192 

i,473 
1,964 

1840  

i8<;o 

1860  

1870  

1880  

Year  — 

1800.  . 

TOTAL   CONSUMPTION 

2,3862 
3,856 
4,3io 

3,3i2 
3,334 

3,620 

3'422 
4,576 
5,148 

1900  

IQO?  . 

But  a  far  more  accurate  test  for  comparison  is  afforded  by  the  num- 
ber of  spindles  in  the  mills  of  the  several  countries.  Table  n  [the 
following  table  on  page  748]  shows  the  number  of  cotton  spindles  in 
the  world  in  the  autumn  of  1906.  .  .  . 

Taking  the  textile  industry  as  a  whole,  it  may  be  concluded  that 
the  United  States,  while  standing  at  some  distance  from  the  United 
Kingdom,  is  nevertheless  second  only  to  it.  Considering  the  several 
branches  of  the  textile  industry,  we  find  that  the  United  States  stands 
first  among  silk  manufacturing  countries  and  second  in  the  manufac- 
ture of  cotton.  In  the  manufacture  of  wool  it  is  probably  inferior 

1  The  authority  for  this  statement  is  Mr.  Thomas  R.  Ellison,  of  Liverpool. 

2  Census  figures. 


748 


READINGS  IN  ECONOMIC  HISTORY 


to    Germany    and    France,    although    not    greatly   behind   either 
country. 

WORLD'S  COTTON  SPINDLES,  BY  COUNTRIES:  1 905-6 * 


Cotton 
spindles 
(number) 


Total 120,090,595 

United  States: 

Cotton  growing  states 8,994,868 

All  other  states 16,255,228 

Europe: 

United  Kingdom 48,826,144 

Germany 9,730,209 

Russia 7,000,000 

France 6,702,800 

Austria 3,621,220 

Italy 3,500,000 

Spain i  ,800,000 

Switzerland 1,462,752 

Belgium 1,122,000 

Portugal 350,000 

All  other  Europe 1,115,000 

British  India 5,250,000 

Japan 1,403,740 

China 619,648 

Brazil 733>89o 

Mexico 628,096 

Canada 775,000 

Other  countries 200,000 


The  flax  and  jute  industries  are  carried  on  in  this  country  on  a 
small  scale.  No  figures  can  be  presented  to  indicate  even  approxi- 
mately the  rank  of  the  different  countries,  but  there  is  no  doubt 
that  the  United  States  occupies  a  rank  relatively  low.  On  the  other 
hand,  the  manufacture  of  cordage  and  twine  from  hemp  is  very 
extensive,  and  in  this  the  United  States  probably  takes  the  first  or  the 
second  rank. 


1  The  statistics  for  the  United  States  were  collected  by  this  Bureau.  Those  for 
other  countries  have  been  compiled  from  a  number  of  authorities,  among  them 
being  the  International  Federation  of  Master  Cotton  Spinners'  and  Manufac- 
turers' Associations,  Manchester,  Eng.;  the  Financial  and  Commercial  Chronicle, 
New  York;  Cotton  Facts:  Lyon  &  Co.,  Bombay;  and  Mitsui  Bussan  Kaisha, 
Osaka. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  749 

E. 


The  steadily  growing  population  of  the  United  States  with  its  high  standard 
of  living  has  furnished  American  manufacturers  a  market  for  large  quantities  of 
staple  goods,  in  the  production  of  which  improved  machinery  and  large-scale 
methods  have  been  characteristic.  In  cotton  manufactures  there  was  the  addi- 
tional advantage  of  cheap  raw  material  close  at  hand. 

The  cotton  manufacture  of  the  United  States  may  now  be  con- 
sidered more  firmly  established  than  ever  before.  The  method  on 
which  the  business  is  conducted  in  the  United  States  varies  greatly 
from  that  of  any  other  country;  and  this  difference  arises  mainly 
from  a  difference  not  only  in  the  habits  and  customs  of  the  people, 
but  also  in  their  condition  and  intelligence. 

The  home  market  is  the  most  important  one,  and  may  long  con- 
tinue to  be  so,  although  the  export  demand  for  our  fabrics  now  takes 
from  7  to  8  per  cent,  of  our  annual  product,  and  is  likely  to  increase. 

In  contrast  with  the  cotton  manufacturer  of  Great  Britain,  our 
principal  rival,  we  are  therefore  called  upon  to  meet  the  demands  of 
an  intelligent  class  of  customers  living  under  substantially  uniform 
conditions  and  varying  but  little  in  their  requirements.  Hence  we 
are  not  called  upon  for  the  great  variety  of  fabrics  that  must  be  sup- 
plied by  Great  Britain.  In  consequence  of  this  demand  for  a  great 
variety  of  fabrics,  the  work  of  the  cotton  manufacture  of  England 
is  much  more  divided  than  with  us.  ... 

The  principal  market  for  our  own  fabrics  is  found  among  the  thrifty 
working  people,  who  constitute  the  great  mass  of  our  population. 

It  has  therefore  happened  that,  although  we  have  not  until  re- 
cently undertaken  the  manufacture  of  very  fine  fabrics,  the  average 
quality  of  fabrics  that  we  do  make  is  better  than  that  of  any  other 
nation,  with  the  possible  exception  of  France.  It  is  for  the  wants  of 
the  million  that  our  cotton  factories  are  mainly  worked,  and  we  have 
ceased  to  import  staple  goods,  and  shall  never  be  likely  to  resume 
their  import.  .  .  . 

In  1860  the  whole  number  of  spindles  in  the  United  States  was 
5,235,000.  ...  In  1880  the  number  of  spindles  operated  in  the 
specific  manufacture  of  cotton  fabrics  was  10,653,435;  but  the  spindle 
has  changed  in  its  productive  power,  and  each  spindle  of  1880  was 
much  more  effective  than  that  of  1860.  .  .  . 

In  1860  the  average  product  of  one  operative,  working  one  year, 
was  5,317  pounds;  in  1880,  7,928  pounds  of  drill,  such  as  is  exported 

1  Report  on  the  Manufactures  of  the  United  States  at  the  Tenth  Census.  (Wash- 
ington, 1883),  II,  946-8. 


750 


READINGS  IN  ECONOMIC  HISTORY 


to  China.  Assuming  5  pounds,  or  about  16  yards,  as  the  annual  re- 
quirement of  a  Chinaman  for  dress,  in  1860  one  Lowell  operative, 
working  one  year,  clothed  1,063  Chinese;  in  1880  one  could  supply 
1,586.  .  .  . 

F.   Growth  of  Cotton  Manufactures,  1860-1910 l 

The  further  growth  of  the  manufacture  of  cotton  goods  is  here  shown,  bringing 
the  statistics  down  to  the  date  of  the  last  census. 

The  following  table  gives  comparative  statistics  for  the  cotton- 
goods  industry,  as  a  whole,  from  1859  to  1909,  inclusive: 


Num- 

Wage 

ber  of 
estab- 

earners 
(average 

Wages 

Cost  of 
materials 

Value  of 
products 

added  by 
manufac- 

lish- 

num- 

ments 

ber) 

ture 

IQOQ. 

1.324 

378,880 

$132,859,145 

$371,009,470 

$628,391,813 

$2?7  382  343 

IOO4. 

I.IC4 

06,  20?,  706 

286,255,303 

450,467,704 

164  212  4OI 

1,0?? 

302,861 

86,689,752 

I76,??I,?27 

339,200,320 

162,648  ?cn 

l88o. 

90? 

218,876 

66,024,538 

I  ?4,  012,070 

267,981,724 

11^,068,74^ 

1879  2.  ... 

756 

172,544 

4-2,040,510 

102,206,347 

192,090,110 

89,883,763 

1869. 

956 

135,369 

39,044,132 

111,736,936 

177,489,739 

6s,  7^2,  80  "? 

1859  

1,091 

122,028 

23.940,108 

57,285,534 

115,681,774 

58,396,240 

G.   Cotton  Manufactures  in  the  South,  i8po-iooo 3 

One  of  the  most  important  economic  developments  of  recent  years  has  been 
the  growth  of  cotton  manufacturing  in  the  south.  It  has  meant  the  industrial 
awakening  of  that  section  of  the  country,  and  severe  competition  for  New  England 
mills. 

The  following  tabular  statement  will  bring  to  light  the  most 
interesting  and  the  most  important  fact  relating  to  the  growth  of  the 
cotton-manufacturing  industry  during  the  decade  1800-1900: 

1  The  Thirteenth  Census  of  the  United  Stales,  Taken  in  the  Year  igio.     Volume 
VIII:   Manufactures  (Washington,  1913),  391. 

2  Does  not  include  249  mills  classed  as  "special  mills"  making  hosiery,  braid- 
ing, tapes,  and  fancy  fabrics,  and  mixed  goods  or  other  fabrics  not  sold  as  specific 
manufactures  of  wool  or  cotton.     In  these  establishments  there  were  1 2,928  employ- 
ees, receiving  $3,573,909  in  wages.     The  cotton  consumed  cost  $2,338,385,  and  the 
value  of  the  products  was  $18,860,273. 

3  Twelfth  Census  of  the  United  States.  Census  Bulletin  215  (Washington, 
1902),  12-3. 


MANUFACTURES,   TARIFF,   AND   TRUSTS 

SECTIONAL   DISTRIBUTION    OF    ESTABLISHMENTS 


751 


GEOGRAPHICAL    DIVISIONS 

1900 

1890 

I880 

New  England  states  

Middle  states  

22? 

Southern  states  

27O 

161 

Western  states  

16 

2? 

Total  

O73 

7Sf) 

.  .  .  The  growth  of  the  industry  in  the  South  is  the  one  great 
fact  in  its  history  during  the  past  ten  years.  It  will  be  seen  that  in 
1880  there  were,  in  that  part  of  the  country,  161  establishments  only 
which  made  reports  to  the  census;  in  1890  there  were  only  239,  an 
increase  of  78,  or  48.4  per  cent;  and  in  1000  there  were  400  separate 
establishments,  an  increase  from  1800  of  161,  or  67.4  per  cent.  A 
scrutiny  of  the  returns  by  states  shows  that  substantially  the  whole 
increase  in  the  South  has  been  in  the  4  states  of  North  Carolina,  South 
Carolina,  Georgia,  and  Alabama.  .  .  . 

The  earliest  Southern  enterprises  were  not  in  all  cases  begun  as 
first-class  establishments.  Some  of  them  were  equipped  with  dis- 
carded machinery  from  Northern  mills.  But  the  manufacturers 
quickly  learned  the  lesson  that  there  is  no  industry  in  which  profits 
are  more  directly  proportioned  to  the  perfection  and  speed  of  the 
machinery  than  in  the  spinning  and  weaving  of  cotton;  and  the  old 
spindles  and  looms  were  speedily  replaced  with  others  of  the  newest 
pattern.  A  great  proportion  of  the  mills  built  and  started  within 
the  past  decade  have  been  thoroughly  up  to  date  in  all  respects.  .  .  . 

The  growth  of  the  manufacturing  industry  in  the  South  has  been 
fairly  continuous  during  the  past  ten  years.  How  large  it  has  been 
the  figures  show.  For  the  most  part  the  product  of  the  region  has 
been  coarse  or  medium  goods,  as  is  usually  the  case  in  the  early 
stages  of  the  industry.  ...  A  considerable  part  of  the  product  of 
the  region  is  exported.  The  industry  is  now  important  enough  in 
the  4  states  of  North  Carolina,  South  Carolina,  Georgia,  and  Alabama 
to  consume  nearly  one-third  of  the  crop  of  cotton  grown  in  those 
states;  and  both  North  Carolina  and  South  Carolina  spin  more 
than  half  the  cotton  grown  within  their  limits. 


752  READINGS  IN  ECONOMIC  HISTORY 

H.   The  Iron  and  Steel  Industry,  1880  l 

By  1880  the  iron  and  steel  industry  of  the  United  States  was  entering  upon  the 
period  of  development  which  enabled  it  in  the  next  two  decades  to  become  the 
leading  producer  of  pig  iron  and  of  iron  and  steel  manufactures  in  the  world.  Im- 
provements in  transportation  facilities,  the  growth  of  an  enormous  domestic 
market,  the  exploitation  of  rich  deposits  of  iron  ore,  and  improvements  in  methods 
of  production  all  contributed  to  this  development. 

The  present  condition  of  the  iron  and  steel  industries  of  the 
United  States  is  one  of  great  prosperity;  yet  they  are  subject  to  dis- 
advantages from  which  the  corresponding  industries  of  other  countries 
are  relieved.  It  is  true  that  it  cannot  now  be  said,  as  it  was  once  said, 
that  they  lack  the  skill,  or  the  capital,  or  the  extensive  and  complete 
establishments  of  other  countries;  they  are  no  longer  infant  industries 
in  any  sense;  nor  can  it  be  said  that  the  natural  resources  for  the  manu- 
facture of  iron  and  steel  in  this  country  are  not  abundant  and  varied. 
But  in  comparison  with  the  iron  and  steel  industries  of  other  countries 
they  are  at  a  disadvantage  in  two  important  particulars.  The  wages 
of  labor  are  much  higher  in  this  country  than  in  any  other  ironmaking 
country  in  the  world;  and  the  raw  materials  of  production,  rich  and 
abundant  as  they  are,  are  in  the  main  so  remote  from  each  other  that 
a  heavy  cost  for  their  transportation  is  incurred  to  which  no  other 
ironmaking  country  is  subjected. 

With  reference  to  wages,  a  single  illustration  will  show  the  dis- 
parity that  exists  in  the  iron  and  steel  industries  of  this  country  and 
Europe.  At  Pittsburgh  the  price  of  puddling,  or  boiling,  iron  was 
fixed  for  one  year  on  the  3oth  of  May,  1 88 1,  in  an  agreement  between 
the  employers  and  their  workmen,  at  a  minimum  of  $5.50  per  ton, 
the  price  to  be  advanced  if  the  price  of  bar  iron  should  advance  beyond 
2\  cents  a  pound.  Of  the  $5.50  the  puddler's  helper  receives  about 
one-third.  ...  In  England  the  wages  of  iron  and  steel  workers  are 
probably  higher  than  in  any  other  part  of  Europe.  .  .  .  The 
wages  of  puddlers  for  the  three  months  beginning  on  the  ist  of 
August,  1881,  was  75.  per  ton,  or  about  $1.75,  of  which  sum  the 
puddler's  helper,  hi  accordance  with  the  English  custom,  receives 
about  one-third.  .  .  . 

With  regard  to  the  cost  of  transporting  raw  materials  in  the  United 
States  and  Europe,  the  testimony  of  a  distinguished  English  ironmaster 
will  be  sufficient  to  show  the  great  disparity  which  exists  in  the  dis- 
tances over  which  they  must  be  transported.  Mr.  I.  Lowthian  Bell,  a 

1  Report  on  the  Manufactures  of  the  United  States  at  the  Tenth  Census.  (Wash- 
ington, 1883),  II,  877-8,  886,  888-9. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  753 

commissioner  from  Great  Britain  to  the  Philadelphia  exhibition  of 
1876,  says  in  his  official  report:  "The  vast  extent  of  the  territory 
of  the  United  States  renders  that  possible  which  in  Great  Britain 
is  physically  impossible;  thus  it  may  and  it  does  happen  that  in  the 
former  distances  of  nearly  1,000  miles  may  intervene  between  the  ore 
and  the  coal,  whereas  with  ourselves  it  is  difficult  to  find  a  situation 
in  which  the  two  are  separated  by  even  100  miles."  From  the  ore 
mines  of  Lake  Superior  and  Missouri  to  the  coal  of  Pennsylvania  is 
i  ,000  miles.  Collinsville  coke  is  taken  600  miles  to  the  blast  furnaces 
of  Chicago,  and  750  miles  to  the  blast  furnaces  of  St.  Louis.  The 
average  distance  over  which  all  the  domestic  iron  ore  which  is  con- 
sumed in  the  blast  furnaces  of  the  United  States  is  transported  is 
not  less  than  400  miles,  and  the  average  distance  over  which  the 
fuel  which  is  used  to  smelt  it  is  transported  is  not  less  than  200 
miles.  .  .  . 

But  it  is  not  only  on  the  raw  materials  that  the  cost  of  trans- 
portation operates  as  an  impediment  to  low  prices  for  manufactured 
products.  The  manufactured  products  themselves  must  frequently 
be  transported  long  distances  to  find  consumers.  ...  • 

The  people  of  the  United  States  are  the  largest  per  capita  consumers 
of  iron  and  steel  in  the  world,  and  of  all  nations  they  are  also  the  largest 
aggregate  consumers  of  these  products.  Great  Britain  makes  more 
iron  than  we  do,  but  she  exports  about  one-half  of  all  that  she  makes. 
She  exports  more  than  one-half  of  the  steel  that  she  makes,  and  yet 
makes  but  little  more  than  this  country.  No  other  European  country 
equals  Great  Britain  either  in  the  per  capita  or  aggregate  consumption 
of  iron  and  steel.  This  country  is  not  now  producing  as  much  iron 
and  steel  as  it  consumes,  but  imports  large  quantities  of  both  products, 
Great  Britain  being  the  principal  source  of  our  foreign  supply.  Our 
exports  of  iron  and  steel  are  only  nominal. 

A  simple  enumeration  of  some  of  the  more  important  uses  to 
which  iron  and  steel  are  applied  by  our  people  will  show  how  prominent 
is  the  part  these  metals  play  in  the  development  of  American  civiliza- 
tion and  in  the  advancement  of  our  greatness  and  power  as  a 
nation.  .  .  . 

In  reviewing  the  historical  pages  of  this  report  the  most  striking 
fact  that  presents  itself  for  consideration  is  the  great  stride  made  by 
the  world's  iron  and  steel  industries  in  the  last  hundred  years.  .  .  . 
A  hundred  years  ago  there  were  no  railroads  in  the  world  for  the  trans- 
portation of  freight  and  passengers.  Iron  ships  were  unknown,  and 
all  the  iron  bridges  in  the  world  could  be  counted  on  the  fingers  of 


754  READINGS  IN  ECONOMIC  HISTORY 

one  hand.  Without  railroads  and  their  cars  and  locomotives,  and 
without  iron  ships  and  iron  bridges,  the  world  needed  but  little  iron. 
Steel  was  still  less  a  necessity,  and  such  small  quantities  of  it  as  were 
made  were  mainly  used  in  the  manufacture  of  tools  with  cutting 
edges. 

The  great  progress  made  by  the  world's  iron  and  steel  industries 
in  the  last  hundred  years  is  as  marked  in  the  improvement  of  the 
processes  of  manufacture  as  in  the .  increased  demand  for  iron  and 
steel  products.  .  .  . 

The  next  most  important  fact  that  is  presented  in  the  historical 
chapters  of  this  report  is  the  astonishing  progress  which  the  iron  and 
steel  industries  of  the  United  States  have  made  within  the  last  twenty 
years.  During  this  period  we  have  not  only  utilized  all  contemporane- 
ous improvements  in  the  manufacture  of  iron  and  steel,  but  we  have 
shown  a  special  aptitude,  or  genius,  for  the  use  of  such  improvements 
as  render  possible  the  production  of  iron  and  steel  in  large  quan- 
tities. ...  If  our  iron  and  steel  industries  had  not  been  developed 
in  the  past  twenty  years  as  they  have  been  it  is  clear  that  our  railroad 
system  could  not  have  been  so  wonderfully  extended  and  strengthened, 
and  without  this  extension  of  our  railroads  we  could  not  have  pro- 
duced our  large  annual  surplus  of  agricultural  products  for  exporta- 
tion, nor  could  our  population  have  been  so  largely  increased  by 
immigration  as  it  has  been.  .  .  . 

The  position  of  the  United  States  among  iron  and  steel  producing 
countries  in  1880  is  correctly  indicated  in  the  following  table  of  the 
world's  production  of  pig  iron  and  steel  of  all  kinds,  which  we  have 
compiled  from  the  latest  and  most  reliable  statistics  that  are  accessible. 
This  table  places  the  world's  production  of  pig  iron  in  >i88o  at 
17,688,596  gross  tons,  and  the  world's  production  of  steel  in  the  same 
year  at  4,343,719  gross  tons.  The  percentage  of  pig  iron  produced 
by  the  United  States  was  nearly  22,  and  its  percentage  of  steel  was 
nearly  29,  being  surpassed  in  the  production  of  each  only  by  Great 
Britain. 

I.    The  Iron  and  Steel  Industry,  1870-1900  1 

The  growth  of  this  important  industry  is  shown  in  the  following  table. 
The  decline  in  the  number  of  establishments  should  be  noted  in  connection  with 
the  increase  in  capital,  labor,  and  output. 


1  Twelfth  Census  of  the  United  States.     Census  Bulletin   246  (Washington, 
1902),  6. 


MANUFACTURES,   TARIFF,   AND  TRUSTS 


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756  READINGS  IN  ECONOMIC  HISTORY 


II.  TARIFF 

A.   Tariff  Changes,  1860-1882  l 

Even  before  the  outbreak  of  the  Civil  War  the  financial  necessities  of  the 
government  led  to  an  increase  in  tariff  rates,  and  during  the  war  itself  they  were 
raised  to  prohibitory  heights.  When  the  cessation  of  hostilities  led  to  a  reduction 
of  expenditures,  Congress  preferred  to  remove  the  more  onerous  internal  revenue 
taxes  and  leave  the  tariff  almost  undisturbed.  A  ten  per  cent  reduction  in  1872 
lasted  only  one  year,  so  that  in  1882  the  tariff  was  still  practically  on  the  war 
level.  Roberts  was  an  ardent  protectionist. 

The  bill  which  has  become  well  known  as  the  Morrill  tariff,  and 
which,  with  increments  and  changes,  has  stood  for  over  twenty 
years,  was  introduced  by  Hon.  Justin  S.  Morrill,  of  Vermont,  on 
the  1 2th  of  March,  1860,  and  passed  the  House  of  Representatives 
in  May  of  that  year.  .  .  . 

A  general  increase  was  made  in  rates,  and  many  duties  were 
changed  to  specific  sums  from  rates  varying  with  value.  .  .  . 

Seven  states  had  proclaimed  ordinances  of  secession  before  this 
act  was  passed,  and  the  demands  of  the  national  government  at  once 
began  to  increase  with  a  rapidity  calculated  to  paralyze  weak  minds. 
The  special  session  of  Congress,  which  assembled  on  the  fourth  of 
July,  1861,  had  no  more  important  task  than  to  provide  money  for 
the  national  treasury.  Mr.  Stevens,  from  the  Committee  on  Ways 
and  Means,  however,  announced  that  no  general  revision  of  the  tariff 
would  be  undertaken.  By  an  act  which  bears  date  August  5,  1861, 
the  rates  were  advanced,  and  tea  and  coffee,  with  some  other  com- 
modities, were  subjected  to  duty.  The  like  process  of  general  increase 
was  carried  still  farther  by  the  act  of  December  24,  1861.  The  aim 
was  the  same  in  the  statute  of  July  14,  1862.  By  joint  resolution  of 
April  29,  1864,  all  duties,  except  upon  white  paper,  were  increased 
fifty  per  cent,  for  sixty  days.  On  the  3oth  of  June,  1864,  a  permanent 
increase  was  provided  for.  Mr.  Morrill  in  explaining  the  bill  de- 
clared that  its  primary  object  was  to  increase  the  revenue,  and  at  the 
same  time  to  shelter  and  nurse  our  domestic  products,  from  which 
at  that  time  we  were  drawing  much  the  largest  receipts  into  the 
treasury.  March  3,  1865,  another  bill  was  passed  to  adjust  the  duties 
on  imports  to  the  internal  taxes  which  had  been  augmented.  On  the 
28th  of  July,  a  law  of  four  pages  was  found  to  be  necessary  for  correc- 

1  Government  Revenue:  especially  the  American  System.  By  Ellis  H.  Roberts 
(Boston,  1884),  115-8. 


MANUFACTURES,   TARIFF,  AND   TRUSTS  757 

tions  and  adjustment  of  imposts.  March  2,  1867,  the  imposts  on 
wool  were  increased. 

At  this  point  the  war  revenues  culminated.  The  process  of  de- 
cided reduction  was  begun  by  the  act  of  July  14,  1870.  Under  that 
statute  the  rates  on  teas,  which  had  been  twenty-five  cents  a  pound, 
were  made  fifteen  cents;  coffee,  which  had  been  five  cents,  was  made 
three  cents;  pig-iron,  which  had  been  rated  at  $9  a  ton,  was  carried 
down  to  $7.  Spices  were  generally  reduced.  Other  imposts  were 
changed  in  a  like  spirit.  The  estimated  decrease  in  duties  was 
$29,000,000  a  year,  from  the  operation  of  this  law.  Tea  and  coffee 
were  placed  on  the  free  list  May  i,  1872.  On  the  first  of  June,  1872, 
another  act  was  passed  still  further  cutting  down  the  war  imposts. 
It  was  reported  by  Mr.  Dawes,  of  Massachusetts,  and  one  of  its 
provisions  was  to  strike  off  ten  per  cent  from  the  rates  collected  on 
most  of  the  commodities,  and  to  put  others  into  the  free  list.  The 
effect  of  the  acts  of  May  and  June,  1872,  was  estimated  to  be  the 
reduction  of  the  receipts  from  customs  to  the  extent  of  $44,374,721 
a  year. 

The  business  reaction  which  produced  the  panic  of  1873,  and  the 
consequent  falling  off  in  government  receipts,  in  addition  to  the  esti- 
mated results  of  legislation,  led  to  the  restoration  of  this  ten  per  cent., 
March  3,  1873.  No  important  changes  in  duties  occurred  until  the 
appointment  of  the  tariff  commission,  May  15,  1882,  and  its  report 
leading  to  the  act  of  March  3,  1883.  .  .  . 

B.   Reduction  of  the  Tar  if  Urged,  1882  l 

The  first  tariff  commission  in  the  United  States  was  appointed  in  1882.  Though 
the  protected  interests  were  strongly  represented  on  it,  the  commission  brought 
in  a  report  urging  a  radical  reduction  from  the  existing  high  duties.  Congress, 
however,  paid  little  attention  to  their  report  in  framing  the  Tariff  Act  of  1883,  and 
made  but  slight  reductions  and  those  mainly  in  the  non-protected  groups. 

.  .  .  Early  in  its  deliberations  the  Commission  became  convinced 
that  a  substantial  reduction  of  tariff  duties  is  demanded,  not  by  a 
mere  indiscriminate  popular  clamor,  but  by  the  best  conservative 
opinion  of  the  country,  including  that  which  has  in  former  times  been 
most  strenuous  for  the  preservation  of  our  national  industrial  de- 
fenses. .  .  . 

Entertaining  these  views,  the  Commission  has  sought  to  present 
a  scheme  of  tariff  duties  in  which  substantial  reduction  should  be  the 
distinguishing  feature.  The  average  reduction  in  rates,  including 

1  Report  of  the  Tari/  Commission.     (Washington,  1882),  I,  5,  6. 


758  READINGS  IN  ECONOMIC  HISTORY 

that  from  the  enlargement  of  the  free  list  and  the  abolition  of  the 
duties  on  charges  and  commissions,  at  which  the  Commission  has 
aimed  is  not  less  on  the  average  than  20  per  cent.,  and  it  is  the  opin- 
ion of  the  Commission  that  the  reduction  will  reach  25  per  cent. 

C.  Changes  in  the  Tariff,  1883-1897  l 

By  1883  the  manufacturing  interests  were  strong  enough  to  resist  any  effort 
to  reduce  the  protection  granted  in  the  tariff,  and  the  act  of  1883  made  an  average 
reduction  of  only  about  5  per  cent,  though  the  extract  here  quoted,  from  a  Re- 
publican report,  gives  a  different  impression.  A  few  years  later  these  duties  yielded 
sums  far  in  excess  of  the  needs  of  government,  and  the  Democrats  proposed  to  lower 
the  tariff  and  thus  reduce  the  revenue.  The  Mills  Bill  was  not  enacted  into  law, 
however,  and  two  years  later  the  Republicans,  who  were  now  in  control,  passed  the 
McKinley  Act,  which  aimed  to  reduce  the  revenue  by  raising  duties  to  an  almost 
prohibitory  point.  This  was  reversed  four  years  later  by  the  Wilson  Act,  which 
was  passed  by  a  Democratic  Congress  and  essentially  reduced  duties,  putting  many 
articles  on  the  free  list.  The  panic  of  1893  and  resulting  depression  made  the 
revenue  from  this  act  insufficient,  and  in  1897  the  Dingley  Act  advanced  duties 
even  beyond  the  point  they  had  reached  under  the  act  of  1890,  or  to  an  average 
rate  of  57  per  cent,  the  highest  in  the  history  of  the  tariff. 

THE    ALDRICH    REPORT,  1888 

MR.  ALDRICH,  from  the  Committee  on  Finance,  submitted  the 
following  report:  .  .  . 

The  criticism  of  our  tariff  laws  which  is  urged  \vith  most  per- 
tinacity is  based  upon  the  assumption  that  we  are  maintaining  in 
time  of  profound  peace  a  war  tariff  enacted  to  provide  for  the  enor- 
mous expenditures  incurred  between  1861  and  1866.  It  is  frequently 
claimed  that  the  rates  which  are  now  imposed  are  greater  even  than 
those  which  were  levied  during  the  war.  .  .  . 

The  revision  of  March  3,  1883,  left  the  rates  upon  nearly  all 
articles  mentioned  in  our  tariff  schedules  greatly  below  those  which 
had  been  levied  prior  to  July  14,  1870.  For  instance,  the  rate  on 
every  item  in  the  woolen  schedule  had  been  largely  reduced.  This  is 
also  true  of  every  item  in  the  cotton  schedule  except  manufactures 
of  cotton  not  otherwise  provided  for.  All  manufactures  of  iron  and 
steel,  with  a  few  unimportant  exceptions,  had  been  changed.  All 
but  two  of  the  rates  in  the  earthenware  schedule  had  been  amended. 
The  duties  upon  common  window  glass  had  been  largely  reduced. 
The  chemical  schedule  had  been  entirely  recast,  and  great  reductions 

1  Customs  Tariff:  Senate  and  House  Reports,  1888,  1890,  1894,  1897.  6oth 
Cong.,  2d  sess.,  Sen.  Doc.  No.  547  (Washington,  1909),  78-80,  15-6,  242-3,  282-91, 
347-53,  passim. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  759 

in  rates  had  taken  place.  The  list  of  the  articles  which  remain  dutiable 
at  rates  which  were  imposed  in  1870  includes  the  agricultural  products, 
a  few  manufactured  articles  of  minor  importance  with  rates  from  20 
to  35  per  cent,  several  fancy  articles,  like  perfumery,  cosmetics,  and 
artificial  flowers,  upon  which  a  revenue  duty  of  50  per  cent  was  laid, 
and  the  articles  enumerated  in  the  flax,  hemp,  and  jute  schedule,  upon 
which  the  duties  have  never  been  protective.  As  to  all  the  great 
protected  industries,  changes  in  phraseology  and  radical  reductions  in 
rates  had  been  made.  .  .  . 

THE  MILLS  REPORT,  1888 

To  Reduce  Taxation  and  Simplify  the  Laws  in  Relation  to  the  Collection 

of  the  Revenue 

The  Committee  on  Ways  and  Means,  to  whom  was  referred  the 
annual  message  of  the  President,  calling  the  attention  of  Congress 
to  the  large  surplus  now  in  the  Treasury,  daily  growing  larger  on 
account  of  the  excess  of  receipts  over  expenditures,  have  given  to 
the  subject  that  careful  consideration  which  its  importance  demands, 
and  in  response  to  his  recommendations  beg  leave  to  report  to  the 
House  a  bill  to  prevent  the  accumulation  of  surplus  revenue  by  re- 
ducing the  present  excessive  and  unjust  rates  of  taxation  imposed 
upon  the  people. 

Our  revenues  for  the  fiscal  year  ending  June  30,  1887,  amounted 
to  $371,403,277.66,  while  our  expenditures  for  the  same  time, 
including  interest  and  sinking  fund  for  the  public  debt,  amounted  to 
$315,835,428.12;  leaving  a  surplus  of  $55,567,849.54  over  and 
above  all  requirements  for  current  expenditure.  .  .  . 

There  are  two  ways  in  which  this  excessive  accumulation  may  be 
prevented.  We  may  reduce  taxation  to  the  level  of  expenditures  and 
leave  in  the  pockets  of  the  people  all  moneys  not  needed  for  public 
purposes,  or  we  may  raise  expenditures  to  the  height  of  taxation, 
seeking  out  new  and  useless  objects  of  appropriation  on  which  to 
lavish  the  great  and  growing  revenues,  not  needed  for  any  legitimate 
wants  of  the  public  service. 

If  we  adopt  the  latter  course  these  very  objects  of  useless  expendi- 
ture will  gather  upon  Congress  in  such  increasing  numbers  and  with 
such  growing  demands  as  to  fasten  upon  the  Government  a  perma- 
nent and  unchangeable  policy  of  extravagant  and  reckless  appropria- 
tions. .  .  . 

There  is  but  one  safe  course,  and  that  is  to  reduce  taxation  to  the 


760  READINGS  IN  ECONOMIC  HISTORY 

necessary  requirements  of  an  honest,  economical,  and  efficient  admin- 
istration of  Government.  Having  determined  upon  this  course  as 
the  one  which  a  wise  and  just  policy  demands,  we  are  confronted 
with  the  question,  Upon  what  articles  shall  the  reduction  be  made? 
Shall  we  leave  our  import  duties  as  they  are  and  repeal  the  internal- 
revenue  taxes  on  alcoholic  liquors  and  tobacco?  Or  shall  we  leave 
the  internal-revenue  tax  as  it  is  and  make  the  reduction  on  imports 
alone?  Or  shall  we  reduce  the  taxes  on  both? 

The  committee  have  determined  to  recommend  a  reduction  of  the 
revenues  from  both  customs  and  internal  taxes.  They  have  given 
the  whole  subject  a  careful  and  painstaking  examination,  and  in  the 
revision  of  the  schedules  have  endeavored  to  act  with  a  spirit  of 
fairness  to  all  interests.  They  have  carefully  kept  in  view  at  all  times 
the  interests  of  the  manufacturer,  the  laborer,  the  producer,  and  the 
consumer.  .  .  . 

MCKINLEY  REPORT,  1890 

To  Reduce  the  Revenue  and  Equalize  Duties  on  Imports,  and  for 
Other  Purposes 

MR.  McKiNLEY,  from  the  Committee  on  Ways  and  Means,  sub- 
mitted the  following  report  (to  accompany  H.  R.  9416): 

The  Committee  on  Ways  and  Means,  to  whom  was  referred  that 
part  of  the  message  of  the  President  of  the  United  States  relating 
to  public  revenues,  have  carefully  considered  the  subject,  and  report 
back  the  accompanying  bill  with  a  favorable  recommendation. 

We  are  advised  from  the  annual  report  of  the  Secretary  of  the 
Treasury  that  the  ordinary  revenues  of  the  Government,  actual  and 
estimated,  for  the  fiscal  year  ending  June  30, 1800,  will  be  $385,000,000, 
and  that  the  expenditures  for  the  same  period,  actual  and  estimated, 
will  be  $293,000,000,  leaving  a  surplus  of  $92,000,000.  .  .  . 

The  exact  effect  upon  the  revenues  of  the  Government  of  the 
proposed  bill  is  difficult  of  ascertainment.  That  there  will  be  a  sub- 
stantial reduction,  as  we  shall  show,  admits  of  no  doubt.  It  is  not 
believed  that  the  increase  of  duties  upon  wools  and  woolen  goods,  and 
upon  glassware,  will  have  the  effect  of  increasing  the  revenues.  That 
would,  of  course,  follow  if  the  importations  of  the  last  fiscal  year  were 
hereafter  to  be  maintained,  which,  however,  is  altogether  improb- 
able. The  result  will  be  that  importations  will  be  decreased,  and 
therefore  the  amount  of  revenue  collected  from  these  sources  will 
be  diminished. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  761 

In  every  case  of  increased  duty  except  that  imposed  upon  tin  plate 
(which  does  not  go  into  effect  until  July  i,  1891)  and  upon  linen  fabrics 
the  effect  will  be  to  reduce  rather  than  enlarge  the  revenues,  because 
importations  will  fall  off.  It  was  the  aim  of  the  committee  to  fix  the 
duties  upon  that  class  of  manufactured  goods  and  farm  products 
which  can  be  supplied  at  home  so  as  to  discourage  the  use  of  like 
foreign  goods  and  products,  and  secure  to  our  own  people  and  our  own 
producers  the  home  market,  believing  that  competition  among  our- 
selves will  secure  reasonable  prices  to  consumers  in  the  future  as  it 
has  invariably  done  in  the  past.  .  .  . 

We  have  not  been  so  much  concerned  about  the  prices  of  the 
articles  we  consume  as  we  have  been  to  encourage  a  system  of  home 
production  which  shall  give  fair  remuneration  to  domestic  producers 
and  fair  wages  to  American  workmen,  and  by  increased  production 
and  home  competition  insure  fair  prices  to  consumers.  .  .  . 

WILSON  REPORT,  1893 

To  Reduce  Taxation,  to  Provide  Revenue  for  the  Government,  and  for 
Other  Purposes 

MR.  WILSON,  of  West  Virginia,  from  the  Committee  on  Ways  and 
Means,  submitted  the  following  report  to  accompany  H.  R.  4864: 

The  Committee  on  Ways  and  Means,  to  which  have  been  referred 
sundry  House  bills  imposing  or  regulating  custom  duties  upon  articles 
imported  into  the  United  States  from  other  countries,  have  prepared 
and  herewith  present  a  bill  which  contemplates  a  general  revision, 
reduction,  and  simplification  of  our  system  of  import  duties,  and  sub- 
mit it  with  the  following  explanatory  statement: 

The  American  people,  after  the  fullest  and  most  thorough  debate 
ever  given  by  any  people  to  their  fiscal  policy,  have  deliberately  and 
rightly  decided  that  the  existing  tariff  is  wrong  in  principle  and  griev- 
ously unjust  in  operation.  They  have  decided  as  free  men  must 
always  decide,  that  the  power  of  taxation  has  no  lawful  or  constitu- 
tional exercise  except  for  providing  revenue  for  the  support  of  Gov- 
ernment. .  .  . 

The  average  rate  of  duties  levied  under  the  existing  law  upon 
the  dutiable  goods  imported  in  1892  was  48.71  per  cent.  Had  the 
duties  proposed  in  the  present  bill  been  levied  upon  that  year's  im- 
portation of  dutiable  goods,  the  average  rate  on  them,  including 
those  we  transfer  to  the  free  list,  would  have  been-  30.31  per  cent. 
As  so  many  of  the  rates  of  the  present  law  are  really  prohibitory,  it  is 


762 


READINGS  IN  ECONOMIC  HISTORY 


impossible  to  say  what  its  real  rate  of  taxation  is,  but  it  is  safe  to 
affirm  that  it  is  much  higher  than  any  import  tables  will  disclose.  .  .  . 

DINGLE Y  REPORT,  1897 
Proposed  Revision  of  Tariff  —  Revenue  and  Protection 

MR.  DINGLEY,  from  the  Committee  on  Ways  and  Means,  sub- 
mitted the  following  report  (to  accompany  H.  R.  379): 

The  Committee  on  Ways  and  Means,  to  which  was  referred  the 
President's  message  convening  Congress  in  extraordinary  session  for 
the  purpose  of  raising  additional  revenue  required  to  meet  the  national 
expenses,  and  also  the  bill  (H.  R.  379)  entitled  "A  bill  to  provide 
revenue  for  the  support  of  the  Government  and  to  encourage  the  in- 
dustries of  the  United  States,"  beg  leave  to  submit  the  following 
report: 

For  nearly  four  years  the  revenue  has  been  inadequate  to  meet 
the  current  expenditures  and  pay  the  interest  on  the  war  debt.  The 
deficiency  during  this  period  has  been  as  follows: 

Fiscal  year  ended  June  30  — 

1894 $69,803,260 

1895 • ' 43,805,223 

1896 25,203,246 

1897  (estimated) 65,000,000 


Total  deficiency 203,81 1,729 

The  revenue  derived  from  duties  on  imports,  and  also  from  internal- 
revenue  taxes,  for  each  fiscal  year  beginning  with  1892  was  as  follows: 


Year 

From 
customs 

From  inter- 
nal revenue 

1892.  . 

$177,4.^2,064. 

$I?3,Q7I,O73 

I80V    . 

203,3^,016 

161,027,624 

l8OA      . 

131,818,530 

147,111,233 

1895.  . 

I  ?2,  I^8,6l7 

143,421,672 

1896.  . 

160  021,751 

146,762,864 

1897  (estimated)  .           

140,000,000 

150,000,000 

The  plain  duty,  therefore,  of  Congress  —  a  duty  emphasized  by 
the  President's  message  laid  before  the  House  on  the  opening  day 
of  this  extraordinary  session  —  is  to  so  revise  the  tariff  as  to  secure 


MANUFACTURES,  TARIFF,  AND  TRUSTS  763 

an  increase  of  revenue  from  duties  on  imports  substantially  equal  to 
what  has  been  lost,  first,  by  the  anticipated,  and  then  by  the  par- 
tially realized,  tariff  reductions  made  by  the  act  of  1894.  .  .  . 

Another  imperative  duty  resting  on  this  Congress  is  to  so  adjust 
duties  in  such  a  revision  of  the  tariff  to  secure  needed  revenue  to 
carry  on  the  Government  as  will  better  protect  the  many  industries 
which  have  so  seriously  suffered  the  past  three  years  from  unequal 
foreign  competition,  and  from  the  consequent  loss  of  purchasing  power 
of  the  masses  of  the  people,  upon  which  the  demand  for  products 
and  the  prosperity  of  every  citizen  depends.  .  .  . 

The  reciprocity  policy  inaugurated  in  the  tariff  of  1890,  which 
proved  so  great  a  success  in  the  brief  period  of  its  existence,  is  not 
only  restored,  but  enlarged.  The  provisions  of  the  act  of  1800, 
authorizing  the  President  to  impose  duties  on  coffee,  tea,  skins,  and 
hides,  in  case  the  countries  exporting  such  articles  decline  to  extend 
equivalent  concessions  to  exports  from  the  United  States,  are  re- 
enacted,  sugar  being  transferred  to  the  schedule  of  articles  on  which 
duties  are  imposed.  .  .  . 

D.   Tariff  Act  of  i pop1 

Changing  economic  conditions,  especially  the  growth  of  industrial  combina- 
tions and  the  rise  in  prices,  led  to  a  demand  that  the  tariff  be  revised.  In  1909, 
accordingly,  the  Payne-Aldrich  tariff  was  passed  by  a  Republican  administration. 
The  following  extract  is  taken  from  a  speech  in  defense  of  this  act  by  the  Hon. 
Charles  H.  Morgan  of  Missouri,  in  the  House  of  Representatives,  May  27,  1910. 
Here  the  claim  is  made  that  the  tariff  schedules  were  in  every  case  adjusted  to 
differences  in  the  cost  of  production  between  the  United  States  and  foreign  coun- 
tries. In  spite  of  the  large  claims  put  forth,  the  results  of  the  act  were  disappoint- 
ing, for  the  changes  downward  were  slight  and  unimportant,  while  the  monopolized 
industries  retained  their  former  high  rates. 

The  greatest  work  of  this  Congress,  and  one  that  reflects  the 
greatest  credit  upon  the  administration  and  will  be  its  chief  glory 
in  the  years  to  come,  is  the  enactment  of  the  Payne  law.  .  .  .  With 
the  Republican  Members  of  the  Committee  on  Ways  and  Means 
the  question  was  not  whether  the  rates  of  duty  as  provided  by  the 
Dingley  law  should  be  increased  or  reduced,  but  what  was  the  cost 
of  production  at  home  and  abroad.  In  other  words,  the  question  with 
them  was  one  of  protection  to  American  labor,  and  it  can  be  asserted 
truthfully  that  in  no  case  was  the  duty  increased  beyond  the  necessary 
rate  for  protection,  nor  was  it  knowingly  reduced  below  that  point. 

1  Congressional  Record.  6ist  Cong.,  ad  sess.  Vol.  45,  Part  IX,  Appendix 
(Washington,  1910),  285-6. 


764  READINGS  IN  ECONOMIC  HISTORY 

The  question  has  been  raised  whether  the  Payne  law  as  a  whole  was 
an  increase  of  rates  or  a  reduction  of  rates  upon  the  Dingley  law.  A 
comparison  of  the  two  laws  will  show  that  there  was  a  reduction  upon 
articles  of  common  use  throughout  the  country,  without  going  below 
a  protective  duty,  while  for  the  purposes  of  revenue  there  was  an 
increase  upon  articles  of  luxury.  In  a  speech  made  in  this  Chamber 
on  May  1 2  by  the  distinguished  chairman  of  the  Committee  on  Ways 
and  Means,  Hon.  SERENO  E.  PAYNE,  of  New  York,  whose  fairness  and 
ability  no  one  questions,  a  list  of  reductions  was  given  which  I  hope 
may  be  read  by  every  voter  in  the  country.  Among  the  articles 
upon  which  the  tariff  was  reduced  are  agricultural  implements, 
wagons,  mowers,  binders,  harrows,  rakes,  plows,  cultivators,  and 
thrashers.  Upon  these  articles  the  reduction  was  25  per  cent.  .  .  . 

As  shown  by  Mr.  PAYNE  and  Mr.  FORDNEY,  under  the  Payne 
law  there  has  been  a  decrease  in  the  tariff  on  goods  imported  into  this 
country  valued  at  about  $5,000,000,000,  while  there  has  been  an  in- 
crease in  the  tariff  on  goods  imported  valued  at  $241,000,000.  Let 
us  see  upon  what  character  of  goods  these  increases  have  been  made. 
First,  liquors,  alcoholic  compounds,  automobiles,  spirits,  wines  (in- 
cluding champagne  and  imported  liquors),  embossed  paper  and 
ornamental  things,  and  upon  zinc  ore  and  diamonds. 

There  has  been  much  said  here  and  throughout  the  country  as  to 
whether  this  revision  has  been  up  or  down,  and  whether  we  have  kept 
the  pledges  of  our  party,  made  at  Chicago.  The  mere  reading  of  the 
national  Republican  platform  of  1908  will  settle  in  the  minds  of  the 
most  skeptical  this  question.  .  .  . 

Not  one  word  as  to  a  revision  upward  or  downward,  but  a  plain, 
unequivocal  declaration  in  favor  of  protection,  by  a  duty  to  make  up 
the  difference  between  cost  abroad  and  at  home.  If  the  duty  under 
the  Dingley  law  was  found  too  low  to  make  up  this  difference,  it  was 
raised;  if  at  the  point,  it  was  left  alone;  if  found  above  the  point  of 
protection,  it  was  unhesitatingly  lowered;  and  the  law  as  it  now  stands 
is  a  real  compliance  with  the  party  policy  and  the  party  pledges. 
Can  any  honest  person,  reading  our  platform  and  comparing  the 
Payne  law  with  the  Dingley  law,  contend  for  a  moment  that  we  have 
not  carried  out  our  party  pledges?  We  have  kept  steadfastly  in  view 
the  interests  of  our  people  and  have  placed  a  duty  on  the  articles 
imported  from  foreign  countries,  the  rate  being  no  greater  and  no  less 
than  sufficient  to  meet  the  competition  of  cheap  foreign  labor  and  at 
the  same  time  maintain  the  higher  wages  paid  in  this  country  in  the 
mines,  the  factories,  the  mills,  and  on  the  farms. 


MANUFACTURES,   TARIFF,  AND  TRUSTS  765 

E.   Tariff  Act  of  igi3l 

In  spite  of  protectionist  defense  of  the  tariff  of  1909  there  was  strong  popular 
dissatisfaction  with  this  measure,  and  largely  as  a  result  of  this  feeling  the  Demo- 
crats were  returned  to  power  at  the  next  election,  pledged  to  revise  the  tariff  down- 
ward. Accordingly  they  passed  the  Underwood  tariff  of  1913,  which  materially 
reduced  duties  and  enlarged  the  free  list.  In  doing  this  a  considerable  sacrifice 
of  revenue  was  made,  which  they  aimed  to  make  good  by  the  passage  of  the  in- 
come tax  law  in  the  same  year. 

UNDERWOOD   REPORT,    1913 

To  Reduce  Tariff  Duties,  to  Provide  Revenue  for  the  Government,  and 
for  other  Purposes 

MR.  UNDERWOOD,  from  the  Committee  on  Ways  and  Means,  sub- 
mitted the  following  report. 

The  Committee  on  Ways  and  Means,  to  whom  was  referred  House 
bill  H.  R.  3321,  having  had  the  same  under  consideration,  report  it 
back  to  the  House  without  amendment  and  recommend  that  the 
bill  do  pass.  .  .  . 

The  tariff  situation  resulting  from  50  years  of  high  protective 
rates,  had  gradually  become  intolerable;  and  five  years  ago  the 
dissatisfaction  with  prevailing  duties  expressed  itself  in  so  unmis- 
takable a  manner  as  to  lead  to  a  revision  of  rates.  Twelve  years  of 
experience  since  the  revision  in  1897  had  shown  many  points  at  which 
bad  or  erroneous  work  had  been  done  during  the  hasty  process  of 
framing  and  passing  the  Dingley  Act.  Conditions  of  production  and 
of  business  organization  had  greatly  changed,  so  that  the  old  rates 
upon  many  commodities,  even  if  at  first  defensible,  had  become  ob- 
solete. A  very  great  and  increasing  dissatisfaction  on  the  part  of 
the  consuming  masses,  due  to  an  advance  in  prices  and  in  the  cost 
of  living,  constituted  the  important  factors  in  the  situation.  Tariff 
revision  in  1909  was  therefore  politically  unavoidable,  and  the 
country  had  reason  to  demand  of  the  party  then  in  authority  a 
modification  of  the  extreme  policy  which  had  for  many  years  been 
creating  and  aggravating  tariff  abuses. 

The  expectation  of  redress  was  blasted  by  the  tariff  act  of  1909. 
This  measure,  if  anything,  made  worse  the  conditions  which  had 
given  rise  to  its  passage.  It  brought  no  real  reduction  in  the  level 
of  rates  of  duty  prevailing,  and  for  some  commodities  resulted  in 

1  Report  of  the  Committee  of  Ways  and  Means.  636.  Cong.,  ist  sess.,  House 
Report  No.  5  (Washington,  1913),  i-xvii,  passim. 


766 


READINGS  IN  ECONOMIC  HISTORY 


advances,  due  largely  to  ^classifications  which  concealed  the  real 
rates.  .  .  . 

Again  commanded  by  the  electorate  in  the  autumn  of  1912  to 
renew  the  effort  at  tariff  revision,  and  encouraged  by  a  sweeping  vic- 
tory at  the  polls,  which  placed  every  branch  of  the  Government  in 
the  control  of  the  Democratic  Party,  the  Ways  and  Means  Com- 
mittee, after  due  deliberation,  have  completed  a  measure,  .  .  . 
intended  to  revise  the  whole  of  the  existing  system  of  tariff  rates.  .  .  . 

Certain  distinct  economic  developments  between  the  years  of 
1897  and  1913  must  be  studied  in  close  connection  with  the  working 
of  the  tariff  law.  .  .  . 

Probably  the  most  striking  economic  change  since  1897  has  been 
the  tremendous  increase  in  the  cost  of  living  —  a  situation  which  has 
attracted  the  anxious  attention  of  economists  the  world  over.  The 
following  figures  represent  the  relative  advance  in  living  costs  that 
has  taken  place  during  the  critical  part  of  the  period  in  question  in 
the  United  States: 


TABLE  i.  —  Relative  wholesale  prices,  and  per  cent  of  increase  over 


Commodity 

Price, 

1897 

Price, 
1900 

Increase 
over  1897 

Price, 
1910 

Increase 
over  1897 

Farm  products 

8s  2 

IOQ     C 

Per  cent. 
28  <; 

164  6 

Per  cent. 

O3    2 

Food.  ... 

87   7 

IO4    2 

18  8 

128  7 

4.6    7 

Clothing.  ... 

01  .  I 

106  8 

172 

12?    7 

3=5.8 

Metals  and  implements. 
Drugs  and  chemicals.  .  . 
House  furnishing  goods  . 
Miscellaneous  

86.6 

94-4 
89.8 

Q2  .  I 

120.5 

"5-7 
106.1 
IOQ  .  8 

39-i 
22.5 
18.1 

10-  2 

I28.S 
II7.O 

in  .6 

133  i 

48.2 

23-9 
24.2 
44.5 

All  commodities  

80.7 

110.  < 

2"?  .  I 

131  .6 

46.  7 

In  close  conjunction  with  the  advance  in  cost  of  living  and  with 
the  practical  reservation  of  the  field  of  domestic  production  to  the 
manufacturers  in  the  more  important  lines,  should  be  considered 
the  development  of  industrial  combinations  or  trusts  which  has  been 
so  active  during  recent  years.  .  .  . 

The  rapid  growth  in  population  and  the  failure  of  domestic 
resources  to  meet  the  demand  for  an  increased  supply  of  agricultural 
products,  and  in  some  respects  for  manufactured  goods,  have  been 
most  noteworthy  during  the  years  under  consideration.  That  the 
speedy  exhaustion  of  many  natural  resources  is  to  be  feared  unless 


MANUFACTURES,   TARIFF,   AND   TRUSTS  767 

access  to  a  fresh  supply  is  gained,  no  one  who  considers  the  subject 
from  an  unbiased  standpoint  can  doubt.  This  is  notably  true  in  the 
case  of  such  articles  as  timber,  ores,  minerals,  and  other  substances 
whose  supply  can  not  be  increased  and  whose  exhaustion  is  merely 
a  question  of  the  rate  at  which  they  are  taken  from  their  original 
sources.  That  the  protective  system  has  been  greatly  influential 
in  maintaining  a  too  rapid  rate  of  depletion  of  natural  resources  in 
order  to  satisfy  the  constantly  increasing  demands  of  a  rising  popula- 
tion is  an  unmistakable  fact.  .  .  . 

There  is  another  serious  condition  which  must  be  directly  attrib- 
uted to  the  tariff,  but  of  which  little  is  usually  said.  This  is  the  exist- 
ence of  obsolete  plants  and  methods  in  many  lines  of  industry,  old 
machinery  and  out-of-date  methods  being  continued  in  operation  for 
years  after  they  have  been  practically  eliminated  elsewhere.  .  .  . 
The  information  in  the  hands  of  the  Ways  and  Means  Committee 
strongly  confirms  the  belief  that  there  is  rarely  a  highly  protected 
industry  in  which  a  considerable  percentage  of  the  plants  and  machin- 
ery are  not  hopelessly  behind  the  times.  The  demand  for  high  pro- 
tective duties  is  necessarily  based  upon  the  supposed  requirements 
of  these  plants,  for  in  nearly  every  line  of  business  the  modern  and 
most  efficient  establishments  are  able  to  hold  their  own  against  any 
foreign  competition.  These  conditions  constitute  one  of  the  strongest 
arguments  in  favor  of  rectifying  the  conditions  complained  of  by  ap- 
plying the  impetus  of  moderate  competition.  .  .  . 

In  its  tariff-revision  work  the  committee  has  kept  in  mind  the 
distinction  between  the  necessaries  and  the  luxuries  of  life,  reducing 
the  tariff  burdens  on  the  former  to  the  lowest  possible  point  com- 
mensurate with  revenue  requirements  and  making  the  luxuries  of 
life  bear  their  proper  portion  of  the  tariff  responsibilities.  .  .  . 

The  committee  has  had  these  facts  in  mind  in  the  preparation  of 
H.  R.  3321  and  the  attempt  has  been  made  — 

1.  To  eliminate  protection  of  profits  and  to  cut  off  the  duties 
which  enable  industrial  managers  to  exact  a  bonus  for  which  no 
equivalent  is  rendered. 

2.  To  introduce  in  every  line  of  industry  a  competitive  tariff 
basis  providing  for  a  substantial  amount  of  importation,  to  the  end 
that  no  concern  shall  be  able  to  feel  that  it  has  a  monopoly  of  the 
home  market  gained  other  than  through  the  fact  that  it  is  able  to 
furnish  better  goods  at  lower  prices  than  others. 

It  is  felt  that  tariff  schedules  aiming  at  these  two  conditions  can 
damage  no  legitimate  industry  and  is  the  least  that  can  be  asked  by 


768  READINGS  IN  ECONOMIC  HISTORY 

those  who  desire  the  consumer  to  be  safeguarded  in  some  measure 
against  exploitation  by  monopolies  that  now  practically  dictate  prices 
in  the  domestic  field.  .  .  . 

III.  TRUSTS 

A.   The  Tendency  to  Consolidation,  ipoi  * 

The  movement  towards  large-scale  production  had  been  going  on  fairly  steadily 
for  half  a  century,  but  in  the  eighties  a  new  tendency  showed  itself  —  the  consolida- 
tion of  hitherto  competing  establishments  into  one  large  concern.  This  movement 
was  especially  rapid  after  1898,  and  to  its  consideration  the  Industrial  Commission 
devoted  four  volumes  of  its  report. 

The  tendency  to  consolidate  competing  establishments  in  various 
industries  has  been  so  pronounced  in  recent  years  as  to  create  much 
apprehension  of  monopoly.  ...  The  economic  advantages  of  com- 
bination, and  the  apparent  success  of  most  of  the  new  companies, 
have  led  many  of  the  ablest  business  men  and  economists  to  the 
conclusion  that  the  combinations  have  become  an  established  fac- 
tor in  the  industrial  life  of  the  nation.  Not  all  of  the  problems, 
however,  have  been  worked  out,  and  it  remains  to  be  seen  whether 
or  not  the  new  companies  are  as  safe  for  investment  as  the  old,  and 
whether  or  not  the  public  interest  is  in  any  way  endangered  by 
them.  .  .  . 

Until  after  the  close  of  the  civil  war  business  in  the  United 
States  was  so  much  localized,  on  account  of  the  lack  of  facilities  for 
transportation  and  the  relative  smallness  of  the  capital  invested, 
that  no  large  combinations  were  made. 

The  rapid  development  of  business  in  the  years  following  the  war, 
together  with  the  artificial  stimulus  given  to  certain  lines  of  industry, 
either  by  internal-revenue  legislation,  as  in  the  case  of  manufacture 
of  spirits,  or  by  the  special  demand  created  by  the  war  itself  and  by 
the  reaction  following  it,  led  to  several  combinations  of  a  wider  reach. 

These  pools  in  various  lines  of  business,  including  agreements  upon 
output  and  prices,  were  found  to  be  in  each  case  only  temporarily 
effective.  Whenever  prices  were  remunerative,  each  competing  manu- 
facturer naturally  found  it  desirable  to  extend  his  sales,  and  the 
agreement  was  likely  to  be  broken. 

The  application  by  the  courts  of  the  common  law  regarding  re- 
straint of  trade  also  tended  to  weaken  these  pools.  Under  the  com- 

1  Final  Report  of  the  Industrial  Commission.  (Washington,  1902),  XIX, 
595-600,  passim. 


MANUFACTURES,  TARIFF,  AND  TRUSTS  769 

mon  law,  both  in  England  and  in  this  country,  contracts  in  restraint 
of  trade  have  been  held  invalid.  It  is  true  that,  when  the  limitation 
has  covered  only  certain  sections  of  the  country  or  short  times,  con- 
tracts in  partial  restraint  of  trade,  if  considered  reasonable,  have 
been  regularly  upheld  by  the  courts. 

For  short  periods  these  pools  and  other  forms  of  price  and  selling 
agreements  were  very  common.  .  .  . 

The  managers  of  the  Standard  Oil  Company  of  Ohio  and  of  other 
companies  associated  with  it,  found  that  pools  and  ordinary  forms 
of  agreement  regarding  prices  and  output  did  not  give  sufficient 
power  over  the  various  members,  either  to  control  the  market  or  to 
secure  the  most  efficient  methods  of  production.  In  consequence 
this  company  first  devised  and  put  into  effect  the  so-called  trust 
agreement,  by  which  numerous  individuals,  firms,  and  corporations, 
formerly  competitors,  were  brought  together  in  1882  into  the  one 
Standard  Oil  Trust.  .  .  . 

This  success  in  harmonizing  divergent  interests  in  the  oil-refining 
industry  led  to  smilar  arrangements  in  other  industries.  The  Dis- 
tillers' and  Cattle  Feeders'  Company  (the  so-called  Whisky  Trust), 
the  Sugar  Refineries  Company  (the  Sugar  Trust),  and  other  similar 
organizations  with  large  capital  and  influence,  were  soon  established. 
.  .  .  Hostile  decisions  of  the  courts,  together  with  this  new  legisla- 
tion, forced  the  trusts  to  change  their  form.  The  Standard  Oil  Trust 
was  dissolved  in  1892.  .  .  . 

In  these  three  instances,  and  in  others,  the  trust  organization 
thus  became  a  combination  of  a  different  type.  In  the  case  of  the 
Standard  Oil  Company  a  mere  harmony  of  interests  united  separate 
corporations.  In  the  case  of  the  others  named,  a  new  corporation 
had  acquired  all  the  properties.  This  latter  form  of  organization, 
after  the  declared  illegality  of  the  trusts,  became  the  most  common 
whenever  it  seemed  advisable  to  organize  the  chief  competitors  in 
any  industry  under  a  single  management. 

The  tendency  of  business  toward  consolidation,  with  the  fact  that 
the  corporation  form  seemed  to  be  the  one  recognized  by  the  courts 
as  alone  feasible,  influenced  some  States,  desirous  of  attracting  capital, 
to  make  corporation  laws  favorable  to  combinations  desiring  to  do 
business  in  different  sections  of  the  country.  New  Jersey  particu- 
larly, but  also  Delaware,  West  Virginia,  and  others,  enacted  such 
laws.  These  laws  were  especially  liberal  in  permitting  corporations 
to  carry  on  their  business,  to  hold  directors'  meetings,  and  in  some 
cases  even  stockholders'  meetings,  outside  of  the  boundaries  of  the 


770  READINGS  IN  ECONOMIC  HISTORY 

incorporating  State.  Very  little  inspection  was  provided  for  or 
exercised.  The  chartered  tax  and  annual  franchise  tax  were  made 
light. 

These  laws,  so  favorable  to  corporations,  together  with  the  pres- 
sure of  competition  and  with  the  advantages  of  combination,  led  to 
a  very  rapid  increase  in  such  industrial  combinations. 

The  movement  toward  combination  began  among  the  railroads 
earlier  than  in  industrial  lines,  and  has  continued  to  the  present 
time.  .  .  . 

The  rapid  growth  of  capital,  with  the  advantages  for  its  use  which 
were  shown  to  follow  combination,  has  accelerated  consolidation  in 
recent  years.  When  goods  were  in  general  demand  over  wide  sec- 
tions of  the  country,  when  these  goods  were  of  a  certain  standard 
uniform  quality,  and  when  the  goods  were  bulky,  so  that  the  freight 
charges  formed  an  essential  part  of  the  cost,  it  was  found  that  a  com- 
bination in  the  production  of  such  goods  might  readily  secure  so  great 
an  advantage  over  its  smaller  rivals  that  the  tendency  toward  mo- 
nopoly became  strong.  Combinations  in  the  oil,  sugar,  salt,  and  sim- 
ilar industries  were  organized  early,  and  they  became  powerful.  When 
large  establishments  were  necessary  in  order  to  produce  at  the  lowest 
cost,  a  combination  had  a  decided  advantage  over  an  individual 
competitor  of  small  financial  strength.  Experience  further  showed 
then  when  expensive  advertising  was  necessary  to  popularize  special 
brands  or  trade-marks,  combinations  had  an  advantage  over  smaller 
concerns. 

These  three  influences  —  a  standard  product,  very  large  capital, 
and  popular  trade-marks  —  seem  to  have  been  particularly  powerful 
in  bringing  about  the  most  successful  combinations.  On  the  other 
hand,  whenever  it  it  necessary  for  the  producer  to  cater  to  the  taste 
of  the  individual  consumer,  it  is  much  more  difficult  to  form  efficient 
combinations.  It  is  true  that  in  some  cases  the  combination  may 
buy  up  individual  talent  or  genius,  and  in  that  way  secure  some 
control;  these,  however,  are  exceptional,  and  the  combination  can 
never  expect  to  secure  entire  control  of  special  talent. 

There  is  reason  to  believe  that  the  movement  toward  concentra- 
tion of  industry  will  go  steadily  on,  but  there  is  no  reason  for  think- 
ing that  within  measurable  time  the  combinations  will  cover  the  entire 
field  of  industry.  There  will  still  be  left  abundant  opportunity  for 
individual  ownership  and  management. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  771 

B.    The  Causes  of  Consolidation,  igoi x 

The  causes  that  led  to  the  formation  of  the  steel  trust  are  here  briefly  given. 
These  are  probably  typical  of  the  forces  that  led  to  the  movement  in  other  fields. 

In  1890  there  were  scarcely  any  consolidations  of  the  modern 
type  in  the  steel  industry.  With  only  a  few  exceptions  there  were 
no  concerns  with  a  capitalization  exceeding  or  even  approaching 
$20,000,000.  During  the  middle  nineties  there  was  a  gradual  change 
toward  larger  units,  both  by  expansion  and  by  combination;  but  the 
depressed  conditions  of  that  period  were  unfavorable  to  the  organiza- 
tion of  great  corporations,  and  as  late  as  1898  the  steel  industry  was 
characterized  by  the  competition  of  a  large  number  of  independent 
concerns.  The  year  1898,  however,  witnessed  a  marked  advance 
toward  consolidation.  This  movement  progressed  with  great  rapidity 
in  the  next  few  years,  until  by  the  middle  of  1901  substantially  three- 
fifths  of  the  steel  industry  of  the  country  was  concentrated  under  a 
single  organization  —  the  United  States  Steel  Corporation  —  with  an 
issued  capitalization,  including  bonded  indebtedness,  of  over  $1,400,- 
000,000.  .  .  . 

While  the  failure  of  the  various  pools  in  the  iron  and  steel  trade  to 
establish  permanently  effective  control  over  the  production  and  prices 
of  iron  and  steel  products  was  undoubtedly  an  important  cause  of 
outright  consolidation  as  a  surer  method  of  restricting  or  eliminating 
competition,  consolidation  was  not,  however,  resorted  to  for  this 
purpose  alone.  The  underlying  causes  of  consolidation  in  the  steel 
industry,  which  were  substantially  the  same  as  those  operating  in 
other  great  industries,  may  be  denned  as  follows: 

1.  The  restriction  of  competition. 

2.  Integration;    that  is,  the  linking-up  of  productive  processes 
through  the  acquisition,  under  one  control,  of  raw  materials  and 
manufacturing  plants  (and  in  some  cases  transportation  facilities), 
and  through  extensions  and  coordination  of  manufacturing  processes. 

3.  The  creation  of  a  great  amount  of  inflated  securities. 

The  first  of  these  causes,  namely,  the  restriction  or  elimination  of 
competition,  was  undoubtedly  the  most  potent.  Indeed,  the  organ- 
izers of  some  of  these  great  consolidations  have  admitted  that  a  desire 
to  control  or  eliminate  competition  was  the  chief  reason  for  their 
formation.  This  was  undoubtedly  true  of  many  consolidations  in  the 
steel  industry.  .  .  . 

1  Report  of  the  Commissioner  of  Corporations  on  the  Steel  Industry.  (Washing- 
ton, 1911),  I,  63,  82-4. 


772  READINGS  IN  ECONOMIC  HISTORY 

It  is  worth  pointing  out  that  the  technical  economies  of  integration 
were  chiefly  connected  with  combining  and  coordinating  the  succes- 
sive stages  of  manufacture,  which  resulted  in  the  saving  of  fuel  for 
reheating  the  metal,  of  labor  and  time  in  the  moving  or  handling  of 
material,  and  in  the  utilization  of  by-products,  such  as  blast-furnace 
gas. 

As  distinct  from  economies  thus  brought  about  through  such  en- 
largement and  coordination  of  plants,  consolidation  afforded  a  means 
for  saving  the  payment  of  profits  to  others  on  the  purchase  of 
materials.  .  .  . 

The  third  cause  above  enumerated,  namely,  the  opportunity  to 
obtain  profits  from  flotation  of  new  securities,  was  undoubtedly 
a  very  important  influence  in  the  consolidation  movement.  Indeed, 
the  proportions  of  this  movement  were  largely  determined  by  the 
opportunity  to  market  the  securities  thus  created.  So  long  as  the 
demand  for  such  issues  was  maintained  the  supply  was  steadily 
increased.  .  .  . 

C.   Alleged  Advantages  of  Combination,  1897  l 

A  rather  hostile  report  was  made  by  a  committee  of  the  New  York  state  legis- 
lature on  the  subject  of  trusts  from  which  a  short  extract  on  the  alleged  advantages 
is  given. 

Let  us  consider  some  of  the  chief  advantages  that  are  claimed 
to  exist  in  favor  of  these  combinations  so  far  as  they  affect  the  public. 

The  main  advantage  is  stated  to  be  that  of  economy  in  produc- 
tion reflected  in  lower  prices  to  the  consumer.  The  fact  that  large 
economies  must  of  necessity  accrue,  admits  of  no  denial.  But  are 
these  followed  by  lower  prices  to  the  consumer?  We  find  nothing 
upon  the  record  to  justify  any  such  conclusion.  It  is  true  that  sugar, 
for  example,  costs  less  to-day  than  it  did  prior  to  the  time  when  the 
competing  companies  combined.  But  it  is  equally  true  that  the  cost 
of  the  raw  material  has  declined  to  a  greater  extent  than  has  the  price 
of  the  refined  article.  Hence  the  consumer  has  not  received  the  full 
benefit  of  the  decline  in  the  raw  material,  while  he  has  had  no  share 
whatever  in  the  diminished  cost  of  production.  In  other  cases  com- 
bination was  immediately  followed  by  an  advance  in  the  price  of  the 
product.  In  fact  there  is  nothing  upon  the  record  which  indicates 
that  combination  itself  effected  any  reduction  in  the  price  to  the 

1  Report  and  Proceedings  of  the  Joint  Committee  of  the  Senate  and  Assembly 
Appointed  to  Investigate  Trusts.  (Albany,  1897),  15-18. 


MANUFACTURES,   TARIFF,   AND   TRUSTS  773 

consumer,  or  that  the  latter  was  considered  with  reference  to  any 
share  in  the  profit,  all  elements  of  economy  being  credited  rather 
to  the  upbuilding  of  the  earning  capacity  of  the  capital  stock. 

The  record  does  show,  on  the  other  hand,  that  a  combination 
controlling  80  per  cent,  of  a  staple  product,  hence  a  purchaser  of  80 
per  cent,  of  the  raw  material,  could  and  did  exert  substantial  influence 
on  the  price  of  raw  material,  and  could,  by  dint  of  that  influence,  force 
down  the  price  of  raw  material  to  a  point  which  enabled  it  to  appear 
as  having  decreased  the  price  of  the  finished  product  to  the  consumer. 
We  point  to  this  as  a  noteworthy  incident  indicating  the  power  of  a 
combination  thus  organized,  and  illustrating  the  influence  of  all  sim- 
ilar aggregations  on  the  price  of  raw  material  wherever  the  effect 
of  combined  resources  can  not,  from  the  nature  of  conditions,  be  offset 
by  similar  combinations  between  widely  distributed  producers. 

Another  advantage  which  is  said  to  flow  from  combination,  is  that 
of  a  more  perfect  product.  There  is  nothing  upon  the  record  to  justify 
this  conclusion.  While  it  may  be  that  the  normal  tendency  of  busi- 
ness is  to  secure  the  largest  market,  and  with  that  end  in  view  to  give 
the  greatest  satisfaction  to  the  buyer,  it  is  quite  clear  that  substan- 
tially undisputed  control  of  both  product  and  market  enables  a  com- 
bination to  economize  in  quality  without  fear  of  pernicious  results. 

Another  advantage  is  alleged  to  be  that  of  better  wages  and  more 
constant  employment  of  labor.  We  are  equally  unable  to  reach  this 
conclusion.  No  part  of  the  profit  arising  from  admitted  economies, 
and  resulting  in  large  dividends  on  inflated  stocks,  has  reached  labor 
in  the  form  of  increased  wages,  while  the  claim  of  constancy  of  employ- 
ment is  negatived  by  the  fact  that  factories  in  operation  for  a  genera- 
tion have  been  closed,  and  that  workingmen,  more  or  less  continually 
employed  for  years  in  a  factory  independently  operated,  have  been 
discharged  upon  its  absorption  by  the  combination.  Combinations 
owning  factories  located  in  different  States  are  thereby  enabled  to 
and  do  at  will,  here  and  there,  close  factories  permanently  or  for  long 
periods  of  time;  possessing  factories  of  a  capacity  sufficient  to  supply 
all  demands,  with  a  surplus  of  40  per  cent.,  they  may  at  any  time 
cause  factories  in  many  localities  to  remain  temporarily  or  perma- 
nently idle  and  thus  reduce  the  worker  to  a  condition  of  absolute 
uncertainty. 

Still  another  alleged  advantage  is  that  of  stability  of  price  to  the 
consumer.  This  mUst  be  admitted.  But  the  question  is  whether 
the  fixing  of  a  stable  price  operates  to  his  advantage.  It  is  an  ab- 
normal and  not  a  natural  condition  —  a  price  fixed  at  the  maximum 


774  READINGS  IN  ECONOMIC  HISTORY 

that  the  consumer  will  pay  consistent  with  the  marketing  of  the  largest 
volume  of  product  practicable.  The  fixing  of  the  price,  whereby  the 
producer  is  able  to  retain  all  the  benefits  of  economy  and  concentration 
for  himself,  is  not  that  kind  of  stability  in  values  which  appeals  with 
special  force  to  the  consuming  public.  The  kind  of  stability  which 
revolutionizes  the  law  of  supply  and  demand  and  enables  the  combina- 
tion to  hold  its  products  at  a  fixed  price  without  regard  to  the  tendency 
of  prices  and  through  times  of  depression  such  as  have  been  experi- 
enced for  the  past  four  years,  when  commodities  generally  have  fallen 
ratably  in  the  markets,  to  maintain  prices  fixed  by  its  arbitrary  deci- 
sion, produces  an  inequality  among  the  people  which  may  scarcely 
be  described  as  an  advantage  except  to  the  combination  itself. 

D.   Effects  of  Industrial  Combinations  upon  Prices  and  Wages,  1900  1 

Data  on  these  subjects  were  collected  by  the  Department  of  Labor  and  com- 
mitted to  Professor  Jenks  for  analysis  and  discussion.  The  conclusions  therefore 
bear  an  official  sanction  and  may  be  regarded  as  fair  and  unbiased.  Professor 
Jenks  is  professor  of  economics  at  New  York  University,  and  has  written  much 
on  the  subject  of  trusts. 

This  study  of  facts  regarding  industrial  combinations  embodies 
the  results  of  reports  made  by  41  combinations.  .  .  . 

Prices  Fixed  by  Combinations. —  Probably  the  most  important 
economic  effect  of  the  combinations  is  to  be  found  in  their  influence 
upon  prices;  next,  that  of  their  influence  upon  wages.  Before  enter- 
ing upon  the  study  of  the  course  of  prices  before  and  after  the  forma- 
tion of  certain  special  combinations  it  will  be  useful  to  note  the  direct 
efforts  made  by  the  combinations  to  fix  prices  for  the  consumers. 
Out  of  twenty-eight  combinations  answering  the  question  as  to 
whether  the  organization  fixed  the  prices  at  which  dealers  shall  sell 
to  the  consumers  two  only  answered  in  the  affirmative.  They  state 
that  the  penalty  for  making  any  variation  from  the  price  fixed  was  the 
cutting  off  of  the  supply.  Twenty-four  of  the  combinations  answered 
the  question  directly  in  the  negative  and  two  reported  that  they  did 
not  sell  to  dealers,  while  thirteen  made  no  answer.  It  is  not  unlikely 
that  an  effort  more  or  less  determined  is  made  by  these  silent  com- 
binations to  fix  prices,  although  one  could  not  make  that  assumption 
regarding  them  all.  One  combination  stated  that,  while  not  attempt- 
ing to  fix  prices,  it  did  give  an  additional  discount  to  those  customers 

1  Trusts  and  Industrial  Combinations.  By  Jeremiah  W.  Jenks.  Bulletin  of 
the  Department  of  Labor.  July,  1900  (Washington,  1900),  663,  707-8,  764-5, 
678,  682-3. 


MANUFACTURES,   TARIFF,  AND  TRUSTS  775 

who  dealt  exclusively  with  it,  and  in  several  cases  the  larger  buyers 
receive  special  discounts  beyond  those  given  to  the  smaller  ones.  .  .  . 

In  order  to  determine  what  has  in  fact  been  done  by  the  combina- 
tions, it  is  necessary  to  make  a  direct  comparison  between  the  prices 
of  the  raw  materials  and  of  the  finished  product.  The  profits  which 
are  to  be  affected  depend  mainly  upon  the  difference  between  the 
two.  .  .  . 

The  general  result  of  the  study  of  the  prices  in  the  preceding 
tables  in  the  specific  instances  where  the  margin  between  the  price 
of  the  raw  material  and  of  the  finished  product  can  be  definitely 
ascertained,  and  where  the  writer  has  sufficient  information  regard- 
ing the  processes  so  that  the  reasons  for  the  variations  in  the  prices 
can  be  adequately  checked,  seems  to  show  that  the  combinations 
have  hi  some  cases  had  the  power,  temporarily  at  least,  to  control 
the  market  to  a  considerable  extent,  and  that  in  most  such  cases  they 
have  used  this  power  to  increase  the  margin  between  the  raw  material 
and  the  finished  product  —  possibly  by  forcing  the  price  of  the 
finished  material  up  or  by  forcing  the  price  of  the  raw  material 
down;  possibly  in  certain  instances  the  power  has  been  exerted  in 
both  ways.  At  any  rate  the  margin  has  increased,  and  with  this, 
beyond  question,  the  profits  of  the  manufacturers.  On  the  other 
hand,  several  instances  to  which  attention  has  been  called  show  that 
apparently  this  power  is  by  no  means  sufficient  to  remove  the  com- 
bination from  the  influence  of  competition,  either  actual  or  potential, 
and  that  in  a  good  many  instances,  within  a  comparatively  short 
time  after  the  formation  of  the  combination,  the  margin  has  again 
decreased  until  it  was  as  small  as  before  the  formation  of  the  com- 
bination, at  times  even  smaller.  It  is  to  be  expected  usually,  of  course, 
that  as  time  passes  improvements  in  methods  of  production  will  lessen 
the  cost,  and  that  in  consequence,  with  the  same  profits,  the  margin  will 
decrease  somewhat.  If  the  combinations  have  been  enabled  to  make 
the  economies  that  their  promoters  ordinarily  promise,  this  decrease 
in  the  margin  would  be  expected,  even  though  their  profits  were  to  in- 
crease somewhat.  The  fact  that  the  power  to  increase  the  margin, 
temporarily  at  least,  somewhat  arbitrarily,  and  the  fact  that  this 
margin  has  been  increased  in  specific  cases,  seem  to  be  clearly  estab- 
lished. Here  again,  however,  one  needs  to  be  warned  somewhat 
against  too  radical  or  too  general  conclusions.  .  .  . 

Wages. —  Next  in  importance  to  the  effect  of  industrial  com- 
binations upon  prices,  if  indeed  not  equally  important,  is  their  effect 
upon  wages.  .  .  . 


776  READINGS  IN  ECONOMIC  HISTORY 

It  will  be  noted  that  among  skilled  laborers  the  increase  in  the 
numbers  of  different  classes  comes  chiefly  in  those  receiving  from 
$35  to  $40  and  $45  to  $50  a  week,  so  far  as  the  higher-priced  ones  are 
concerned.  A  notable  increase  is  also  shown  for  those  receiving  from 
$15  to  $20  and  $20  to  $25  a  week.  There  was,  on  the  other  hand, 
a  tendency  to  lessen  the  number  of  the  more  poorly  paid  men.  .  .  . 

It  would,  of  course,  be  too  much  to  say  that  these  results  show 
the  general  effect  of  combinations  on  wages.  The  returns  are  not 
numerous  enough.  Besides  that,  many  of  the  combinations  were 
formed  at  the  beginning  of  a  period  of  general  industrial  prosperity, 
so  that  an  increase  in  wages  was  perhaps  to  be  expected.  The  tables 
do  show,  so  far  as  the  figures  go,  that  these  combinations  have  not 
decreased  wages  among  these  classes  of  wage  earners.  Like  tenden- 
cies appear  also  hi  the  tables  regarding  large  private  companies.  .  .  . 


CHAPTER  XXII 
POPULATION  AND  LABOR,   1860-1915 

I.   POPULATION 

A.  Growth  of  Population,  ijgo-igio  J 

The  growth  of  the  population  of  the  United  States  since  the  taking  of  the 
first  census  is  here  shown.  It  should  be  noted  that  while  there  is  a  steady  increase 
in  numbers  the  rate  of  increase  is  falling  off. 

Continental  United  States.  —  The  population  of  continental  United 
States  is  91,972,266.  Compared  with  the  population  of  75,994,575  in 
1900,  this  represents  an  increase  during  the  past  decade  of  15,977,691, 
or  21  per  cent.  The  rate  of  increase  was  slightly  greater  than  during 
the  preceding  decade,  1890-1900,  when  it  was  20.7  per  cent. 

The  table  following  shows  the  population  of  continental  United 
States  as  enumerated  at  each  census  from  1790  to  1910,  inclusive, 
together  with  the  increase  and  per  cent  of  increase  during  each  decade, 
and  also  adjusted  percentages  of  increase  explained  in  the  paragraphs 
below  [see  table  on  page  778]. 

B.  The  Increase  of  Population,  igoo 2 

Some  of  the  more  important  results  of  an  analysis  of  the  population  statistics 
of  the  census  of  1900  are  here  given.  Professor  Willcox  is  professor  of  statistics 
at  Cornell  University. 

The  main  results  of  the  discussion  of  increase  of  population  in  this 
bulletin  may  be  stated  briefly  as  follows:  .... 

5.  Only  one  country,  Argentina,  has  shown  by  the  most  recent 
figures  a  more  rapid  rate  of  growth. 

6.  The  present  rate  of  growth  in  continental  United  States  is  prob- 
ably double  the  average  rate  of  Europe,  is  nearly  double  that  of 
Canada,  exceeds  by  one-sixth  that  of  Mexico,  and  by  one-tenth  that 
of  Australia. 


1  Thirteenth  Census  of  the  United  States.     Taken  in  the  Year  1910.     Volume  I: 
Population  (Washington,  1913),  24. 

2  A  Discussion  of  Increase  of  Population.     By  W.  F.  Willcox.     United  States 
Census  Office,  Bulletin  4  (Washington,  1903),  5-6. 


778 


READINGS  IN   ECONOMIC   HISTORY 


CENSUS   YEAR  * 

Population  of 
continental 
United  States 

INCREASE  OVER  PRECEDING 
CENSUS 

Percentage 
of  increase 
with 
correction 
for  1870 
and  1880  l 

Number 

Per  cent. 

IQIO.  . 

91,972,266 
75,994,575 
62,947,714 
50,155,783 
38,558,371 
31,443,321 
23.191,876 
17,069,453 
12,866,020 

9,638,453 
7,239,881 
5,308,483 
3,929,214 

15,977,^91 
13,046,861 

12,791,931 
",597,412 

7,115,050 

8,251,445 
6,122,423 
4,203,433 
3,227,567 
2,398,572 
.    i,93i,398 
1,379,269 

21  .0 
20.7 

25-5 
30.1 
22.6 
35-6 

35-9 
32.7 
33-5 
33-i 
36-4 
35-i 

21  .0 

20.7 
24.9 

26.0 

26.6 

35.6 

35-9 
32.7 
33-5 
33-i 
36.4 
35-i 

IQOO  .  . 

l8oO  . 

l88o.  .  .  . 

l8?0.  . 

i860.  . 

i8<?o   . 

1  84O  .    . 

1810.  . 

1820.  .  .  . 

1810.  .  .  . 

1  800  

I7QO.  . 

8.  Among  the  5  main  divisions  of  continental  United  States  the 
highest  rate  of  increase  is  found  in  the  Western  division  and  the  lowest 
in  the  North  Central.  .  .  . 

10.  In  1790  the  northern  and  the  southern  groups  of  states  had 
almost  equal  populations,  but  through  the  following  hundred  years  — 
with  an  insignificant  and  probably  only  apparent  exception  in  one 
decade  —  the  North  steadily  gained,  until  in  1800  its  population  was 
almost  double  that  of  the  South.  .  .  . 

11.  In  the  decade  of  1890  to  1900,  on  the  contrary,  for  the  first 
time  in  our  national  history  the  Southern  states  increased  faster  than 
the  Northern,  if  allowance  be  made  for  the  undercount  in  1870.  .  .  . 

15.  The  region  east  of  the  Mississippi  increased  more  rapidly  from 
1890  to  i  ocx)  than  from  1880  to  1890,  while  that  west  of  the  Mississippi 
increased  in  the  later  decade  not  much  more  than  half  as  fast  as  in 
the  earlier. 


1  The  evidence  is  clear  that  there  was  a  marked  deficiency  in  the  enumeration 
of  the  population  in  the  southern  states  in  1870,  resulting  in  an  understatement 
of  the  increase  from  1860  to  1870  and  an  overstatement  of  the  increase  from  1870 
to  1880.  There  is  no  means  of  ascertaining  accurately  the  extent  of  the  deficiency, 
but  an  approximate  estimate  of  the  true  population  in  1870  was  made  in  the  census 
report  of  1890  (Population.  Part  I,  pp.  xi,  xii,  and  xvi)  by  which  the  population 
in  1870  was  placed  at  39,818,449  instead  of  38,558,371.  Using  this  figure  the 
increase  of  1870  over  1860  would  be  8,375,128,  or  26.6  per  cent,  and  the  increase 
of  1880  over  1870,  10,337,334,  or  26  per  cent. 


POPULATION    AND    LABOR  779 

16.  The  increased  growth  of  the  East  and  the  decreased  growth 
of  the  West  may  both  be  connected  with  a  probable  decline  in  the 
current  of  westward  migration.  .  .  . 

20.  ...  The  growth  of  population,  an  important  index  of  pros- 
perity, was  more  evenly  distributed  over  the  country  between  1890 
and  1900  than  between  1880  and  1890.  .  .  . 

23.  The  most  noteworthy  result  of  the  entire  discussion  is  the 
cumulative  evidence  of  the  rapid  approach  to  equality  in  the  rates 
of  increase  of  various  parts  of  the  United  States.  This  appears 
whether  North  be  compared  with  South,  East  with  West,  or  city  with 
country. 

C.    The  West-ward  Movement,  1880  l 

The  year  1880  has  usually  been  said  to  have  marked  the  passing  of  the  American 
frontier.  By  this  is  meant  that  there  was  now  practically  continuous  settlement 
from  the  Atlantic  to  the  Pacific  oceans,  though  it  was  still  very  sparse  in  the  western 
states.  The  effect  of  the  railroads  in  promoting  western  settlement  is  indicated 
in  the  following  extract. 

In  tracing  the  history  of  the  settlement  of  our  country  we  are  now 
brought  down  to  the  latest  census,  that  of  1880.  During  the  decade 
just  past  Colorado  has  been  added  to  the  sisterhood  of  states.  The 
first  point  that  strikes  us  in  examining  the  map  showing  the  areas  of 
settlements  at  this  date,  as  compared  with  previous  ones,  is  the  great 
extent  of  territory  which  has  been  brought  under  occupation  during 
the,  past  ten  years.  Not  only  has  settlement  spread  westward  over 
large  areas  in  Dakota,  Nebraska,  Kansas,  and  Texas,  thus  moving  the 
frontier  line  of  the  main  body  of  settlement  westward  many  scores  of 
miles,  but  the  isolated  settlements  of  the  Cordilleran  region  and  of  the 
Pacific  coast  show  enormous  accessions  of  occupied  territory.  .  .  . 

The  most  notable  change  in  New  England  and  the  middle  states, 
including  Ohio  and  Indiana,  has  been  the  increase  in  density  of  popu- 
lation and  the  migration  to  cities,  with  the  consequent  increase  of 
the  urban  population.  .  .  .  Throughout  the  southern  states  there  is 
to  be  noted,  not  only  a  general  increase  in  the  density  of  population 
and  a  decrease  of  unsettled  areas,  but  a  greater  approach  to  uniformity 
of  settlement  throughout  the  whole  region.  ...  In  Wisconsin  the  un- 
settled area  is  rapidly  decreasing  as  railroads  stretch  their  arms  out 
over  the  vacant  tracts.  In  Minnesota  and  in  eastern  Dakota  the  build- 
ing of  railroads,  and  the  development  of  the  latent  capabilities  of  this 
region  in  the  cultivation  of  wheat,  have  caused  a  rapid  flow  of  settle- 

1  Statistics  of  the  Population  of  the  United  States  at  the  Tenth  Census.  (Wash- 
ington, 1883),  I,  xix-xx. 


780  READINGS  IN  ECONOMIC  HISTORY 

ment,  and  now  the  frontier  line  of  population,  instead  of  returning 
•to  Lake  Michigan,  as  it  did  ten  years  ago,  meets  the  boundary  line  of 
the  British  possessions  west  of  the  gyth  meridian.  The  settlements 
in  Kansas  and  Nebraska  have  made  great  strides  over  the  plains, 
reaching  at  several  points  the  boundary  of  the  humid  region,  so  that 
their  westward  extension  beyond  this  point  is  to  be  governed  here- 
after by  the  supply  of  water  in  the  streams.  .  .  .  Texas  also  has  made 
great  strides,  both  in  the  extension  of  the  frontier  line  of  settlement 
and  in  the  increase  in  the  density  of  population,  due  both  to  the  build- 
ing of  railroads  and  to  the  development  of  the  cattle,  sheep,  and 
agricultural  interests.  The  heavy  population  in  the  prairie  portions 
of  the  state  is  explained  by  the  railroads  which  now  traverse  them.  .  .  . 

Of  all  the  states  and  territories  of  the  Cordilleran  region  Colorado 
has  made  the  greatest  stride  during  the  decade.  From  a  narrow  strip 
of  settlement,  extending  along  the  immediate  base  of  the  Rocky  moun- 
tains, the  belt  has  increased  so  that  it  comprises  the  whole  mountain 
region,  beside  a  great  extension  upon  the  plains.  This  increase  is 
the  result  of  the  discovery  of  very  extensive  and  very  rich  mineral 
deposits  about  Leadville,  producing  a  "stampede"  second  only  to 
that  of  '49  and  '50  to  California.  .  .  . 

The  length  of  the  frontier  line  in  1880  is  3,337  miles.  The  area 
included  between  the  frontier  line,  the  Atlantic  and  the  Gulf  coast, 
and  the  northern  boundary  is  1,398,945  square  miles.  .  .  . 

The  population  is  50,155,783,  and  the  average  density  of  settle- 
ment is  32  to  the  square  mile. 

D.   Growth  of  Cities,  1 790- 1880  l 

The  urban  concentration  of  the  population  began  on  a  considerable  scale 
about  the  middle  of  the  nineteenth  century,  and  has  proceeded  hand  in  hand 
with  the  development  of  manufactures  and  of  improved  transportation  facilities. 

The  growth  of  cities  in  the  United  States  has  formed  a  marked 
feature  of  our  social  and  industrial  history.  The  following  table 
shows  the  number  of  cities  of  8,000  inhabitants  and  over  at  each  census, 
beginning  in  1790,  and  the  aggregate  urban  population  of  the  country 
in  comparison  with  the  total  population  at  corresponding  periods: 

From  this  table  it  appears  that,  speaking  roundly,  in  1790  one- 
thirtieth  of  the  population  of  the  country  was  found  in  cities;  in  1800, 
one- twenty-fifth;  in  1810,  and  again  in  1820,  one-twentieth;  in  1830, 


1  Report,  on  the  Manufactures  of  the  United  States  at  the  Tenth  Census.     (Wash- 
ington, 1883),  II,  xxii. 


POPULATION    AND    LABOR 


781 


Date 

Population  of 
United  States 

Number 
of  cities 

Population  of 
cities 

Inhabitants 
of  cities  in 
each  too  of 
total  popu- 
lation 

I7QO.  . 

7  Q2O  2IA. 

6 

I800  

5,  *08,48  3 

6 

•6 

1810  

7,239,881 

l820  

0,6^3,822 

i  ? 

1830.  . 

I2,866,O2O 

->() 

6    7 

1840  

17,060,4^? 

4.J. 

I  J.^3  OOA 

8  <c 

i8so   . 

23  191  876 

Sc 

->  8gy  586 

1860  

31,44.3,  321 

TAT 

16  i 

1870.  . 

38,^8,371 

226 

8  071  87=; 

1880  

^0,1  =1^,78^ 

286 

II    3l8  sA7 

22   <; 

one-fifteenth;    in  1840,  one-twelfth;    in  1850,  one-eighth;    in  1860, 
one-sixth;    in  1870,  one-fifth;    and  in  1880,  two-ninths. 

It  would  be  difficult  to  say  in  what  proportion  the  growth  of  the 
cities  of  the  country,  as  a  body,  has  been  due  to  commercial,  and  in 
what  proportion  to  industrial  forces,  even  had  we  official  statistics 
covering  our  internal  traffic,  which  we  have  not;  but  I  conceive  that 
no  one  will  hesitate  to  assent  to  the  proposition  that  the  growth  of 
the  cities  of  the  United  States  since  1850  has  been  due  in  far  greater 
measure  to  their  development  as  manufacturing  centers  than  to  their 
increased  business  as  centers  for  the  distribution  of  commercial 
products.  .  .  . 

E.    Urban  Concentration,  i88o-igio  1 

One  of  the  most  striking  phenomena  in  the  movement  of  the  population  during 
the  last  half  century  has  been  the  increase  in  the  urban  and  the  relative  decrease 
in  the  rural  population.  This  has  been  made  possible  by  improvements  in  agri- 
culture which  have  set  free  a  large  part  of  those  formerly  needed  on  the  farms 
and  on  the  other  hand  by  the  growth  of  manufactures  which  have  absorbed  this 
available  labor. 

The  Census  Bureau  classifies  as  urban  population  that  residing 
in  cities  and  other  incorporated  places  of  2,500  inhabitants  or  more, 
including  New  England  towns  of  that  population.  .  .  . 

Proportion  urban  and  rural. —  The  proportion  of  the  total  popula- 
tion living  in  urban  and  in  rural  territory  at  the  censuses  of  1910, 

1  Thirteenth  Census  of  the  United  States,  Taken  in  the  Year  igio.  Volume  I: 
Population  (Washington,  1913),  53,60. 


782 


READINGS  IN  ECONOMIC  HISTORY 


1900,   1890,  and  1880,  respectively,  for  continental  United  States, 
is  shown  in  the  following  table: 


CLASS 

POPULATION   OF   CONTINENTAL  UNITED   STATES 

IQIO 

1900 

1890 

1880 

Total.  .  .  . 

91,972,266 
42,623,383 
49,348,883 

75.994,575 
30,797,185 

45,197,39° 

62,947,714 
22,720,223 
40,227,491 

50,155,783 
14,772,438 
35,383,345 

Urban.  . 

Rural  

Total  

PER  CENT  DISTRIBUTION 

IOO.O 
46.3 

53-7 

IOO.O 

40.5 
59-5 

IOO.O 

36.1 

63-9 

IOO.O 

29-5 
70.5 

Urban  

Rural  

This  table  shows  a  steady  and  rapid  increase  in  the  proportion  of 
urban  population.  While  the  increase  in  the  percentage  of  urban 
population  from  1900  to  1910  was  appreciably  greater  than  from 
1890  to  IQOO,  it  was  not  so  great  as  from  1880  to  1890.  .  .  . 

Increase  in  urban  and  rural  population. —  In  order  to  compare  the 
rate  of  growth  in  urban  and  rural  communities,  it  is  necessary  in  each 
case,  as  previously  explained,  to  consider  the  changes  in  population 
which  have  occurred  in  the  same  territory  from  one  decennial  census 
to  another.  For  this  purpose  communities  are  classed  as  urban  or 
rural  according  to  their  population  in  1910,  and  the  population  of 
the  places  as  thus  classified  is  then  determined  for  1000  for  purposes 
of  comparison. 

The  increase  from  1900  to  1910  in  urban  and  rural  population  on 
this  basis  is  shown,  for  continental  United  States,  in  the  following  table: 


CLASS 

POPULATION   IN  — 

INCREASE,  1900-1910 

1910 

IQOO 

Number 

Per 
cent. 

T 

Urban 
Rural 

otal  population  

91,972,266 
42,623,383 
49,348,883 

75,994,575 
31,609,645 
44,384,930 

i5,977,69i 
11,013,738 

4,963,953 

21  .O 

34-8 

II.  2 

territory  in  1910  

territory  in  1910  

POPULATION    AND    LABOR  783 

The  rate  of  increase  for  the  population  of  urban  areas  was  over 
three  times  that  for  the  population  living  in  rural  territory. 

II.   IMMIGRATION 

A.   Immigration,  1882-1910  l 

The  exhaustion  of  available  free  land  for  settlement,  together  with  the  rapid 
growth  of  the  population,  directed  attention  about  1910  to  the  increase  in  immi- 
gration of  the  previous  decade,  and  especially  to  the  changing  character  of  the 
immigration.  Accordingly  a  commission  of  nine  persons  was  created  to  investi- 
gate and  report  upon  the  subject.  They  made  an  exhaustive  report  in  forty- two 
volumes. 

SOURCES    OF    IMMIGRATION    AND    CHARACTER    OF    IMMIGRANTS 

From  1820  to  June  30,  1910,  27,918,992  immigrants  were  admitted 
to  the  United  States.  Of  this  number  92.3  per  cent  came  from  Euro- 
pean countries,2  which  countries  are  the  source  of  about  93.7  per  cent 
of  the  present  immigration  movement.  From  1820  to  1883  more 
than  95  per  cent  of  the  total  immigration  from  Europe  originated  in 
the  United  Kingdom,  Germany,  Scandinavia,  the  Netherlands, 
Belgium,  France,  and  Switzerland.  In  what  follows  the  movement 
from  these  countries  will  be  referred  to  as  the  "old  immigration." 
Following  1883  there  was  a  rapid  change  in  the  ethnical  character 
of  European  immigration,  and  in  recent  years  more  than  70  per  cent 
of  the  movement  has  originated  in  southern  and  eastern  Europe. 
The  change  geographically,  however,  has  been  somewhat  greater  than 
the  change  in  the  racial  character  of  the  immigration,  this  being  due 
very  largely  to  the  number  of  Germans  who  have  come  from  Austria- 
Hungary  and  Russia.  The  movement  from  southern  and  eastern 
Europe  will  be  referred  to  as  the  "new  immigration."  In  a  single 
generation  Austria-Hungary,  Italy,  and  Russia  have  succeeded  the 
United  Kingdom  and  Germany  as  the  chief  sources  of  immigration. 
In  fact,  each  of  the  three  countries  first  named  furnished  more  immi- 
grants to  the  United  States  in  1007  than  came  in  the  same  year  from 
the  United  Kingdom,  Germany,  Scandinavia,  France,  the  Netherlands, 
Belgium,  and  Switzerland  combined. 

The  old  immigration  movement  in  recent  years  has  rapidly  de- 
clined, both  numerically  and  relatively,  and  under  present  conditions 
there  are  no  indications  that  it  will  materially  increase.  The  new 

1  Reports  of  the  Immigration  Commission.     (Washington,  1911),  I,  23-6,  37-8, 
42,  60,  139,  45-8. 

2  Including  Turkey  in  Asia. 


784  READINGS  IN  ECONOMIC  HISTORY 

immigration  movement  is  very  large,  and  there  are  few,  if  any,  indi- 
cations of  its  natural  abatement.  .  .  . 

The  old  immigration  movement  was  essentially  one  of  permanent 
settlers.  The  new  immigration  is  very  largely  one  of  individuals 
a  considerable  proportion  of  whom  apparently  have  no  intention  of 
permanently  changing  their  residence,  their  only  purpose  in  coming 
to  America  being  to  temporarily  take  advantage  of  the  greater  wages 
paid  for  industrial  labor  in  this  country.  This,  of  course,  is  not  true 
of  all  the  new  immigrants,  but  the  practice  is  sufficiently  common  to 
warrant  referring  to  it  as  a  characteristic  of  them  as  a  class.  From 
all  data  that  are  available  it  appears  that  nearly  40  per  cent  of  the 
new  immigration  movement  returns  to  Europe  and  that  about  two- 
thirds  of  those  who  go  remain  there.  This  does  not  mean  that  all  of 
these  immigrants  have  acquired  a  competence  and  returned  to  live  on 
it.  Among  the  immigrants  who  return  permanently  are  those  who 
have  failed,  as  well  as  those  who  have  succeeded.  Thousands  of  those 
returning  have,  under  unusual  conditions  of  climate,  work,  and  food, 
contracted  tuberculosis  and  other  diseases;  others  are  injured  in  our 
industries;  still  others  are  the  widows  and  children  of  aliens  dying 
here.  These,  with  the  aged  and  temperamentally  unfit,  make  up  a 
large  part  of  the  aliens  who  return  to  their  former  homes  to  remain. 

The  old  immigration  came  to  the  United  States  during  a  period 
of  general  development  and  was  an  important  factor  in  that  develop- 
ment, while  the  new  immigration  has  come  during  a  period  of  great 
industrial  expansion  and  has  furnished  a  practically  unlimited  supply 
of  labor  to  that  expansion. 

CAUSES    OF    THE    MOVEMENT 

As  a  class  the  new  immigrants  are  largely  unskilled  laborers  com- 
ing from  countries  where  their  highest  wage  is  small  compared  with 
the  lowest  wage  in  the  United  States.  Nearly  75  per  cent  of  them 
are  males.  About  83  per  cent  are  between  the  ages  of  14  and 
45  years,  and  consequently  are  producers  rather  than  dependents. 
They  bring  little  money  into  the  country  and  send  or  take  a  con- 
siderable part  of  their  earnings  out.  More  than  35  per  cent  are 
illiterate,  as  compared  with  less  than  3  per  cent  of  the  old  immigrant 
class.  Immigration  prior  to  1882  was  practically  unregulated,  and 
consequently  many  were  not  self-supporting,  so  that  the  care  of  alien 
paupers  in  several  States  was  a  serious  problem.  The  new  immi- 
gration has  for  the  most  part  been  carefully  regulated  so  far  as 
health  and  likelihood  of  pauperism  are  concerned,  and,  although 


POPULATION   AND   LABOR  785 

drawn  from  classes  low  in  the  economic  scale,  the  new  immigrants 
as  a  rule  are  the  strongest,  the  most  enterprising,  and  the  best  of 
their  class.  .  .  . 

Unlike  Canada,  Argentina,  Brazil,  Australia,  and  other  immi- 
grant-receiving countries,  the  United  States  makes  no  effort  to 
induce  immigration.  A  law  for  the  encouragement  of  immigration 
by  guaranteeing  in  this  country  labor  contracts  made  abroad  was 
enacted  in  1864  but  repealed  in  1868.  Later  legislation  has  tended 
to  prevent  the  introduction  of  contract  laborers  and  assisted  or  in- 
duced immigration,  the  purpose  of  the  Government  being  that  the 
movement  should  be  a  natural  one.  The  law  respecting  assisted 
immigration,  however,  does  not  deny  the  right  of  a  person  already 
in  this  country  to  send  for  an  otherwise  admissible  relative  or  friend, 
and  a  large  part  of  the  present  movement,  especially  from  southern 
and  eastern  Europe,  is  made  possible  through  such  assistance.  The 
immediate  incentive  of  the  great  bulk  of  present-day  immigration 
is  the  letters  of  persons  in  this  country  to  relatives  or  friends 
at  home.  Comparatively  few  immigrants  come  without  some 
reasonably  definite  assurance  that  employment  awaits  them,  and 
it  is  probable  that  as  a  rule  they  know  the  nature  of  that  em- 
ployment and  the  rate  of  wages.  A  large  number  of  immigrants 
are  induced  to  come  by  quasi  labor  agents  in  this  country,  who 
combine  the  business  of  supplying  laborers  to  large  employers  and 
contractors  with  the  so-called  immigrant  banking  business  and  the 
selling  of  steamship  tickets. 

Another  important  agency  in  promoting  emigration  from  Europe 
to  the  United  States  is  the  many  thousands  of  stea«mship-ticket  agents 
and  subagents  operating  in  the  emigrant-furnishing  districts  of  south- 
ern and  eastern  Europe.  Under  the  terms  of  the  United  States 
immigration  law,  as  well  as  the  laws  of  most  European  countries,  the 
promotion  of  emigration  is  forbidden,  but  nevertheless  the  steamship- 
agent  propaganda  flourishes  everywhere.  It  does  not  appear  that  the 
steamship  lines  as  a  rule  openly  direct  the  operations  of  these  agents, 
but  the  existence  of  the  propaganda  is  a  matter  of  common  knowledge 
in  the  emigrant-furnishing  countries  and,  it  is  fair  to  assume,  is  ac- 
quiesced in,  if  not  stimulated,  by  the  steamship  lines  as  well.  With 
the  steamship  lines  the  transportation  of  steerage  passengers  is  purely 
a  commercial  matter;  moreover,  the  steerage  business  which  origi- 
nates in  southern  and  eastern  Europe  is  peculiarly  attractive  to  the 
companies,  as  many  of  the  immigrants  travel  back  and  forth,  thus 
insuring  east-bound  as  well  as  west-bound  traffic.  .  .  . 


786  READINGS  IN  ECONOMIC  HISTORY 

IMMIGRATION    OF    DISEASED   ALIENS 

Prior  to  1882,  when  the  federal  Government  first  assumed  control 
of  immigration,  the  movement  was  practically  unregulated.  No 
process  of  selection  was  exercised  among  the  immigrants  who  came 
between  1819  and  1882,  and  as  a  result  the  diseased,  defective,  delin- 
quent, and  dependent  entered  the  country  practically  at  will.  With 
the  development  of  federal  immigration  laws  the  situation  in  this 
respect  has  entirely  changed,  and  while,  unfortunately,  the  present 
law,  from  the  difficulty  in  securing  proof,  is  largely  ineffectual  in  pre- 
venting the  coming  of  criminals  and  other  moral  delinquents,  it  does 
effectively  debar  paupers  and  the  physically  unsound  and  generally 
the  mentally  unsound.  .  .  . 

IMMIGRANTS   IN   MANUFACTURING  AND  MINING 

A  large  proportion  of  the  southern  and  eastern  European  immi- 
grants of  the  past  twenty-five  years  have  entered  the  manufacturing 
and  mining  industries  of  the  eastern  and  middle  western  States, 
mostly  in  the  capacity  of  unskilled  laborers.  There  is  no  basic  indus- 
try in  which  they  are  not  largely  represented  and  in  many  cases  they 
compose  more  than  50  per  cent  of  the  total  number  of  persons  em- 
ployed in  such  industries.  Coincident  with  the  advent  of  these 
millions  of  unskilled  laborers  there  has  been  an  unprecedented  expan- 
sion of  the  industries  in  which  they  have  been  employed.  Whether 
this  great  immigration  movement  was  caused  by  the  industrial  de- 
velopment or  whether  the  fact  that  a  practically  unlimited  and  avail- 
able supply  of  cheap  labor  existed  in  Europe  was  taken  advantage 
of  for  the  purpose  of  expanding  the  industries,  can  not  well  be  demon- 
strated. Whatever  may  be  the  truth  in  this  regard  it  is  certain  that 
southern  and  eastern  European  immigrants  have  almost  completely 
monopolized  unskilled  labor  activities  in  many  of  the  more  important 
industries.  This  phase  of  the  industrial  situation  was  made  the  most 
important  and  exhaustive  feature  of  the  Commission's  investigation, 
and  the  results  show  that  while  the  competition  of  these  immigrants 
has  had  little,  if  any,  effect  on  the  highly  skilled  trades,  nevertheless, 
through  lack  of  industrial  progress  and  by  reason  of  large  and  constant 
reinforcement  from  abroad,  it  has  kept  conditions  in  the  semiskilled 
and  unskilled  occupations  from  advancing.  .  .  . 

ASSIMILATION    OF    IMMIGRANTS 

It  is  difficult  to  define  and  still  more  difficult  to  correctly  measure 
the  tendency  of  newer  immigrant  races  toward  Americanization, 


POPULATION   AND   LABOR  787 

or  assimilation  into  the  body  of  the  American  people.  If,  however, 
the  tendency  to  acquire  citizenship,  to  learn  the  English  language, 
and  to  abandon  native  customs  and  standards  of  living  may  be  con- 
sidered as  factors,  it  is  found  that  many  of  the  more  recent  immi- 
grants are  backward  in  this  regard,  while  some  others  have  made 
excellent  progress.  The  absence  of  family  life,  which  is  so  con- 
spicuous among  many  southern  and  eastern  Europeans  in  the  United 
States,  is  undoubtedly  the  influence  which  most  effectively  retards 
assimilation.  The  great  majority  of  some  of  these  races  are  repre- 
sented in  the  United  States  by  single  men  or  men  whose  wives  and 
families  are  in  their  native  country.  It  is  a  common  practice  for  men 
of  this  class  in  industrial  communities  to  live  in  boarding  or  rooming 
groups,  and  as  they  are  also  usually  associated  with  each  other  in  their 
work  they  do  not  come  in  contact  with  Americans,  and  consequently 
have  little  or  no  incentive  to  learn  the  English  language,  become 
acquainted  with  American  institutions,  or  adopt  American  standards. 
In  the  case  of  families,  however,  the  process  of  assimilation  is  usually 
much  more  rapid.  The  families  as  a  rule  live  in  much  more  whole- 
some surroundings,  and  are  reached  by  more  of  the  agencies  which 
promote  assimilation.  The  most  potent  influence  in  promoting  the 
assimilation  of  the  family  is  the  children,  who,  through  contact  with 
American  life  in  the  schools,  almost  invariably  act  as  the  unconscious 
agents  in  the  uplift  of  their  parents.  Moreover,  as  the  children 
grow  older  and  become  wage  earners,  they  usually  enter  some  higher 
occupation  than  that  of  their  fathers,  and  in  such  cases  the  Ameri- 
canizing influence  upon  their  parents  continues  until  frequently  the 
whole  family  is  gradually  led  away  from  the  old  surroundings  and  old 
standards  into  those  more  nearly  American.  This  influence  of  the 
children  is  potent  among  immigrants  in  the  great  cities,  as  well  as  in 
the  smaller  industrial  centers.  .  .  . 

COUNTRY   OF    ORIGIN,    1820    TO    IQIO 

With  respect  to  origin  of  the  immigration  to  the  United  States 
a  remarkable  change  has  taken  place.  More  than  70  per  cent 
of  the  present  immigration  is  from  the  south  and  east  of  Europe 
and  only  about  20  per  cent  is  from  the  north  and  west  of  Europe. 
Two  decades  ago  more  than  70  per  cent  was  from  the  north  and 
west  of  Europe  and  less  than  20  per  cent  from  the  south  and  east 
of  Europe.  .  .  . 

For  the  period  from  1820  to  1910,  92.3  per  cent  of  the  immigrants 
for  whom  country  of  origin  was  reported  came  from  Europe,  58  per 


788 


READINGS  IN  ECONOMIC  HISTORY 


cent  being  from  the  north  and  west  of  Europe,  and  34.2  per  cent 
from  the  south  and  east  of  Europe.1  Only  a  very  small  proportion  of 
the  immigrants  came  from  the  south  and  east  of  Europe  until  in  the 
late  eighties.  The  proportion  from  that  section  of  Europe  reached 
25  per  cent  for  the  first  time  in  1887.  A  notable  shifting  of  the  source 
of  immigration  took  place  between  1895  and  1896.  In  1895,  54.7  per 
cent  of  the  immigrants  came  from  the  north  and  west  of  Europe  and 
43.2  per  cent  from  the  south  and  east  of  Europe.  In  1896,  only  40 
per  cent  came  from  the  north  and  west  of  Europe  and  57  per  cent 
came  from  the  south  and  east  of  Europe.  .  .  . 

CONCENTRATION    IN    CITIES 

In  1900  the  10,341,276  foreign-born  residing  in  continental  United 
States  were  distributed  by  class  of  place  of  residence  as  indicated  in 
the  following  table: 

TABLE   14.  —  Per  cent  distribution  of  native-  and  foreign-born  population  of  conti- 
nental United  States,  by  class  of  place  of  residence:  igoo 


Class  of  place  of  residence 

Native- 
born 

Foreign- 
born 

Total.  .  .          

IOO    O 

IOO    O 

Cities  of  2,500  or  over  

T.6    I 

66  3 

100  ooo  or  over  

1C     C 

38  8 

25,000  to  100,000  

6    7 

10  8 

8,000  to  25,000  

6.6 

0.  2 

4,000  to  8,000  

4-4 

4.6 

2,500  to  4,000  

2  .0 

2  .O 

Smaller  cities  and  country  districts.  . 

63  o 

•27      7 

The  preceding  table  shows  clearly  that  the  foreign-born  popula- 
tion of  continental  United  States  is  concentrated  in  cities  to  a  much 
greater  degree  than  the  native  population.  Of  the  total  foreign-b.orn 
population,  66.3  per  cent  reside  in  cities  having  a  population  of  at 
least  2,500,  but  only  36.1  per  cent  of  the  native  population  are  so 
classed.  The  larger  the  cities,  the  greater  the  disparity  between  the 
percentages  of  foreign-born  population  and  of  native  population 
residing  in  such  cities.  .  .  . 

1  Including  Turkey  in  Asia. 


POPULATION    AND    LABOR  789 

As  a  result  of  the  investigation  the  Commission  is  unanimously 
of  the  opinion  that  in  framing  legislation  emphasis  should  be  laid 
upon  the  following  principles: 

1.  While   the   American   people,   as   in   the   past,   welcome   the 
oppressed  of  other  lands,  care  should  be  taken  that  immigration  be 
such  both  in  quality  and  quantity  as  not  to  make  too  difficult  the 
process  of  assimilation. 

2.  Since  the  existing  law  and  further  special  legislation  recom- 
mended in  this  report  deal  with  the  physically  and  morally  unfit, 
further  general  legislation  concerning  the  admission  of  aliens  should 
be  based  primarily  upon  economic  or  business  considerations  touching 
the  prosperity  and  economic  well-being  of  our  people. 

3.  The  measure  of  the  rational,  healthy  development  of  a  country 
is  not  the  extent  of  its  investment  of  capital,  its  output  of  products, 
or  its  exports  and  imports,  unless  there  is  a  corresponding  economic 
opportunity  afforded  to  the  citizen  dependent  upon  employment  for 
his  material,  mental,  and  moral  development. 

4.  The  development  of  business  may  be  brought  about  by  means 
which  lower  the  standard  of  living  of  the  wage  earners.     A  slow 
expansion  of  industry  which  would  permit  the  adaptation  and  assim- 
ilation of  the  incoming  labor  supply  is  preferable  to  a  very  rapid  indus- 
trial expansion  which  results  in  the  immigration  of  laborers  of  low 
standards  and  efficiency,  who  imperil  the  American  standard  of  wages 
and  conditions  of  employment. 

The  Commission  agrees  that  laws  should  be  passed: 

1.  To  protect  the  United  States  more  effectively  against  the  immi- 
gration of  criminal  and  certain  other  debarred  classes.  .  .  . 

2.  Sufficient  appropriation  should  be  regularly  made  to  enforce 
vigorously  the  provisions  of  the  laws  previously  recommended  by  the 
Commission  and  enacted  by  Congress  regarding  the  importation  of 
women  for  immoral  purposes.  .  .  . 

4.  To  strengthen  the  certainty  of  just  and  humane  decisions  of 
doubtful  cases  at  ports  of  entry  it  is  recommended  — ... 

5.  To  protect  the  immigrant  against  exploitation;    to  discourage 
sending   savings   abroad;     to   encourage   permanent   residence   and 
naturalization;   and  to  secure  better  distribution  of  alien  immigrants 
throughout  the  country  — .  .  . 

7.  The  general  policy  adopted  by  Congress  in  1882  of  excluding 
Chinese  laborers  should  be  continued.  .  .  . 

8.  The  investigations  of  the  Commission  show  an  oversupply  of 
unskilled  labor  in  basic  industries  to  an  extent  which  indicates  an 


790  READINGS  IN  ECONOMIC  HISTORY 

oversupply  of  unskilled  labor  in  the  industries  of  the  country  as  a 
whole,  a  condition  which  demands  legislation  restricting  the  further 
admission  of  such  unskilled  labor.  .  .  . 

The  following  methods  of  restricting  immigration  have  been 
suggested: 

(a)  The  exclusion  of  those  unable  to  read  or  write  in  some  language. 

(b)  The  limitation  of  the  number  of  each  race  arriving  each  year 
to  a  certain  percentage  of  the  average  of  that  race  arriving  during 
a  given  period  of  years. 

(c)  The  exclusion  of  unskilled  laborers  unaccompanied  by  wives 
or  families. 

(d)  The  limitation  of  the  number  of  immigrants  arriving  annually 
at  any  port. 

(e)  The  material  increase  in  the  amount  of  money  required  to 
be  in  the  possession  of  the  immigrant  at  the  port  of  arrival. 

(/)   The  material  increase  of  the  head  tax. 

(g)  The  levy  of  the  head  tax  so  as  to  make  a  marked  discrimina- 
tion in  favor  of  men  with  families. 

All  these  methods  would  be  effective  in  one  way  or  another  in 
securing  restrictions  in  a  greater  or  less  degree.  A  majority  of  the 
Commission  favor  the  reading  and  writing  test  as  the  most  feasible 
single  method  of  restricting  undesirable  immigration. 

The  Commission  as  a  whole  recommends  restriction  as  demanded 
by  economic,  moral,  and  social  considerations,  furnishes  in  its  report 
reasons  for  such  restriction,  and  points  out  methods  by  which  Congress 
can  attain  the  desired  result  if  its  judgment  coincides  with  that  of  the 
Commission. 

B.   Immigration  Legislation,  1882-1910  l 

In  addition  to  the  general  legislation  concerning  immigration,  which  is  here 
described,  the  immigration  of  Chinese  labor  into  this  country  has  been  prohibited. 
An  attempt  has  been  made  three  times  —  the  last  in  1914  —  to  impose  an  educa- 
tional restriction  upon  immigration,  but  it  has  failed  each  time  to  become  law. 

.  .  .  On  August  3,  1882,  the  first  general  immigration  law  was 
approved.2  This  law  provided  that  a  head  tax  of  50  cents  should 
be  levied  on  all  aliens  landed  at  United  States  ports,  the  money  thus 
collected  to  be  used  to  defray  the  expenses  of  regulating  immigration 
and  for  the  care  of  immigrants  after  landing.  .  .  .  The  law  provided 
that  foreign  convicts  (except  those  convicted  of  political  offenses), 

1  Reports  of  the  Immigration  Commissior.     (Washington,  1911),  II,  569-77. 

2  18  Stat.,  pt.  5,  p.  477. 


POPULATION    AND    LABOR 


791 


lunatics,  idiots,  and  persons  likely  to  become  public  charges,  should 
not  be  permitted  to  land. 

On  February  26,  1885,  the  first  law  forbidding  the  importation  of 
contract  labor  was  approved.1  This  law  was  defective,  in  that  no 
inspection  was  provided  for,  nor  was  any  arrangement  made  for  the 
general  execution  of  the  provisions  of  the  law  or  for  the  deportation 
of  the  contract  laborer  himself.  This  law  was  amended  by  the  'act 
of  February  23,  1887.  .  .  . 

The  immigration  law  of  1891  provided  for  a  head  tax  of  50  cents, 
as  was  also  provided  in  the  law  of  1882,  the  head  tax  being  considered 
merely  as  a  means  of  raising  money  for  the  proper  administration 
of  the  law.  Persons  suffering  from  a  loathsome  or  a  dangerous 
contagious  disease,  and  polygamists,  were  added  to  the  classes  ex- 
cluded by  the  act  of  1882,  and  it  was  also  provided  that  "assisted 
persons,  unless  affirmatively  shown  that  they  did  not  belong  to  any 
excluded  class,"  should  be  debarred.  The  contract-labor  law  was 
strengthened  by  prohibiting  the  encouragement  of  immigration  by 
promises  of  employment  through  advertisements  published  in  any 
foreign  country,  and  transportation  companies  were  forbidden  to 
solicit  or  encourage  immigration.  .  .  .  Another  provision  not  found 
in  the  law  of  1882  was  that  which  allowed  the  return  within  a  year 
after  arrival  of  any  alien  who  had  come  into  the  United  States  in 
violation  of  law,  such  return  being  at  the  expense  of  the  transporta- 
tion company  or  person  bringing  such  alien  into  the  country.  .  .  . 

With  the  exception  of  an  amendment  to  an  appropriation  act  in 
1894  raising  the  head  tax  on  immigrants  from  50  cents  to  $i,2  no 
immigration  legislation  was  enacted  until  1903.  The  agitation  of 
the  subject  in  Congress  continued,  however,  and  the  period  is  inter- 
esting chiefly  because  of  the  adoption  by  both  houses  of  Congress 
of  a  bill  providing  for  an  educational  test  for  immigrants  and  the 
veto  of  the  bill  by  President  Cleveland. 

As  the  bill  went  to  the  President  it  provided  that  persons  physi- 
cally capable  and  over  16  years  of  age  who  could  not  read  and 
write  the  English  language  or  some  other  language,  parents,  grand- 
parents, wives,  and  minor  children  of  admissible  immigrants  being 
excepted,  were  added  to  the  excluded  classes. 

President  Cleveland  returned  the  bill  with  his  veto  on  March 
2,  1897.  He  objected  to  the  radical  departure  from  the  previous 


1  23  Stat.,  p.  332. 

1  This  was  raised  to  $4  by  the  act  of  February  20,  1907.  —  Ed. 


792  READINGS  IN  ECONOMIC  HISTORY 

national  policy  relating  to  immigration,  which  welcomed  all  who 
came,  the  success  of  which  policy  was  attested  by  the  last  century's 
great  growth.  .  .  . 

By  the  act  of  March  26,  1910,  sections  2  and  3  of  the  immigration 
law  of  February  20,  1907,  were  amended  to  more  effectively  prevent 
the  importation  of  women  and  girls  for  immoral  purposes.  .  .  . 

III.  LABOR  CONDITIONS 

A.  General  Conditions  of  Labor,  igoo  l 

In  the  reports  of  the  Industrial  Commission  there  are  brought  together  the 
diverse  and  often  conflicting  views  of  employers,  laborers,  and  students  of  the 
labor  problem.  In  the  following  brief  digest  of  some  of  the  testimony  taken  by 
the  Commission  there  is  thus  presented  a  symposium  on  the  subject.  Almost 
half  of  the  nineteen  volumes  of  their  reports  are  devoted  to  the  question  of 
labor. 

All  the  witnesses  who  spoke  of  the  general  condition  of  the  working 
class  as  compared  with  what  it  was  20  or  30  or  50  years  ago, 
agreed  that  it  has  improved.  Money  wages  have  increased,  and  the 
cost  of  particular  commodities  has,  in  general,  diminished.  The 
standard  of  life  has  accordingly  risen.  One  witness  notes,  however, 
that  the  acquirement  of  some  things  which  were  luxuries  in  former 
years  has  been  accompanied  with  the  loss,  in  city  communities,  of 
wholesome  things,  such  as  chickens  and  good  meat,  pure  milk  and 
butter,  which  every  workingman  was  able  to  have  in  the  smaller 
communities  of  earlier  times. 2 

Whether  the  conditions  of  the  working  people  had  improved 
within  a  shorter  period,  such  as  ten  years,  is  not  a  matter  of  such 
general  agreement.  One  witness,  testifying  in  the  spring  of  1900, 
thought  that  though  wages  in  the  strongly  organized  trades  were 
fully  as  high  as  they  were  ten  years  earlier,  wages  in  the  trades  which 
were  not  firmly  organized  when  the  hard  times  came  on  were  probably 
10  per  cent  lower  than  before  the  panic  of  1893.  He  thought  that 
this  was  true  in  spite  of  some  increase  of  wages,  amounting  to  perhaps 
8  per  cent  in  his  own  city  of  Indianapolis,  within  the  two  years 
preceding  his  testimony.  Mr.  Wright,  United  States  Commissioner 
of  Labor,  testifying  at  the  end  of  1898,  declared  that  wages  had 


1  Reports  of  the  Industrial  Commission.     (Washington,  1900),  XIV,  xliii-lxxv, 
passim. 

2  Vol.  VII:  McNeill,  117;   De  Graffenried,  221,  222;   Gompers,  615,  645,  654; 
Young,  696-698;   Kennedy,  751,  752. 


POPULATION    AND   LABOR  793 

constantly  decreased  since  1893,  though  within  two  or  three  years 
there  had  been  a  slight  reaction  in  factory  employments.1 

One  or  two  witnesses,  comparing  the  condition  of  working  people 
in  the  United  States  and  in  European  countries,  think  that  the  differ- 
ence is  less  than  it  is  popularly  thought  to  be.  One  even  holds  that, 
in  view  of  the  comparative  advantages  of  the  two  countries,  the 
advancement  in  skill  and  enterprise,  and  the  standards  from  which 
each  started,  the  working  classes  of  England  are  to  be  considered 
fully  as  well  off  as  those  of  the  United  States.  In  confirmation  of 
this  he  says  that  there  is  but  little  immigration  from  England  to  the 
United  States,  and  that  many  who  have  come  have  returned.  Mr. 
Willoughby,  of  the  United  States  Department  of  Labor,  while  con- 
sidering that  the  conditions  of  labor  are  undoubtedly  better  here, 
upon  the  whole,  than  in  any  European  country,  thinks  that  the  coal 
miners  are  better  off  in  Europe  than  in  the  United  States,  and  that 
the  British  workmen  in  the  steel  trade,  while  not  getting  as  high  wages 
as  ours,  have  more  constant  work  and  are  better  taken  care  of  through 
various  relief  organizations.  European  workmen  in  general  have 
more  certain  conditions  of  life.  The  German  workman  has  the 
consciousness  of  protection  against  the  pecuniary  results  of  accident, 
sickness,  old  age,  and  death,  through  insurance  provided  by  the 
state.2 

The  differences  which  exist  between  European  countries  and 
America,  in  the  condition  of  the  working  class,  are  attributed  to 
various  causes.  The  chief  are  the  great  domain  of  rich  soil  which  we 
have  had  at  our  disposal ;  the  climatic  conditions,  which  require  better 
food  and  clothing  and  housing,  and  have  helped  to  lead  the  workman 
to  demand  wages  which  will  buy  these  things;  the  greater  activity 
and  productivity,  which  are  believed  to  result  both  from  the  climatic 
conditions  directly  and  from  the  more  adequate  nourishment;  and 
the  fact  that  the  working  people  of  Europe  have  emerged  from  a 
condition  of  serfdom  to  which  the  workers  of  America,  except  the 
negroes,  were  never  subjected.  The  negroes  of  the  South,  it  is 
declared,  are  in  a  position  more  like  that  of  European  workmen.3 

Several  manufacturers  refer  to  the  superior  energy  and  productive 
power  of  the  American  workman.  To  this  the  possibility  of  cheap 


1  Vol.  VII:  Kennedy,  73-5,  754,  755;  Wright,  15. 

2  Vol    VII:    Gompers,  646,  647;    Schonfarber,  448,  449.     Vol.  XIV:    WU- 
loughby,  179,  180. 

3  Vol.  VII:  Gompers,  646,  647. 


794  READINGS  IN  ECONOMIC  HISTORY 

production  in  the  United  States  is  attributed.  It  is  declared  that 
foreign  workmen  become  more  efficient,  in  a  marked  degree,  after 
they  have  been  a  short  time  in  this  country.  One  manufacturer  of 
worsted  and  woolen  goods,  however,  thinks  that  the  English  working 
people  in  his  line  do  better  work  than  the  American.  This,  he  thinks, 
is  because  the  English  masters  are  able,  on  account  of  the  surplus 
of  good  labor,  to  be  more  exacting  and  to  require  more  careful 
work.1  .  .  . 

Hours  of  labor. —  A  universal  desire  is  expressed,  on  the  part  of 
witnesses  representing  labor  interests,  for  a  lessening  of  the  hours 
of  work.  Eight  hours  is  named  by  the  majority  of  witnesses  as  the 
limit  which  ought  not  to  be  exceeded.  Several,  including  the  presi- 
dent of  the  Cigar  Makers'  International  Union,  the  secretary  of  the 
Boot  and  Shoe  Workers'  Union,  and  a  representative  of  the  Brick- 
layers' Union,  think  that  six  hours  a  day,  at  least  in  their  own  trades, 
would  be  enough.  Mr.  Gompers,  president  of  the  Federation  of 
Labor,  refers  particularly  to  farm  labor,  and  believes  that  it,  as  well 
as  labor  in  other  fields,  might  be  and  ought  to  be  brought  within  an 
8-hour  limit.  He  points  out  that  employers  in  several  lines,  who 
have  said  that  the  day  of  8  hours,  or  even  9  or  10  hours,  was 
impracticable  in  their  particular  occupations,  have  found  that  it 
could  be  made  practicable  when  organized  labor  forced  it  upon 
them.2 

Two  great  lines  of  argument  are  advanced  in  support  of  the  desire 
for  the  shorter  workday.  One  is  the  effect  upon  the  physical,  mental, 
and  moral  well-being  of  the  workman.  It  is  declared  that  greater 
leisure  results  in  a  lessening  of  dissipation  and  in  moral  and  intel- 
lectual elevation,  as  well  as  in  physical  betterment.  The  second  line 
of  argument  relates  to  industrial  conditions.  It  is  stated  that  the 
product  per  hour  is  increased  as  the  day's  work  is  shortened,  and 
Mr.  Gompers  and  Mr.  Strasser,  formerly  president  of  the  Cigar 
Makers'  International  Union,  are  confident  that  there  is  no  diminu- 
tion of  the  product  per  day.  Several  witnesses  mention  specific  in- 
stances in  which  hours  have  been  abridged  without  lessening  output. 
Mr.  Gompers  and  Mr.  Strasser  are  apparently  not  of  opinion,  however, 
that  the  same  man  with  the  same  appliances  will  generally  produce 
as  much  in  8  hours  as  in  9  or  10.  Their  proposition  is  that  increased 

1  Vol.  XIV:  Steel.  237;  Harrah,  354,  355;  Weidmann,  704. 

2  Vol.  VII:   Spohn,  145;   Perkins,  174,  179;   Eaton,  366,  372;   Gompers,  649, 
650. 


POPULATION    AND    LABOR  795 

leisure  causes  increased  opportunity  for  thought  and  improve- 
ment, and  that  thought  and  improvement  give  rise,  on  the  one 
hand,  to  new  tools  and  inventions,  and,  on  the  other  hand,  to  new 
desires,  which  give  opportunities  for  the  use  of  the  new  machines. 
Mr.  Gompers  also  holds  that  under  existing  conditions  the  lessening 
of  hours  is  necessary  to  prevent  the  throwing  of  large  numbers  of 
men  out  of  work  by  improvements  in  machinery  and  processes.  He 
is  confident,  however,  that  there  is  not,  upon  the  whole,  any  real 
advantage  to  the  employers  in  long  hours.  The  Southern  textile 
factories  have  advantages  in  the  nearness  of  raw  material  and  the 
cheapness  of  labor,  but  their  long  day  is  not  in  itself  an  advantage.1 
Many  workingmen  hold  that  the  lessening  of  hours  is  likely  to 
raise  wages  rather  than  to  lower  them.  .  .  . 

LABOR   ORGANIZATIONS 

Membership  and  growth.  —  The  testimony  shows  clearly  that  indus- 
trial prosperity  is  favorable  to  the  growth  of  labor  organizations. 
From  1892  to  1897  the  membership  of  those  in  New  York  State  de- 
creased 100,000.  From  March  31,  1897,  to  June  30,  1900,  a  compara- 
tively prosperous  time,  there  was  an  increase  of  more  than  a  hundred 
thousand.  The  growth  is  said  to  have  been  chiefly  outside  the  city 
of  New  York.  The  city  has  been  for  some  time  pretty  thoroughly 
organized.  The  commissioner  of  labor  statistics  of  New  York,  testi- 
fying in  September,  1900,  thought  that  the  organizations  included 
75  per  cent  of  the  workers  at  mechanical  trades  in  the  State, 
and  perhaps  one-eighth  of  all  wage  earners.  Of  Indiana  it  was 
stated  in  May,  1900,  that  the  unions  were  stronger  than  five  years 
earlier,  but  not  quite  as  strong  as  ten  years  earlier.  The  old  unions 
maintained  their  wages  and  hours  and  their  organization  through 
the  hard  times;  but  the  new  organizations  lost  members,  and  many 
disappeared.2 

Attitude  of  employers. —  Several  witnesses  agree  in  stating  that  the 
attitude  of  employers  toward  the  unions  is,  on  the  whole,  growing 
more  favorable.  Mr.  Wright,  United  States  Commissioner  of  Labor, 
says  that  employers  are  glad  to  have  the  cooperation  of  unions  if  they 
are  directed  by  men  of  business  experience  and  integrity,  as  the 
typographical  union  and  the  glass  blowers'  unions  are. 


1  Vol.  VII:  Bullock,  521,522;  Strasser,  267;  Gompers,  6 2 7, 650-65 2;  Kennedy, 
645. 

2  Vol.  VII:  McMackin,  79Q-8oI>  8°7;   Kennedy,  739. 


796  READINGS  IN  ECONOMIC  HISTORY 

Yet  it  is  pointed  out  that  the  favorable  change  of  attitude  does 
not  appear  everywhere.1 

Mr.  Brooks  declares  that  the  growth  of  socialism  in  such  New 
England  towns  as  Brockton  and  Haverhill  results  from  the  feeling 
of  the  workingmen  that  their  trade  organizations  can  effect  nothing. 
If  manufacturers  want  to  make  socialists  in  this  country  they  have 
only  to  "smash  the  unions."  2  .  .  . 

Necessity  of  strikes. —  There  is  little  dissent  from  the  opinion  that 
strikes  are  a  necessary  weapon  of  the  workingman  under  existing 
social  conditions.  Mr.  Gompers,  president  of  the  American  Federa- 
tion of  Labor,  does  not  believe  that  strikes  can  be  entirely  eliminated 
from  our  system  of  society,  though  he  seems  to  hope  that  by  a  thor- 
ough organization  of  both  the  workers  and  the  employers  it  will  be 
possible,  in  a  great  measure,  to  secure  their  beneficent  results  with- 
out interrupting  industry  and  commerce.  He  says,  however,  that 
every  labor  organization  ought  to  accumulate  a  defense  fund.  Em- 
ployers who  know  that  their  men  have  a  defense  fund  which  will 
enable  them  to  resist  will  not  lightly  try  to  reduce  wages,  increase  the 
hours  of  labor,  or  enforce  obnoxious  conditions.  Labor  organizations 
which  have  small  funds  or  none  are  obliged  to  yield  to  deductions  of 
wages  when  industrial  depression  comes,  and  when  business  revives 
they  are  the  last  to  receive  any  of  the  benefits.  He  holds  adequate 
preparation  for  strikes  to  be  the  best  means  of  preventing  them.  No 
matter  how  just  a  cause  is,  unless  it  is  backed  up  with  power  it  will 
be  crushed.  Disputes  are  determined  by  contest  and  conquest, 
except  when  there  is  like  power  on  both  sides;  then  they  are  deter- 
mined by  reason.  The  same  view  is  expressed  by  Bishop  Potter.  He 
says  that  the  employers  are  likely  to  contend  against  increase  of  wages 
or  shortening  of  work  days  until  they  realize  that  the  employees  have 
force  enough  to  meet  them  in  a  contest.  Bishop  Potter  regards  the 
strike  as  a  reversion  to  barbarism,  but  considers  that  it  is  necessary 
under  present  conditions,  just  as  war  is  necessary.3  .  .  . 

Compulsory  arbitration. —  A  considerable  number  of  witnesses 
favor  a  general  application  of  compulsory  arbitration  in  labor  dif- 
ferences. It  is  strongly  advocated  by  two  who  are  strenuously 
opposed  to  trade  unions,  and  who  seem  to  view  it  as  a  means  of 


1  Vol.  VII:  Wright,  16.     Vol.  XIV:  McCormack,  59,  60;  Fox,  149;  O'Brien, 

- 

*  Vol.  XIV:  Brooks,  140-142. 

3  Vol.  VII:  Gompers,  598,  599,  607,  609.     Vol.  XIV:  Potter,  n. 


POPULATION   AND    LABOR  797 

repressing  their  activity.  One  of  them  says,  in  terms,  that  he  would 
not  have  labor  organizations  recognized  as  such  by  law  or  by  the 
arbitration  board.  Some  representatives  of  the  unions,  however, 
are  also  hi  favor  of  compulsory  arbitration,  and  seem  to  view  it  as  a 
means  of  securing  the  public  investigation  of  the  actions  of 
employers.1  .  .  . 

A  very  large  number  of  witnesses,  however,  are  absolutely  opposed 
to  compulsory  arbitration  under  any  circumstances.  It  is  argued 
that  to  compel  men  to  work  on  terms  which  they  are  not  willing  to 
accept  is  slavery,  and  that  to  compel  employers  to  run  their  works 
and  pay  wages  they  are  not  willing  to  pay  is  confiscation.  Several 
representatives  of  the  workmen  add  that  the  action  of  any  govern- 
mental body,  such  as  a  court  of  arbitration,  would  probably  be  hostile 
to  the  men,  as  the  action  of  the  courts  usually  is.2  .  .  . 
f  Arbitration  and  conciliation  by  State  boards.  —  A  considerable  num- 
ber of  States  have  provided  by  statute  for  State  boards,  whose  duty 
is  the  settlement  of  labor  disputes.  These  boards  have  not  been 
active,  however,  except  in  some  half  dozen  States.  Those  of  New 
York  and  Massachusetts  have  been  especially  prominent,  though 
the  boards  of  New  Jersey,  Ohio,  Indiana,  and  Illinois  have  also  done 
active  work. 

Very  little  seems  to  have  been  accomplished  in  the  way  of  actual 
arbitration.  Neither  the  employers  nor  the  workingmen  seem  to  be 
generally  desirous  of  arbitration  by  the  State  boards.  .  .  . 

Trade  negotiations  and  agreements.—  There  is  an  almost  universal 
agreement  that  direct  negotiations  between  the  parties  are  the  best 
means  of  settling  differences  when  such  negotiations  can  be  brought 
about.  If  an  agreement  can  not  be  reached  in  this  way,  the  next 
best  thing  is  generally  considered  to  be  a  board  of  arbitration,  chosen 
by  the  parties  themselves  from  among  employers  and  employees  in 
the  same  industry,  but  unconnected  with  the  existing  dispute.  This 
plan  offers  the  great  advantage  of  providing  judges  familiar  with 
the  technical  matters  to  be  brought  before  them,  as  well  as  judges 
personally  satisfactory  to  the  disputants.  If  such  a  board  can  not 
reach  an  agreement,  an  outside  umpire  may  be  called  in,  and  if  the 
appointment  of  such  a  board  is  not  found  practicable  the  whole  de- 
cision may  sometimes  be  committed  with  advantage  to  persons  un- 

1  Vol.  VII:   Sherman,  378-380;    Thompson,  757-763,  772-774!   Coffin,  778, 
784,  788,  791;   Kelley,  973,  974-     Vol.  XIV:  Brooks,  142. 

2  Vol.  VII:  Wright,  n,  12;  Strasser,  262;  Schaffer,  388,  389;  Gompers,  612, 
613;  Waleott,  910,  911. 


798  READINGS  IN  ECONOMIC  HISTORY 

connected  with  the  trade.  Bishop  Potter  speaks  of  the  board  of 
mediation  and  conciliation  of  New  York  City,  a  voluntary  organiza- 
tion established  by  him  and  several  other  persons  interested  in  the 
betterment  of  social  conditions.  This  board  is  declared  to  have 
won  the  confidence  of  the  working  men  and  to  have  been  of  material 
assistance  in  the  settlement  of  several  trade  disputes.1 

In  several  trades,  as  the  steel  industry  and  stove  founding,  wages, 
hours,  and  other  conditions  of  employment  are  fixed  by  agreement, 
either  annually  or  at  other  intervals,  between  associations  of  the 
employers  and  of  the  employees.  The  witnesses  who  have  partici- 
pated in  such  agreements,  as  well  as  others  who  refer  to  them,  regard 
this  plan  as  most  beneficial  wherever  it  can  be  brought  about.  .  .  . 

B.   National  Labor  Organizations,  IQOI  2 

The  two  most  successful  and  important  attempts  to  unite  all  workers  in  a 
single  labor  organization  are  here  described. 

As  an  association  of  wage-earners,  the  trade  union  began  to  be 
possible  only  when  a  distinct  wage-earning  class  arose.  So  long  as 
hand  workers  were  in  large  part  men  who  wrought  their  own  materials 
or  the  materials  of  their  customers  with  their  own  tools,  no  wage- 
earning  class,  such  as  we  know,  existed.  .  .  . 

Two  important  attempts  have  been  made  in  the  United  States 
to  go  beyond  the  national  organization  of  a  trade  or  an  industry, 
and  to  bring  all  the  wage-earners  of  the  country  under  a  single  juris- 
diction. The  first  was  that  of  the  Knights  of  Labor.  This  organiza- 
tion was  formed  in  1869.  It  maintained  a  relatively  quiet  existence, 
growing  steadily  but  moderately,  until  about  1885.  At  that  time 
events  brought  it  very  prominently  before  the  public  eye,  and  its 
membership  rose  in  a  year's  time  from  about  one  hundred  thousand 
to  six  or  seven  hundred  thousand.  It  was  disastrously  defeated  in 
some  contests  with  employers,  and  sank  into  comparative  obscurity 
almost  as  rapidly  as  it  had  risen. 

The  fundamental  idea  of  the  Knights  of  Labor  is  the  unity  of 
all  workers.  Its  characteristic  motto  is,  "An  injury  to  one  is  the 
concern  of  all."  It  regards  this  unity  of  interest  as  necessitating 
unity  of  policy  and  of  control;  it  conceives  that  unity  of  control  can 

1  Vol.  VII:   Garland,  87,  97;   McNeill,  117;   Bishop,  478;   Gilbert,  875.     Vol. 
XIV:  Potter,  i,  2;  Leake,  279,  287. 

2  Final   Report   of  the  Industrial   Commission.     (Washington,    1902),   XIX 
'/93>  798-9,  806. 


POPULATION    AND    LABOR  799 

be  effected  only  by  concentrating  all  responsibility  and  power  in  the 
hands  of  the  men  who  may  be  chosen  to  stand  at  the  head  of  affairs. 
The  control  of  the  organization  rests  wholly  in  the  general  assembly, 
and  except  when  the  general  assembly  is  in  session  the  orders  of  the 
executive  officers,  elected  by  the  general  assembly,  are  required  to 
be  obeyed  by  all  members.  While  the  several  trades  are  separately 
organized  within  the  order,  so  far  as  this  is  practicable,  every  such 
separate  trade  organization  is  subject  to  the  control  of  the  general 
officers.  .  .  . 

The  second  great  effort  to  unite  the  wage-earners  in  a  single  organ- 
ization is  that  of  the  American  Federation  of  Labor.  The  Federation 
differs  from  the  Knights  in  that  it  tries  to  make  itself  distinctly  an 
organization  of  wage-earners,  while  the  Knights  desired  to  include 
all  productive  workers,  whether  or  not  they  received  their  compensa- 
tion in  the  form  of  wages.  More  important,  perhaps,  it  differs  also 
in  its  form  of  organization,  and  in  the  ideas  of  policy  which  lie  at  the 
basis  of  the  form  of  organization.  The  Knights  of  Labor  may  be 
compared  to  the  "republic,  one  and  indivisible,"  which  was  the  ideal 
of  the  revolutionary  statesmen  of  France.  The  Federation  is  based 
on  that  principle  of  alliance,  and  union  for  certain  purposes,  of  inde- 
pendent minor  republics,  upon  which  the  union  of  the  American  States 
proceeded.  Each  trade  is  independently  organized,  not,  it  is  con- 
ceived, by  virtue  of  any  authority  emanating  from  the  head  of  the 
whole,  but  by  its  own  independent  power.  Each  trade  organization 
retains  its  sovereign  control  of  its  internal  affairs,  and  only  joins  with 
the  others  in  a  federal  organization  for  the  consideration  of  common 
interests  and  the  promotion  of  the  common  good.  The  American 
Federation  of  Labor  now  includes  an  overwhelming  majority  of  the 
organized  workers  of  America.  The  strongest  of  the  railroad  brother- 
hoods —  the  engineers,  the  firemen,  the  conductors,  and  the  trainmen 
—  remain  outside  of  it,  and  so  do  a  few  other  important  organ- 
izations. With  the  exception,  however,  of  the  four  great  railroad 
brotherhoods  referred  to,  it  is  not  improbable  that  the  majority  of 
the  members  of  labor  organizations  outside  the  Federation  are  in 
the  local  unions  which  have  no  direct  affiliation  with  any  other  body, 
excepting,  perhaps,  the  central  labor  unions  or  trades  assemblies  of 
their  cities.  .  .  . 

The  union  has  two  general  methods  of  bettering  the  economic 
condition  of  its  members.  It  may  try  to  strengthen  the  strategic 
position  of  the  individual  workman  in  dealing  with  the  employer,  or 
it  may  take  the  function  of  bargaining  altogether  out  of  the  hands 


8oo  READINGS  IN  ECONOMIC  HISTORY 

of  the  individual.  The  former  policy  involves  an  attempt  to  dimin- 
ish the  number  of  competitors  in  the  trade.  The  latter  has  no  neces- 
sary reference  to  the  number  of  individual  workers,  but  involves  the 
placing  of  the  interests  of  all  the  workers  under  a  single  control,  so 
that  the  whole  amount  of  labor  power  available  in  the  trade  may  be 
handled  in  the  market  as  a  unit.  .  .  . 

C.   Membership  of  Trade  Unions  in  the  United  States,  igoi 1 

As  no  official  statistics  of  the  membership  of  trade  unions  are  gathered,  all 
statements  of  their  numbers  are  at  best  estimates,  but  the  one  given  here  is  a  very 
careful  one.  In  general  about  ten  per  cent  of  the  men  at  work  along  industrial 
lines  belong  to  trade  unions. 

The  following  table  gives  a  rough  estimate  of  the  aggregate  mem- 
bership of  the  labor  organizations  of  the  United  States  on  July  i, 
1901: 

Estimated  membership  of  labor  organizations  in  the  United  States  on  July  i,  IQOI 

Unions  affiliated  with  the  American  Federation  of  Labor.  .  .  .  950,000 

Custom-clothing  makers 3,800 

Lithographers 2,100 

Bricklayers 39,oco 

Plasterers 7,000 

Stonecutters 10,000 

Box  makers 5.5°° 

Piano  workers 7, 700 

Engineers,  marine 6,000 

Engineers,  locomotive 37,ooo 

Firemen,  locomotive 39,ooo 

Conductors,  railway 25,800 

Trainmen,  railroad 46,000 

Switchmen 15,000 

Letter  carriers 15,000 

Knights  of  labor  and  enumerated  organizations,  say 191,100 


Total 1,400,000 

D.   Membership  of  American  Federation  of  Labor,  iSy1/ '-1913 2 

Most  of  the  labor  organizations  in  the  United  States  are  united  in  a  federal 
body  known  as  the  American  Federation  of  Labor,  so  that  the  growth  in  member- 
ship of  this  organization  reflects  fairly  accurately  the  growth  of  trade  unionism 
in  the  country.  As  some  very  strong  unions  are  not  affiliated  with  this  body,  the 
total  membership  of  all  trade  unions  is  somewhat  greater  than  these  figures  indicate. 


1  Reports  of  the  Industrial  Commission.     (Washington,  1901),  XVII,  xix. 

2  Report  of  Proceedings  of  the  Thirty-third  Annual  Convention  of  the  American 
Federation  of  Labor.     (Washington,  1913),  41,  111-2. 


POPULATION   AND    LABOR 


801 


The  average  paid-up  and  reported  membership  for  the  year  is 
1,996,004,  an  increase  of  225,859  members  over  last  year.  .  .  . 

The  following  is  the  average  membership  reported  or  paid  upon 
for  the  past  sixteen  years: 

Membership 

264.825 

278,016 


Year 

1897 

1898 

1899 .    349,422 

1900 .    548,321 

1901 787,537 

1902 1,024,399 

1903 1,465,800 

1904 1,676,200 


1905. 
1906. 
1907. 
1908. 
1909. 
1910. 
1911. 
1912. 


Membership 
,494,300 
,454,200 
,538,970 


,482,872 
,562,112 
,761,835 

,770,145 
,996,004 

.  .  .  This  report  like  all  the  other  annual  reports  of  the  officers 
and  representatives  of  the  American  Federation  of  Labor  brings  out 
forcibly  the  continuity  of  the  organized  trade  union  movement.  It 
is  not  a  series  of  spasmodic,  unrelated  efforts  to  improve  the  condi- 
tion of  the  workers,  but  it  is  a  consistent,  logically  developed  plan 
based  upon  certain  unchanging,  fundamental  principles.  Each  con- 
vention is  constantly  referring  back  to  the  work  of  previous  conven- 
tions; during  the  year,  the  Executive  Council  takes  up  the  work, 
follows  out  the  directions  of  the  conventions,  and  works  out  new 
problems  upon  lines  in  harmony  with  the  declarations  of  purposes 
and  principles  enunciated  by  previous  conventions.  .  .  . 

The  trade  union  movement  of  America  is  founded  upon  funda- 
mental principles  of  human  freedom  and  liberty.  Whatever  new 
problems  have  arisen,  whatever  complications  of  old  problems  or  of 
new  and  old  problems,  they  have  always  been  solved  by  some  method 
that  harmonized  with  the  purposes  of  the  movement  —  the  effort 
to  insure  to  each  individual  the  right  to  self-development,  inde- 
pendence and  freedom.  Like  some  masterpiece  of  music  is  this 
movement  of  the  toilers,  though  there  is  difference  and  variety,  though 
there  is  changing  mood  and  feeling  to  interpret  the  developing  theme, 
yet  through  it,  all  pervading,  is  an  exquisite  tone  of  harmony  that 
gives  the  sense  of  unity  and  purposefulness.  .  .  . 

E.   Labor  Legislation,  1903  l 

The  main  lines  of  labor  legislation  of  a  protective  character  are  here  described 
as  they  existed  at  the  end  of  1903.  A  considerable  advance  has  been  made  since 
then,  especially  in  more  constructive  social  legislation. 

1  Labor  Legls'ation  in  the  United  States.  By  G.  A.  Weber.  Bulletin  of  the 
Bureau  of  Labor,  No.  54,  September,  1904  (Washington,  1904),  1421-1444,  passim. 


802  READINGS  IN  ECONOMIC  HISTORY 

In  considering  the  labor  legislation  enacted  in  the  various  States 
it  must  be  remembered  that  in  States  in  which  manufacturing  and 
mining  industries  prevail,  such  as  New  York,  Pennsylvania,  Massa- 
chusetts, Illinois,  Ohio,  Connecticut,  etc.,  there  is  more  occasion  for 
the  enactment  of  such  legislation  than  in  States  where  industries  are 
mostly  agricultural,  as  in  the  South  and  West.  .  .  . 

Laws  for  the  regulation  of  labor  in  factories,  workshops,  mer- 
cantile establishments,  sweat  shops,  bakeries,  laundries,  and  on 
building-construction  work  have  been  enacted  in  the  various  States 
for  the  purpose  of  protecting  the  health  and  safety  of  employees 
(see  chart).  For  the  proper  enforcement  of  these  regulations  many 
of  the  States  have  made  provision  for  inspection  services. 

In  27  States  the  laws  provide  for  the  appointment  of  inspectors 
of  factories  and  workshops,  whose  duties  consist  of  visiting  and  in- 
specting factories,  workshops,  mills,  and,  in  some  cases,  mercantile 
establishments,  sweat  shops,  bakeries,  laundries,  and  building-con- 
struction work,  and  enforcing  the  laws  concerning  the  same.  .  .  . 

What  are  usually  known  as  factory  acts  relate  to  (i)  the  pro- 
tection of  the  health  of  employees,  such  as  regulations  requiring  the 
proper  ventilation,  lighting,  and  heating  of  factories  and  workshops, 
the  provision  of  exhaust  fans  to  prevent  dust  or  other  deleterious 
products  from  being  inhaled  by  the  operatives,  the  lime  washing  or 
painting  of  walls,  the  provision  of  seats  and  separate  toilet  facilities 
for  females,  and  the  prohibition  of  overcrowding ;  (2)  the  prevention 
of  accidents,  such  as  regulations  prohibiting  the  employment  of  women 
and  children  to  clean  machinery  in  motion  or  operate  dangerous 
machinery  or  of  children  to  run  elevators,  requiring  that  machinery 
and  vats  combining  molten  metal  or  hot  liquids  be  properly  guarded, 
that  mechanical  belt  and  gearing  shifters,  means  of  communication 
between  the  engineer's  room  and  rooms  where  machinery  is  used,  and 
safety  appliances  on  elevators  be  provided,  that  hoistway  openings 
be  properly  railed  off,  that  sides  or  railings  be  placed  on  stairways, 
that  special  precautions  be  taken  in  cases  of  dangerous  or  injurious 
occupations,  or  where  explosive  or  highly  inflammable  compounds 
ire  handled,  that  fire  escapes  be  provided,  and  that  doors  in  factories 
and  workshops  be  so  hung  as  to  open  outward,  and  that  they  be 
kept  unlocked;  and  (3)  the  conditions  of  employment  of  women  and 
children,  such  as  regulations  restricting  the  hours  of  labor, 
prohibiting  night  work,  and  requiring  intervals  of  rest  during  the 
working  day.  .  .  . 

Mine-labor  legislation  is  necessarily  confined  to  States  and  Terri- 


POPULATION    AND    LABOR  803 

tories  which  produce  coal  or  other  minerals  in  sufficient  quantities 
to  justify  the  enactment  of  special  laws  for  the  protection  and 
safety  of  persons  employed  in  the  mines.  Thirty-four  States  and 
Territories  and  the  Federal  Government  have  enacted  laws  of  this 
character.  The  Federal  statute  applies  to  the  organized  and  un- 
organized Territories  having  coal  mines  in  operation 

The  provisions  for  the  regulation  of  mines  are  quite  similar  in  the 
leading  mining  States,  the  difference  being  mainly  in  the  extent  to 
which  regulation  is  undertaken.  They  may  be  grouped  into  the 
following  classes,  namely:  Provisions  of  law  (i)  concerning  employ- 
ment in  mines;  (2)  insuring  the  health  and  safety  of  mine  employees; 
(3)  making  special  regulations  for  mines  generating  fire  damp  or 
other  explosive  gases;  (4)  protecting  the  rights  of  miners  by  regulat- 
ing the  manner  of  weighing  or  measuring  the  quantity  of  coal 
mined.  .  .  . 

The  railway  labor  laws  enacted  by  the  various  States  and  by  the 
Federal  Government  (see  chart)  have,  with  few  exceptions,  the  object 
of  protecting  the  health  and  safety  and  the  rights  of  employees, 
and  of  reducing  to  a  minimum  the  liability  of  the  traveling  public  to 
accidents  and  inconvenience  on  account  of  acts  of  employees.  They 
may  be  considered  under  five  groups,  namely:  Laws  (i)  regulating 
the  employment  of  certain  classes  of  persons,  (2)  prohibiting  certain 
acts  of  railway  employees,  (3)  protecting  the  rights  of  railway  em- 
ployees, (4)  requiring  certain  mechanical  equipment  on  railways  for 
the  protection  of  the  health  and  safety  of  employees,  (5)  concerning 
the  reporting  and  investigating  of  accidents  to  employees.  .  .  . 

Hours  of  Labor. —  The  statutes  relating  to  hours  of  labor  (see 
chart)  that  have  been  enacted  in  the  various  States  may  be  considered 
under  five  groups,  namely:  (i)  General  laws  which  merely  fix  what 
shall  be  regarded  as  a  day's  labor  in  the  absence  of  contract;  (2) 
laws  defining  what  shall  constitute  a  day's  work  on  public  roads; 

(3)  laws  limiting  the  hours  of  labor  per  day  on  public  works  generally; 

(4)  laws  which  limit  the  hours  of  labor  in  certain  occupations;    (5) 
laws  which  specify  the  hours  per  day  or  per  week  during  which  women 
and  children  may  be  employed.     The  statutes  considered  in  the  first 
four  groups  relate  to  employees  regardless  of  age  or  sex.  .  .  . 

The  following  10  States  have  passed  laws  declaring  that  eight 
hours  shall  be  regarded  a  legal  day's  work  unless  otherwise  agreed: 
California,  Connecticut,  Illinois,  Indiana,  Missouri,  Montana,  New 
York,  Ohio,  Pennsylvania,  and  Wisconsin.  The  following  7  States 
fix  the  legal  working-day  at  10  hours:  Florida,  Maine,  Michigan, 


804  READINGS,  IN  ECONOMIC  HISTORY 

Minnesota,  Nebraska,  New  Hampshire,  and  Rhode  Island.  In 
New  Jersey  a  week's  work  is  denned  as  consisting  of  55  hours.  .  .  . 

All  States  and  Territories  except  Arizona,  California,  Idaho, 
Nevada,  and  the  Philippine  Islands  have  laws  prohibiting  the  employ- 
ment of  labor  on  Sundays.  In  California,  however,  it  is  a  misde- 
meanor for  any  employer  to  cause  his  employees  to  work  more  than 
six  days  in  seven  except  in  cases  of  emergency.  .  .  . 

Much  of  the  legislation  enacted  for  the  protection  of  women 
employees  (see  chart)  is  similar  to  that  for  child  labor.  In  many 
cases  the  same  provision  of  law  applies  to  both  women  and  children. 
This  is  especially  true  in  the  case  of  legislation  concerning  hours  of 
labor  and  employment  in  mines  and  barrooms.  The  existing  statutes 
concerning  female  labor  may  be  grouped  as  follows:  (i)  Statutes 
prohibiting  the  employment  of  women  in  certain  occupations,  as 
in  mines,  underground  workings,  and  smelting  and  refining  works,  in 
barrooms,  and  in  operating  dangerous  machinery  or  cleaning  ma- 
chinery while  in  motion;  (2)  statutes  limiting  the  hours  of  labor; 
(3)  statutes  prohibiting  or  restricting  night  \vork;  (4)  statutes  re- 
quiring seats  for  female  employees;  (5)  statutes  requiring  separate 
toilet  facilities  for  female  employees;  (6)  legislation  not  included  in 
the  above  groups.  .  .  . 

In  1 8  States  and  i  Territory  a  limitation  has  been  placed  upon 
the  number  of  hours  per  day  or  per  week  that  women  may  work  in 
manufacturing,  mechanical,  or  mercantile  establishments.  In  nearly 
all  of  these  States  the  same  provisions  which  relate  to  women  apply 
also  to  children.  .  .  . 

Five  States  prohibit  the  employment  of  women  at  night.  .  .  . 

Thirty-one  States  and  the  District  of  Columbia  have  laws  re- 
quiring employers  to  provide  seats  for  the  use  of  female  employees 
when  they  are  not  actively  engaged  in  their  duties.  .  .  . 

Seventeen  States  and  the  District  of  Columbia  have  laws  requiring 
employers  to  provide  toilet  facilities  for  the  separate  use  of  females 
when  employed.  .  .  . 

Legislation  relating  to  child  labor  is  so  varied  in  character  in  the 
different  States  and  Territories  that  it  is  difficult  to  classify  it  satis- 
factorily. For  the  purpose  of  the  present  outline  it  has  been  most 
convenient  to  consider  child-labor  legislation  under  the  following 
groups:  (i)  Statutes  fixing  an  absolute  age  limit  for  the  employment 
of  children  in  all  gainful  occupations  or  in  one  or  more  of  the  principal 
groups  of  industries;  (2)  statutes  prohibiting  the  employment  of 
children  of  school  age  or  of  illiterate  children  during  school  time  or 


POPULATION    AND    LABOR  805 

unless  they  have  complied  with  certain  educational  requirements; 

(3)  statutes  prohibiting  the  employment  of  children  in  dangerous, 
injurious,  or  immoral  occupations,  such  as  selling  or  handling  in- 
toxicating liquors,  or  as  rope  or  wire  walkers,  gymnasts,  contortion- 
ists, street  singers  or  musicians,  mendicants,  itinerant  peddlers,  etc.; 

(4)  statutes  prohibiting  certain  dangerous  operations,  such  as  running 
elevators,   cleaning   machinery   in  motion,   or   operating   dangerous 
machinery,  etc.;   (5)  statutes  restricting  the  hours  of  labor  or  prohib- 
iting night  work  on  the  part  of  children ;    (6)  legislation  not  included 
in  the  above  groups. 

The  age  limit  prescribed  by  law  in  the  different  States,  under 
which  employment  is  absolutely  prohibited,  is  either  16,  14,  13,  12, 
or  10  years.  As  above  stated,  the  law  applies  in  some  States  to  only 
one,  in  others  to  several  groups  of  industries.  In  some  cases  an  age 
limit  is  prescribed  under  which  children  can  not  be  employed  except 
during  vacation,  and  in  some  an  age  limit  is  fixed  under  which 
persons  can  not  be  employed  in  certain  occupations  or  during 
certain  hours.  .  .  . 

F.    Workmen's  Compensation,  igi j1 

Probably  no  subject  connected  with  the  improvement  in  the  position  of  labor 
has  received  more  widespread  recognition  and  support  in  recent  years  than  that 
of  the  indemnification  of  workmen  for  injuries  received  in  the  pursuit  of  their 
work.  Lack  of  space  prevents  adequate  discussion,  but  this  extract  will  indicate 
the  importance  of  the  subject. 

The  Fourth  Special  Report  of  the  Commissioner  of  Labor,  issued 
in  1893  under  the  title  of  "Compulsory  Insurance  in  Germany,"  was 
the  first  report  published  in  this  country  devoted  to  the  subject  of 
workmen's  insurance.  At  that  time  compensation  for  industrial 
accidents  had  been  established  by  law  in  two  countries  only,  Ger- 
many in  1884,  and  Austria  in  1887;  the  third  country  —  Norway  - 
not  following  until  1894.  In  the  other  countries  discussed  in  the 
appendix  of  this  early  report  the  workmen's  compensation  movement 
had  not  passed  beyond  the  stage  of  Government  commissions  and 
legislative  discussion. 

Since  the  publication  of  this  first  report,  the  development  of  the 
legislation  providing  for  workmen's  compensation  for  industrial  acci- 
dents in  Europe  and  throughout  the  world  has  been  extremely  rapid; 

1  Workmen's  Compensation  Laws  of  the  United  Slates  and  Foreign  Countries. 
Bulletin  of  the  United  States  Bureau  of  Labor  Statistics,  No.  126  (Washington, 
1914),  9-10. 


806  READINGS  IN  ECONOMIC  HISTORY 

in  fact,  it  may  be  doubted  whether  any  subject  of  labor  legislation 
has  ever  made  such  progress  or  gained  so  general  acceptance  for  its 
principles  throughout  the  world  in  so  brief  a  period.  The  legislative 
summaries  in  the  present  report  show  that  41  foreign  countries  (in- 
cluding all  European  countries  except  Turkey)  have  introduced  some 
form  of  workmen's  compensation  for  industrial  accidents,  all  of  which, 
while  showing  great  variations  in  the  industries  covered,  the  amount  of 
compensation  provided,  and  the  methods  by  which  compensation 
payments  are  secured,  recognize  the  principles  of  compensation  as 
distinguished  from  the  older  idea  of  employer's  liability  previously 
accepted  in  the  civil  law  of  continental  Europe,  as  well  as  in  English 
and  American  law. 

In  the  United  States  what  might  be  called  the  period  of  investiga- 
tion and  education  began  somewhat  late  as  compared  with  European 
countries.  But  since  that  beginning,  investigation  and  study  have 
been  followed  by  legislative  action  with  great  rapidity.  The  first 
American  State  commissions  were  appointed  in  New  York,  Wis- 
consin, and  Minnesota  in  1909,  and  legislation  followed  in  New  York 
in  1910,  in  Wisconsin  in  1911,  and  in  Minnesota  in  1913.  Within 
this  period  beginning  with  1009,  27  commissions  (not  including  one 
Federal  commission)  have  been  appointed  to  consider  the  subject  of 
compensation,  and  compensation  legislation  has  been  enacted  in  23 
States. 

G.    The  Federal  Compensation  Act,  1908  l 

The  federal  government  was  a  pioneer  in  the  United  States  in  the  enactment 
of  legislation  granting  compensation  to  employees  injured  while  at  work.  It  thus 
recognized  the  necessity  of  placing  the  social  cost  of  industrial  accidents  upon  the 
industry  itself  rather  than  upon  the  laborer.  Its  example  has  since  been  followed 
by  the  leading  industrial  and  mining  states  of  the  Union. 

Injuries  to  workmen  in  the  course  of  their  employment  may  be 
due  to  negligence  or  to  accident.  Where  negligence  is  the  cause,  the 
fault  may  be  that  of  the  workman  or  his  employer,  of  a  fellow  workman, 
or  even  a  stranger.  Where  accident  is  the  cause,  no  one  is  at  fault. 
In  all  cases  the  suffering  and  the  loss  fall  on  the  injured  person  and  his 
dependents,  except  in  so  far  as  the  law  permits  the  loss  to  be  compen- 
sated. The  rules  of  the  common  law,  which  were  formulated  at  a 
time  when  industrial  operations  were  simple  and  conducted  in  small 
establishments  where  responsibility  could  easily  be  fixed,  permitted 

1  Opinions  of  the  Solicitor  for  the  Department  of  Commerce  and  Labor  dealing 
with  Workman's  Compensation  .  .  .  from  August,  1908,  to  August,  1912.  (Wash- 
ington, 1912),  Q-II. 


POPULATION    AND    LABOR  807 

recovery  only  where  the  workman  or  his  representatives  could  estab- 
lish negligence  on  the  part  of  the  employer,  and  denied  relief  if  his 
own  negligence  in  any  way  contributed  to  the  injury  or  if  the  injury 
was  due  to  the  negligence  of  a  fellow  servant  or  a  stranger,  and  also 
compelled  the  worker  to  assume  the  risks  incident  to  a  dangerous  em- 
ployment. For  injuries  due  to  accidents  alone  there  could  be  no 
recovery,  since  a  legal  wrong  could  be  imputed  to  no  one.  The  altered 
situation,  growing  out  of  the  immense  changes  made  in  industrial 
conditions,  brought  a  realization  of  the  great  injustice  worked  by 
established  rules  of  law.  Irrespective  of  the  negligence  of  the  employer 
or  a  fellow  servant  or  a  stranger,  and  irrespective  of  the  risks  incident 
to  dangerous  occupations,  it  was  recognized  as  grossly  unjust  that 
the  victim  alone  should  be  allowed  to  bear  the  entire  consequences 
and  all  the  burden  of  an  industrial  accident  or  injury.  It  was  seen 
that  the  employment  itself,  if  not  the  cause  of  the  injury,  furnished 
at  least  the  occasion  or  the  condition  without  which  it  could  not  have 
occurred.  The  principle  was  then  formulated  and  accepted  that  the 
financial  loss  occasioned  by  injuries  received  in  the  course  of  employ- 
ment was  a  proper  charge  against  the  industry  itself,  at  least  where 
the  injury  was  not  plainly  due  to  the  negligence  or  misconduct  of  the 
person  injured.  A  means  was  thus  provided  whereby  the  burden 
in  such  cases  could  be  shifted  in  a  measure  from  a  single  victim  and 
distributed  among  many  persons. 

This  principle  was  adopted  and  applied  by  the  Federal  Govern- 
ment in  the  act  of  May  30,  1908,  "granting  to  certain  employees  of 
the  United  States  the  right  to  receive  from  it  compensation  for  injuries 
sustained  in  the  course  of  their  employment."  Although  this  act  is 
of  limited  application  and  provides  but  a  limited  measure  of  relief, 
its  benefits  have  been  many  and  real.  It  applies  only  to  injuries 
received  by  artisans  or  laborers  employed  in  the  manufacturing  estab- 
lishments, arsenals,  or  navy  yards  of  the  United  States,  or  in  river 
and  harbor  or  fortification  work,  or  in  hazardous  employment  in  the 
Reclamation  Service  and  under  the  Isthmian  Canal  Commission, 
under  the  Bureau  of  Mines  and  in  the  Forestry  and  Lighthouse  Serv- 
ices. But  any  such  workman,  injured  in  the  course  of  his  employ- 
ment, is  entitled  to  receive  for  one  year  thereafter,  unless  sooner  able 
to  resume  work,  the  same  pay  as  if  he  continued  to  be  employed, 
except  where  the  injury  was  due  to  his  own  negligence  or  misconduct. 
If  the  injury  should  result  in  death  during  the  year,  the  compen- 
sation allowed  is  payable  to  the  widow  or  children  or  dependent 
parent.  .  .  . 


8o8  READINGS  IN  ECONOMIC  HISTORY 

An  idea  of  the  benefits  derived  under  the  compensation  act  may 
.  be  obtained  from  a  consideration  of  a  few  figures.  The  act  has  been 
in  operation  since  August  i,  1908.  Between  that  date  and  December 
i,  1911,  compensation  was  paid  in  5,564  cases  of  injury,  in  165  of  which 
the  injury  resulted  in  death.  On  account  of  these  fatal  injuries 
$112,879.02  has  been  paid  to  surviving  dependents.  On  account  of 
the  nonfatal  injuries  $704,814.60  has  been  paid  to  the  injured  persons 
themselves.  .  .  . 

H.   Wages  and  Prices,  1870-1901 x 

The  changes  in  wages  and  prices  between  1870  and  1901  resulted  in  a  decline 
in  prices  and  a  rise  of  wages,  so  that  the  net  result  was  distinctly  favorable  to 
the  wage  receivers.  Since  that  time,  however,  there  has  been  a  net  decline 
in  wages. 

In  considering  the  changes  which  have  occurred  in  recent  years 
in  the  earnings  of  labor  there  are  two  factors  to  be  taken  into  ac- 
count, namely,  money  wages  and  cost  of  living. 

.  .  .  The  accompanying  table  and  chart  are  designed  to  show  the 
movements  of  wages.  .  .  .  The  compilations  of  the  Department  of 
Labor  for  the  years  1870  to  1898  include  25  occupations,  representing 
building  trades,  machine  trades,  and  the  higher  grades  of  railroad 
employees,  together  with  street  laborers  and  teamsters.  Another 
compilation  of  the  Department  of  Labor,  covering  the  years  1891-1900, 
includes  192  occupations.  Each  of  these  series  of  wage  statistics  has 
been  compiled  in  the  accompanying  table,  and  has  been  graphically 
presented  in  the  accompanying  chart,  by  taking  the  average  wages 
of  the  year  1891  as  a  standard,  equivalent  to  100,  and  then  computing 
the  wages  of  other  years  as  percentages  of  this  standard  year.  By 
this  method  it  can  be  seen  that  wages  in  the  25  selected  occupations 
touched  the  lowest  point  in  1876,  when  they  stood  at  85.5  per  cent 
of  the  figure  for  1891,  and  that  from  that  time  until  1893  there  was  a 
steady  increase,  followed  by  a  decline,  until  1898,  when  they  stood 
at  95.62  per  cent  of  the  figure  for  1891.  At  the  same  time,  the  wages 
of  the  192  occupations  for  the  years  1891  to  1898  show  a  close  parallel 
with  those  of  the  25  selected  occupations,  and  from  1898  to  1900 
they  rose  4.6  per  cent.  .  .  . 

At  the  same  time  the  decrease  in  the  cost  of  many  of  the  commodi- 
ties most  used  by  the  working  classes  is  a  factor  which  has  tended 
to  make  their  actual,  as  distinguished  from  money  wages,  greater.  .  .  . 

1  Final  Report  of  the  Industrial  Commission.  (Washington,  1902),  XIX, 
730-734,  Passim. 


POPULATION    AND    LABOR 

Relative  movement  of  wages  and  wholesale  prices 


809 


Year 

Prices 
(in  gold)  * 

Prices  2 

25  occupa- 
tions, wages 
gold  (wages 
for  1891 
being 
ioo)3 

Wages,  192 
occupations4 

Wages  of 
farm  labor 
(in  gold) 
per  month 
without 
board  5 

1869 

104.  8 

1870 

84  64 

1871 

04  .00 

1872 

96  .  26 

187? 

Q2     IT, 

l8?A 

116  6 

oo  .  46 

187? 

88.li 

02  .0 

1876 

108  7 

85.65 

1877 

88.21 

1878 

90.  66 

1870 

91  .  12 

88.3 

Tea0 

QI    04 

T»«T 

T/~|8      A 

QA  =;o 

1882 

96.  1  6 

101  .  7 

TQQ, 

07   O> 

r88/i 

07.8^ 

r88c 

O7  .  1  > 

96.6 

TQQA 

07    i  z 

T88-7 

93-4 

O7    O^ 

TQQJJ 

94-5 

98.  °5  2 

98.0 

rSSn 

nQ     r 

98  82 

r8r>n 

9°  -5 

00    ^1 

98.6 

iSgi 
I8O2 

93-7 
94-4 

95 

100.00 

ioo.  59 

100.00 
100.30 

IOO.O 

1893 
1894 

1895 
1896 
l897 
1898 
1899 
I9OO 
I9OI 

90 
82 
81 
77 
73 
79 
77 
90 
88 

99-94 
97.98 
97.19 
96.60 
96.  ii 
95.62 

99-32 
98.06 
97.88 

97-93 
98.96 
98.79 
101.54 
IQ3-43 

IO2.6 

95-4 
95-i 

104.2 
108.7 

1  Jan.  i.     (Aldrich  Report,  Senate  Rep.,  52d  Cong.,  2d  sess.,  Pt.  I,  p.  ioo.) 

2  Year  ending  June  30.     (Bureau  of  Economic  Research.) 

3  Year  ending  Dec.  31.     (Bulletin,  Department  of  Labor,  Sept.,  1898.) 

4  Year  ending  Dec.  31.     (Bulletin,  Department  of  Labor,  July,  1900.) 

5  Year  ending  Dec.  31.     (Dept.  of  Agr.,  Bulletin  22,  Mis.  Series,  1901.) 


8io  READINGS  IN  ECONOMIC  HISTORY 

Taking  into  account  these  observations,  it  must  be  concluded 
that  the  daily  rate  of  wages  is  not  a  safe  measure  of  the  changing 
conditions  of  labor,  and  that  in  a  discussion  of  the  progress  of  the 
working  population  account  must  be  taken  of  the  amount  of  annual 
employment,  depending  on  general  conditions  of  prosperity  and  de- 
pression, the  life  earnings  of  the  worker,  depending  upon  the  increas- 
ing intensity  of  exertion  and  overwork,  and  the  increased  necessary 
expenses  of  city  life. 

I.  Higher  Cost  of  Living,  IQIO  1 

Wages  may  be  nominally  high,  that  is,  the  laborer  may  receive  a  larger  number 
of  dollars  than  formerly,  but  if  the  prices  of  the  commodities  for  which  he  spends 
his  money  have  also  advanced,  his  real  wages  may  have  remained  stationary  or 
even  declined.  Hence  it  is  very  important  in  every  investigation  of  wages  to 
establish  also  the  movement  of  prices. 

The  advance  in  prices  has  been  world-wide,  although  the  products 
of  the  farm  and  food  products  have  advanced  much  more  rapidly 
than  have  manufactured  articles.  This  is  probably  due  to  two  causes ; 
first,  the  prices  of  farm  products  and  of  food  are  more  sensitive  than 
manufactured  commodities  and  would  therefore  respond  more  quickly 
to  causes  producing  higher  prices;  and,  second,  a  study  of  the  course 
of  prices  of  such  farm  products  and  food  as  are  produced  in  the 
United  States  indicates  that  the  demand  has  outgrown  the  production 
of  such  commodities,  and  that  the  production  of  manufactured 
articles  and  of  articles  usually  imported  into  the  United  States  have 
outgrown  our  production  of  farm  products  and  domestic  food  supplies. 
This  condition  has  no  doubt  been  brought  about  to  a  considerable 
extent  by  the  withdrawal  from  the  farms  of  large  numbers  of  persons 
who  have  entered  industrial  pursuits  and  become  food  consumers 
rather  than  food  producers,  and  to  the  rapidly  increased  cost  of  pro- 
duction of  farm  products.  .  .  . 

Retail  prices  in  the  United  States  in  the  spring  of  1910  were  for 
many  articles  at  the  highest  point  reached  for  many  years.  As  com- 
pared with  the  spring  of  1900  prices  for  bacon  were  more  than  70 
per  cent  higher,  ham  was  33  per  cent  higher,  flour  was  about  50  per 
cent  higher,  butter  about  45  per  cent  higher,  sugar  12  per  cent  higher, 
and  eggs  100  per  cent  higher.  Some  few  articles,  such  as  coffee  and 
tea,  were  about  the  same  price  as  in  1900,  but  practically  no  articles 
of  food  were  lower  than  in  1900.  .  .  . 

1  Investigation  Relative  to  Wages  and  Prices  of  Commodities.  6ist  Cong.,  jd 
sess.,  Sen.  Doc.  No.  847  (Washington,  1911),  I,  10,  37,  52. 


POPULATION    AND    LABOR  811 

Wages  have  not  advanced  as  rapidly  as  have  prices  and  practically 
all  labor  difficulties  which  have  been  the  subject  of  mediation  in  the 
United  States  during  the  past  two  or  three  years  have  had  as  their 
basis  the  advanced  cost  of  living.  In  the  United  States  wages  have 
advanced  much  more  rapidly  than  they  have  in  European  countries, 
in  fact  in  some  European  countries  practically  no  advance  has  been 
made  during  the  ten  years  under  consideration. 

Wages  in  the  United  States  advanced  in  about  the  same  degree  as 
did  prices  until  1907.  Owing  to  the  industrial  depression  of  1908, 
following  the  financial  panic  of  the  fall  of  1907,  wages  dropped  con- 
siderably and  in  1909  hardly  more  than  regained  the  high  point 
reached  in  1907. 

Wages  at  the  present  time  are  not  on  as  high  a  level  as  are  food 
prices.  Salaries  have  advanced  but  very  little  during  the  past  ten  years. 

Hours  of  labor  in  practically  all  wage  occupations  have  been  re- 
duced. The  United  States  Bureau  of  Labor  compilation  of  wages 
and  hours  of  labor  in  the  principal  manufacturing  industries  has  not 
been  continued  later  than  1907.  In  1907,  wages  were  22.1  per  cent 
above  1900.  Hours  of  labor  per  week  during  the  same  period  were 
reduced  3.7  per  cent.  The  decline  in  hours  of  course  affected  the 
weekly  earnings  of  employees  for  the  reason  that  the  large  majority 
of  wage  earners  are  employed  either  on  the  piece  basis  or  at  an  hourly 
rate.  From  1900  to  1907  full  time  weekly  earnings  advanced  17.6 
per  cent,  while  wholesale  prices  of  commodities  advanced  17.2  per 
cent,  or  in  almost  exactly  the  same  proportion. 

J.   A  Nation  at  Work,  1880 1 

It  has  generally  been  remarked  that  in  the  United  States  there  is  practically 
no  leisure  class;  ninety-three  per  cent  of  the  men  in  the  productive  age  periods 
from  16  to  60  are  at  work  and  the  rest  are  presumably  preparing  for  work.  Ap- 
parently the  women  show  a  larger  proportion  not  engaged  in  gainful  occupations, 
but  if  we  allot  one  woman  as  housekeeper  to  each  of  the  10,000,000  families  in 
the  country  in  1880,  the  proportion  of  the  unoccupied  among  the  women  is  about 
the  same  as  for  the  men.  Since  1880  the  proportion  of  the  population  over  ten 
years  of  age  engaged  in  gainful  occupations  has  increased. 

The  following  table  makes  comparison  between  the  number  of 
inhabitants  of  either  sex  in  each  of  the  periods  of  life,  taken  for  the 
purposes  of  these  tables,  and  the  corresponding  number  of  persons 
returned  as  pursuing  gainful  occupations: 

1  Statistics  of  the  Population  of  the  United  States  at  the  Tenth  Census.  (Wash- 
ington, 1883),  I,  704. 


READINGS  IN  ECONOMIC  HISTORY 


Total  10  years  and 
upward 

Male           Female 

16  to  59 
Male           Female 

Population   (10  years  of  age 
and  upward)    . 

18,735,980 

14,744,942 

18,025,627 
2,647,157 

13,907,444 
12,986,111 

i3,377,oc2 
2.283,115 

Number  on  occupation  tables.  . 
Unaccounted  for  

3,991,038 

15,378,470 

921,333 

11,093,887 

Between  16  and  59  the  number  of  males  unaccounted  for  is  921,333 
[or  7  per  cent].  This  number  is  made  up  chiefly  of  the  following 
classes:  First,  those  students  who  are  pursuing  courses  of  study 
beyond  the  age  of  16;  second,  those  who  are  afflicted  by  permanent 
bodily  or  mental  infirmities,  disqualifying  them  from  participating 
in  the  industry  of  the  country;  third,  the  members  of  the  criminal 
and  pauper  classes.  The  number  of  men  of  this  period  of  life,  not  dis- 
abled, who  are  not  returned  as  of  some  occupation  by  reason  of  in- 
herited wealth  or  of  having  retired  from  business  is  hardly  important 
enough  in  this  country  to  be  mentioned.  The  number  of  females 
between  16  and  59  not  accounted  for  in  these  tables  is,  naturally, 
vastly  larger,  and  amounts  to  11,093,887  [or  83.5  per  cent].  That 
body  is  made  up  of  the  three  classes  just  mentioned  when  speaking 
of  the  males  of  this  period  of  life,  and  of  the  far  greater  classes  of 
women  —  wives,  mothers,  or  grown  daughters,  keeping  house  for  their 
families  or  living  at  home  without  any  special  avocation.  .  .  . 


CHAPTER   XXIII 

ECONOMIC  PROGRESS,   1860-1915 
I.  WEALTH  OF  THE  PEOPLE  or  THE  UNITED  STATES 

National  Wealth,  1850-1912  1 

In  an  effort  to  gauge  the  economic  progress  of  the  last  half  century  we  may 
properly  begin  with  an  estimate  of  the  increase  in  the  wealth  of  the  people  of  the 
United  States.  This  has  grown  from  a  total  of  7  to  187  billion  dollars,  between 
1850  and  1912,  while  the  per  capita  amount  has  increased  from  $308  to  $1965  in 
the  same  period.  The  character  of  this  wealth  and  its  amount  in  comparison  with 
that  of  other  countries  are  also  shown  in  this  extract.  All  the  facts  show  a  large  and 
rapid  increase  in  the  wealth  of  the  nation  as  a  whole. 

TABLE  i.  —  Estimated  True  Value  of  all  Property 

Date                                    Total  Per  Capita 

1850                               $7,135,780,228  $308 

1860                               16,159,616,068  514 

1870                               24,054,814,806 l  624 

1880                               43,642,000,000  870 

1890                               65,037,091,197  1,036 

1900                               88,517,306,775  1,165 

1004  107,104,192,410  1,318 

1912  187,739,071,090  1,965 

1  Gold  basis. 

.  .  .  These  estimates  have  been  prepared  upon  two  different  bases 
and  by  a  number  of  different  methods.  The  estimates  for  1850, 
1860,  and  1870  were  confined  to  taxable  real  property  and  the  personal 
property  of  private  individuals,  firms,  and  corporations.  They  did 
not  include  any  estimates  of  the  value  of  the  public  domain  nor  of 
other  exempt  realty,  nor  of  the  value  of  the  furniture  or  equipment 
of  public  buildings  of  governments  nor  of  charitable,  religious,  or 
educational  institutions,  all  of  which  were  included  in  the  estimates 
for  1880,  1890,  1900,  1904,  and  1912.  .  .  . 

Estimates  for  1912  and  1000.  —  Table  2,  which  follows,  affords  a 
ready  means  of  comparing  the  total  values  of  the  several  classes  of 
wealth  in  1912  with  those  of  1900.  .  .  . 

1  Estimated  Valuation  of  National  Wealth,  1850-1912.  Census  Bulletin 
(Washington,  1915),  14-16,  18-20. 


8i4  READINGS  IN  ECONOMIC  HISTORY 

TABLE  2.  —  Estimates  of  Wealth  for  1912  and  1900 
(in  millions  of  dollars) 


Form   of   Wealth 


1912 


1900 


Total $187,739         88,517 

Real  property  and  improvements  taxed 98,362  46,324 

Real  property  and  improvements  exempt 12,313  6,212 

Live  stock 6,238  3,306 

Farm  implements  and  machinery 1,368  749 

Manufacturing  machinery,  tools,  and  implements 6,091  2,541 

Gold  and  silver  coin  and  bullion 2,616  1,677 

Railroads  and  their  equipment 16,148  9,035 

Street  railways,  etc.: 

Street  railways 4,596  1,576 

Telegraph  systems  l 223  211 

Telephone  systems 1,081  400 

Pullman  and  cars  not  owned  by  railroads 123  98 

Shipping  and  canals 1,491  537 

Irrigation  enterprises 360  .... 

Privately  owned  waterworks 290  267 

Privately  owned  central  electric  light  and  power  stations  2,098  402 
All  other: 

Agricultural  products 5,240  i,455 

Manufactured  products 14,693  6,087 

Imported  merchandise 826  424 

Mining  products 815  326 

Clothing  and  personal  adornments 4,295  2,000 

Furniture,  carriages,  and  kindred  property 8,463  4,880 

1  Includes  wireless  systems. 

Estimated  wealth  of  different  countries.  —  Owing  to  the  insufficiency 
of  official  and  trustworthy  data  pertaining  to  the  subject,  it  has  been 
impossible  to  prepare  a  summary  of  the  aggregate  wealth  of  all  nations. 
The  following  statement  summarizes  the  information  concerning  the 
wealth  of  the  principal  nations  as  it  has  been  assembled  by  Augustus  D. 
Webb,  Fellow  of  the  Royal  Statistical  Society,  and  published  in  "The 
New  Dictionary  of  Statistics"  for  1911.  The  authority  referred  to 
gives  the  values  in  pounds  sterling.  The  reduction  to  dollars  is  at 
the  rate  of  $4.8665  per  pound  sterling.  It  will  be  observed  that  the 
figures  for  the  United  States  are  those  compiled  by  the  Bureau  of 
the  Census  for  the  year  1904.  The  data  presented  are  far  from  com- 
parable because  of  the  difference  in  dates  for  which  the  estimates 
were  made  and  the  character  of  the  data  included.  , 


ECONOMIC    PROGRESS 


Country 

Year 

Character  of  data 

Amount 

United  States  

1904 
1903 

!9°3 
1003 
1903 
1903 

1903 
J9°3 

0) 
1900 
1908 
1903 
1905 

1907 

Total  wealth 

$107,104,192,410 
108,279,625,000 

British  Empire  

Total  wealth 

United  Kingdom  

Total  wealth  . 

72,997,500,000 
6,569,  775,000 
5,353,150,000 
14,599,500,000 
2,919,900,000 
5,839,800,000 

46,798,500,000 
1,946,600,000 
77,864,000,000 
4,578,903,000 
1,605,945,000 

428,939,492 

Canada  

Total  wealth 

Australasia  

Total  wealth 

India  

Total  wealth 

South  Africa  

Total  wealth  .  . 

Remainder  of  Empire. 
France  

Total  wealth  .  . 

Private  wealth 

Denmark  

Total  wealth 

Germany  

Total  wealth 

Australia  

Private  wealth 

New  Zealand  

Public  and  private  wealth. 
Fixed  propertv.  .  . 

Cape  of  Good  Hope  

1  "  Recently." 

II.   DISTRIBUTION  OF  WEALTH 

A.   Labor's  Share  in  the  Net  Product  of  Industry,  1850-1880  l 

It  is  not  enough  to  show  that  there  has  been  an  increase  of  wealth  in  the  United 
States  during  the  past  half-century.  Even  more  important  from  a  social  point  of 
view  is  the  answer  to  the  question,  "Who  gets  this  wealth?"  An  effort  was  made 
to  answer  this  question  in  an  early  report  of  the  Massachusetts  bureau  of  statistics 
of  labor,  by  Carroll  D.  Wright,  who  afterwards  became  the  United  States  com- 
missioner of  labor.  Mr.  Wright  concludes  that  as  a  result  of  the  improvements  in 
machinery  the  relative  share  of  labor  in  the  net  product  of  industry  has  declined 
from  51  per  cent  in  1850  to  48.1  per  cent  in  1880. 

Net  product,  or  value  of  product  remaining  after  deducting  value 
of  raw  materials  of  manufacture,  represents  the  direct  result  of  the 
productive  forces  in  the  given  industry;  or,  in  other  words,  it  repre- 
sents the  value  created  over  and  above  the  value  of  raw  materials 
by  the  effective  operation  of  labor  and  capital  united. 

The  value  of  net  product  forms,  as  we  have  said,  a  fund  divisible 
into  interest  on  capital,  interest  on  loans,  insurance,  freights,  rents, 
commissions,  wages,  and  profits.  Now  if  the  relative  share  paid  to 

1  History  of  Wages  and  Prices  in  Massachusetts:  1752-1883.  Sixteenth  Annual 
Report  of  the  Massachusetts  Bureau  of  Statistics  of  Labor,  Parts  III  and  IV 
(Boston,  1885),  34-36. 


8i6  READINGS  IN  ECONOMIC  HISTORY 

labor  in  the  form  of  wages  is  decreased,  it  is,  of  course,  obvious  that 
the  share  remaining  for  the  other  purposes  mentioned  is  increased.  If 
capital  is  also  relatively  decreased,  then  it  is  fair  to  suppose  that  the 
share  chargeable  to  interest  is  also  diminished.  It  is  well  known  that 
the  relative  cost  of  freights  and  insurance  has  decreased.  Allowing, 
then,  for  a  possible  increase  in  rents  and  commissions,  it  would  seem 
probable  that,  in  the  industries  last  examined,  the  share  drawn  out 
as  profits  has  relatively  increased,  though  such  an  assumption  is 
perhaps  unwarranted  in  the  absence  of  definite  data.  It  is,  however, 
clearly  inferential  from  the  tables. 

It  is  well  established  that  the  proportionate  cost  of  labor  in  the 
finished  fabric  has  been  greatly  reduced  through  the  use  of  machinery. 
This  reduction  of  actual  labor  cost  has  been  an  important  element  hi 
reducing  the  price  of  product  to  the  consumer,  while  permitting  at  the 
same  time  a  liberal  increase  of  wages  to  the  laborer.  An  examination 
of  these  two  tables  would,  we  think,  lead  to  the  conclusion  that  al- 
though in  every  case  money  wages  have  considerably  increased,  yet 
in  certain  industries  in  which  the  principles  of  the  factory  system 
(i.e.,  sub-division  of  labor,  co-ordination  of  processes,  and  the  appli- 
cation of  a  series  of  mutually  dependent  and  practically  automatic 
machines)  have  been  most  effective,  such,  for  instance,  as  in  the  cotton 
and  woollen  industries,  the  relative  share  of  net  product  gained  by  the 
workman  tends  to  decrease.  That  is  to  say,  in  these  industries  per- 
fection of  machines  and  processes  constantly  tends  to  create  a  larger 
product  with  less  capital,  and  the  ratio  of  increase  in  productive 
capacity  tends  to  outrun  the  ratio  of  increase  in  wages,  so  that  of 
this  larger  product  labor  obtains  a  less  relative  share,  although  it  is 
produced  at  less  expenditure  of  time  and  effort,  and  rewarded  by  a 
constantly  increasing  wage. 

From  the  following  presentation  which  exhibits  the  same  data 
for  all  the  industries  in  the  United  States,  for  1850  and  1880,  it  appears 
that,  when  the  field  is  broadened  so  as  to  include  the  entire  manu- 
facturing industries  of  the  country,  labor's  share  of  net  product  has 
declined  from  51  to  48.1  per  cent.  This  slight  decrease,  however,  is 
more  than  offset  by  the  relative  increase  in  capital. 

It  appears  probable,  then,  that  when  all  industries  are  considered 
money  wages  have  not  only  increased,  but  that  a  slight  increase  has 
also  taken  place  hi  the  relative  share  of  net  product  secured  by  labor 
after  payment  of  interest  on  capital  invested. 


ECONOMIC    PROGRESS 

Ratio  of  Wages  to  Net  Product:   1850  and  1880 


817 


The  United  States 

Average 
wages 

1850 

Average 
wages 

1880 

Percentage  of 
net  product 
paid  as  wages 
1850 

Percentage  of 
net  product 
paid  as  wages 
1880 

All  industries  

$24.7.11 

S^j.6  oi 

/|S    T 

Ratio  of  Capital  to  Xct  Product:   iSjO  and  1880 


Amount  of 

Amount  of 

• 

capital 

capital 

Percentage  of 

The  United  States 

per  dollar  of 

per  dollar  of 

increase 

net  product 

net  product 

1850 

1880 

All  industries  

Si.  15 

81.41 

22  6 

B.   Profits  and  Wages,  1890-1900  l 

The  same  problem  that  was  discussed  in  the  previous  extract  was  taken  up 
by  the  Industrial  Commission  of  1898.  The  figures  given  as  to  the  relative  share 
of  labor  in  the  net  product  of  industry  show  a  further  decline  since  1880.  In  1890 
it  was  44.9  per  cent  and  in  1900  it  had  fallen  to  41  per  cent.  The  decade  1890- 
1900  had  also  witnessed  a  decrease  in  actual  wages,  so  that  the  lot  of  labor  was 
absolutely  as  well  as  relatively  worse  at  the  end  than  it  had  been  at  the  beginning 
of  this  period.  On  the  other  hand  the  Commission  points  out  that  there  has  been 
a  steady  tendency  for  interest  rates  to  fall  during  the  previous  thirty  years.  It 
may  be  said  that  in  all  points  concerning  labor  and  capital  this  report  was  very 
conservative. 

PROFITS  AND   WAGES 

The  problem  of  profits  and  wages  must  be  considered  under  two 
separate  and  wholly  distinct  aspects.  The  first  question  has  to  do 
with  the  share  of  the  product  of  industry  going  to  labor  as  compared 
with  the  share  going  to  owners  of  capital,  land,  monopolies,  etc.  The 
second  question  —  an  entirely  different  one  —  is  that  which  has  to 
do  with  actual  income  and  social  well-being  of  the  manual  working 
classes.  That  the  two  problems  are  quite  separate  may  be  shown  from 

1  Final  Report  of  the  Industrial  Commission.  Volume  XIX  of  the  Commis- 
sion's Reports  (Washington,  1902),  724-729- 


8i8  READINGS  IN  ECONOMIC  HISTORY 

the  fact  that,  on  the  one  hand,  the  share  of  the  social  product  going  to 
labor  might  be  continually  increasing  from  year  to  year  and  at  the  same 
time  the  actual  income  of  the  working  people  might  be  growing  less, 
provided  the  aggregate  product  of  society  itself  were  decreasing.  On 
the  other  hand,  the  actual  income  and  social  well-being  of  the  working 
population  might  be  on  a  steady  increase  and  yet  the  share  going 
to  labor  might  be  growing  smaller  and  smaller,  provided  the  aggre- 
gate production  were  increasing  in  greater  ratio  than  the  increase  in 
the  actual  income  of  the  working  people. 

UNCERTAINTY    OF    STATISTICS 

The  solution  of  the  first  of  these  questions,  that  having  to  do  with 
the  share  of  the  social  product  going  to  labor,  is,  perhaps,  the  most 
difficult  and  unsatisfactory  of  all  statistical  problems.  .  .  . 

Equally  misleading  are  the  conclusions  frequently  drawn  from  the 
census  of  the  United  States  respecting  the  proportion  of  the  total 
product  which  goes  to  capital  and  labor  respectively.  The  census  of 
1890,  for  example,  estimated  the  value  of  manufactured  products  for 
the  entire  United  States  at  $9,372,000,000,  and  the  aggregate  wages 
in  the  same  industries  at  $2,283,000,000,  according  to  which  it  would 
appear  that  labor  received  24.36  per  cent  of  the  joint  product.  But 
this  inference  is  manifestly  wrong,  since  the  cost  of  material  used  in 
manufactures  was  more  than  half  the  value  of  the  product,  viz., 
$5,162,000,000,  or  55.08  per  cent.  Miscellaneous  expenses  also  were 
6.73  per  cent  of  the  total  product.  The  proper  method  of  inquiry 
into  the  proportion  of  the  product  going  to  labor  is  that  which  separates 
out  the  cost  of  material  and  endeavors  to  discover  what  proportion 
of  the  net  product  is  assigned  to  labor.  If  this  is  done,  it  appears 
that  in  1890  the  net  product  of  all  manufacturing  industries  was 
$4,211,000,000,  and  of  this  net  product  the  total  wages  paid  would 
be  54  per  cent  instead  of  24  per  cent.  The  above  figure  for  wages, 
however,  includes  salaried  employees,  officers,  superintendents,  firm 
members,  and  clerks.  The  payment  to  wage-earners,  properly  speak- 
ing (but  including  some  overseers  and  foremen  on  salary),  was  $1,891,- 
228,321,  or  44.9  per  cent  of  the  value  of  the  net  product  of  manu- 
facturing industry. 

The  complete  figures  for  the  census  of  manufactures  of  1900  have 
been  secured,  a  trifle  in  advance  of  their  general  publication,  through 
the  courtesy  of  the  chief  of  the  Division  of  Manufactures.  The  net 
product  of  manufacturing  industry  in  the  United  States  by  the  Census 
of  1900  was  $5,669,335,584;  while  the  wages  paid  (not  including  any 


ECONOMIC   PROGRESS  819 

salaried  officers)  were  $2,323,407,257,  or  41  per  cent  of  the  net  product. 
.  .  .  There  has  been  a  decrease  in  the  proportion  of  the  total  product 
going  to  wage-earners;  while,  as  shown  elsewhere,  the  absolute 
amount  going  to  the  wage-working  class  has  slightly  decreased  per 
capita  during  the  decade.  Wages  in  1899,  the  year  actually  covered 
by  the  census  figures,  had  not  reached  a  point  as  high  as  in  1900  and 
1901.  In  a  period  of  rising  prosperity  wages  ordinarily  advanced 
less  rapidly  than  prices  and  profits. 

EARNINGS   OF   CAPITAL 

When  we  consider  the  entirely  different  problem  of  the  increase 
or  decrease  of  profits  and  wages  over  a  period  of  years,  we  are  met 
again  not  only  by  the  defects  of  statistical  inquiry,  but  by  inherent 
difficulties  of  the  problem.  As  regards  the  changes  in  the  rates  of 
interest  and  profits  over  a  period  of  years,  there  are  two  entirely  dif- 
ferent questions  to  be  considered.  The  first  is  the  interest  or  profit 
received  on  disposable  capital  seeking  investment  in  the  open  money 
markets.  The  second  is  the  profits  made  by  those  enterprises  which 
have  an  established  existence.  In  the  first  case  the  rate  of  interest 
depends  upon  the  opportunities  for  investment  which  have  not  yet 
been  occupied  and  which  may  be  much  less  profitable  than  those 
already  in  possession;  while  in  the  second  case  the  rate  of  profit  is 
determined  for  different  investments  by  the  different  conditions  sur- 
rounding each,  especially  the  possession  of  good  will,  trade-marks, 
patent  rights,  and  monopolies  of  various  kinds.  Monopoly  privi- 
leges, for  example,  wherever  they  exist,  become  more  and  more 
valuable  as  population  increases  and  the  net  returns  are  thereby 
augmented;  but,  at  the  same  time,  the  rate  of  interest  on  dispos- 
able capital  not  protected  by  these  privileges  has  continually  declined. 

As  regards  disposable  capital,  every  statistical  exhibit  of  value 
shows,  during  the  past  30  or  40  years,  this  steady  decline  in  the  rate 
of  interest.  Here  distinction  should  be  made  between  call  loans, 
loans  on  commercial  paper,  and  loans  on  long-time  securities.  The 
interest  on  call  loans  is  the  interest  on  bankers'  balances,  and  the  rate 
depends  largely  on  the  temporary  supply  of  legal  tender  and  the  con- 
dition of  the  Federal  Treasury,  whereas  the  interest  on  commercial 
paper  and  the  interest  received  on  long-time  investments  depends 
upon  the  general  business  prosperity.  The  following  table  and  statis- 
tical chart  exhibit  in  an  impressive  way  the  general  decline  of  interest 
on  these  classes  of  investments.  The  rates  on  call  loans  and  com- 
mercial paper  are  shown  for  New  York  City  from  the  year  1866  to 


820  READINGS  IN  ECONOMIC  HISTORY 

1901,  and  indicate  the  rapid  decline  immediately  thereafter  following 
the  year  1873,  and  the  more  gradual  decline,  with  fluctuations 
dependent  upon  current  conditions  of  business  prosperity  and  depres- 
sion. More  stable  than  the  rate  on  commercial  paper  is  that  received 
by  insurance  companies,  which  is  shown  for  30  years.  Here  it  appears 
that  the  average  rate  of  interest  for  the  years  from  1871  to  1875  was 
6.88  per  cent,  whereas  for  the  7  years  from  1891  to  1897  it  was  4.98 
per  cent.  .  .  . 

The  rates  of  interest  quoted  are,  as  already  stated,  those  received 
on  disposable  capital  which  is  open  to  competition  and  does  not  pos- 
sess any  special  privileges  or  advantages  protecting  it  from  competi- 
tors. When  it  is  attempted  to  discover  the  rate  of  profit  received 
on  capital  invested  in  business,  an  insurmountable  difficulty  is  pre- 
sented in  all  industries  except  one,  namely  national  banks.  .  .  . 
While  the  banking  business  fluctuates  with  the  general  conditions  of 
industry,  it  is,  of  course,  impossible  to  draw  conclusions  from  the  his- 
tory of  this  one  business  which  shall  apply  to  others  respecting  the 
rate  of  profits. 

C.  The  Growth  of  Large  Fortunes, 


A  very  different  answer  to  the  question  as  to  the  actual  distribution  of  wealth 
was  given  in  the  report  of  the  Commission  on  Industrial  Relations  in  1915.  Accord- 
ing to  this  report  most  of  the  wealth  is  going,  not  to  the  workers,  but  to  a  small 
group  of  rich  men,  in  whose  huge  fortunes  is  concentrated  an  ever-increasing  pro- 
portion of  the  national  wealth.  This  report  is  in  striking  contrast  with  that  of 
the  earlier  Industrial  Commission  of  1898,  and  is  decidedly  radical  in  its  tone  and 
recommendations. 

.  .  .  What  do  the  millions  get  for  their  toil,  for  their  skill,  for  the 
risk  of  life  and  limb?  That  is  the  question  to  be  faced  in  an  industrial 
nation,  for  these  millions  are  the  backbone  and  sinew  of  the  State, 
in  peace  or  in  war. 

First,  with  regard  to  the  adult  workmen,  the  fathers  and  potential 
fathers,  from  whose  earnings,  according  to  the  "American  standard," 
the  support  of  the  family  is  supposed  to  be  derived. 

Between  one-fourth  and  one-third  of  the  male  workers  18  years 
of  age  and  over,  in  factories  and  mines,  earn  less  than  $10  per  week; 
from  two-thirds  to  three-fourths  earn  less  than  $15,  and  only  about 
one-tenth  earn  more  than  $20  a  week.  This  does  not  take  into  con- 
sideration lost  working  time  for  any  cause. 

Next  are  the  women,  the  most  portentously  growing  factor  in  the 

1  Final  Report  of  the  Commission  on  Industrial  Relations  (Washington,  1915), 
25-27. 


ECONOMIC    PROGRESS  821 

labor  force,  whose  wages  are  important,  not  only  for  their  own  support 
or  as  the  supplement  of  the  meager  earnings  of  their  fathers  and  hus- 
bands, but  because,  through  the  force  of  competition  in  a  rapidly 
extending  field,  they  threaten  the  whole  basis  of  the  wage  scale.  From 
two-thirds  to  three-fourths  of  the  women  workers  in  factories,  stores 
and  laundries,  and  in  industrial  occupations  generally,  work  at  wages 
of  less  than  $8  a  week.  Approximately  one-fifth  earn  less  than  $4 
and  nearly  one-half  earn  less  than  $6  a  week.  .  .  . 

Last  of  all  are  the  children,  for  whose  petty  addition  to  the  stream 
of  production  the  Nation  is  paying  a  heavy  toll  in  ignorance,  deform- 
ity of  body  or  mind,  and  premature  old  age.  .  .  . 

This  is  the  condition  at  one  end  of  the  social  scale.  What  is  at 
the  other? 

Massed  in  millions,  at  the  other  end  of  the  social  scale,  are  fortunes 
of  a  size  never  before  dreamed  of,  whose  very  owners  do  not  know  the 
extent  nor,  without  the  aid  of  an  intelligent  clerk,  even  the  sources, 
of  their  incomes.  Incapable  of  being  spent  in  any  legitimate  manner, 
these  fortunes  are  burdens,  which  can  only  be  squandered,  hoarded, 
put  into  so-called  "benefactions"  which  for  the  most  part  constitute 
a  menace  to  the  State,  or  put  back  into  the  industrial  machine  to 
pile  up  ever-increasing  mountains  of  gold. 

In  many  cases,  no  doubt,  these  huge  fortunes  have  come  in  whole 
or  in  part  as  the  rich  reward  of  exceptional  service.  None  would  deny 
or  envy  him  who  has  performed  such  service  the  richest  of  rewards, 
although  one  may  question  the  ideals  of  a  nation  which  rewards  excep- 
tional service  only  by  burdensome  fortunes.  But  such  reward  can 
be  claimed  as  a  right  only  by  those  who  have  performed  service,  not 
by  those  who  through  relationship  or  mere  parasitism  chance  to  be 
designated  as  heirs.  Legal  right,  of  course,  they  have  by  virtue  of 
the  law  of  inheritance,  which,  however,  runs  counter  to  the  whole 
theory  of  American  society  and  which  was  adopted,  with  important 
variations,  from  the  English  law,  without  any  conception  of  its  ulti- 
mate results  and  apparently  with  the  idea  that  it  would  prevent 
exactly  the  condition  which  has  arisen.  In  effect  the  American  law 
of  inheritance  is  as  efficient  for  the  establishment  and  maintenance 
of  families  as  is  the  English  law,  which  has  bulwarked  the  British 
aristocracy  through  the  centuries.  Every  year,  indeed,  sees  this  ten- 
dency increase,  as  the  creation  of  "estates  in  trust"  secures  the  ends 
which  might  be  more  simply  reached  if  there  were  no  prohibition  of 
"entail."  According  to  the  income  tax  returns  for  ten  months  of 
1914,  there  are  in  the  United  States  1598  fortunes  yielding  an  income 


822  READINGS  IN  ECONOMIC  HISTORY 

of  $100,000  or  more  per  year.  Practically  all  of  these  fortunes  are  so 
invested  and  hedged  about  with  restrictions  upon  expenditure  that 
they  are,  to  all  intents  and  purposes,  perpetuities. 

An  analysis  of  50  of  the  largest  American  fortunes  shows  that  nearly 
one-half  have  already  passed  to  the  control  of  heirs  or  to  trustees 
(their  vice  regents)  and  that  the  remainder  will  pass  to  the  control 
of  heirs  within  twenty  years,  upon  the  deaths  of  the  "founders." 
Already,  indeed,  these  founders  have  almost  without  exception  retired 
from  active  service,  leaving  the  management  ostensibly  to  their  heirs 
but  actually  to  executive  officials  upon  salary. 

We  have,  according  to  the  income  tax  returns,  forty-four  families 
with  incomes  of  $1,000,000  or  more,1  whose  members  perform  little 
or  no  useful  service,  but  whose  aggregate  incomes,  totalling  at  the 
very  least  fifty  millions  per  year,  are  equivalent  to  the  earnings  of 
100,000  wage  earners  at  the  average  rate  of  $500. 

The  ownership  of  wealth  in  the  United  States  has  become  concen- 
trated to  a  degree  which  is  difficult  to  grasp.  The  recently  published 
researches  of  a  statistician  of  conservative  views 2  have  shown  that 
as  nearly  as  can  be  estimated  the  distribution  of  wealth  in  the  United 
States  is  as  follows: 

The  "  Rich,"  2  per  cent  of  the  people,  own  60  per  cent  of  the  wealth. 

The  "Middle  Class,"  33  per  cent  of  the  people,  own  35  per  cent  of 
the  wealth. 

The  "  Poor,"  65  per  cent  of  the  people,  own  5  per  cent  of  the  wealth. 

This  means  in  brief  that  a  little  less  than  two  million  people,  who 
would  make  up  a  city  smaller  than  Chicago,  own  20  per  cent  more  of 
the  Nation's  wealth  than  all  the  other  ninety  millions. 

The  figures  also  show  that  with  a  reasonably  equitable  division  of 
wealth,  the  entire  population  should  occupy  the  position  of  comfort 
and  security  which  we  characterize  as  Middle  Class. 

D.   Distribution  of  the  National  Income,  1850-1910  3 

The  most  careful  and  comprehensive  study  yet  made  of  the  distribution  of  the 
wealth  and  income  of  the  people  of  the  United  States  among  the  different  factors 
of  production  is  the  book  by  Dr.  King,  from  which  this  extract  is  taken.  This 

1  The  income  tax  statistics,  as  a  matter  of  fact,  cover  only  a  period  of  ten 
months  in  1914. 

2  Professor  Willford  I.  King,  The  Wealth  and  Income  of  the  People  of  the  United 
States. 

3  The  Wealth  and  Income  of  the  People  of  the  United  States.     By  Willford  I. 
King  (New  York,  1915),  154-172,  passim.     Printed  by  permission  of  the  author 
and  the  publishers,  The  Macmillan  Company. 


ECONOMIC    PROGRESS  823 

temperate  and  judicious  study  concludes  that  all  the  factors  have  shared  in  the 
increase  in  wealth,  while  the  technical  improvements  and  consequent  increase 
of  production  of  the  past  half -century  have  resulted  in  a  great  increase  in  the  pur- 
chasing power  of  the  earnings  of  all  classes. 

It  is  evident  that  the  economic  welfare  of  the  individuals  compos- 
ing each  group  or  class  will  depend  upon  three  things:  first,  the 
size  of  the  stream;  second,  the  share  going  to  the  group  or  class; 
third,  the  number  of  persons  within  the  class  among  which  the 
share  is  to  be  divided.  Any  study,  then,  of  the  relative  progress 
of  any  segment  of  the  population  involves  a  consideration  of  these 
three  points.  .  .  . 

Rent  has  been  estimated  as  a  percentage  of  the  value  of  the  land. 
This  involves  an  error  in  that  it  fails  to  account  for  the  fact  that  land 
value  represents  the  total  present  worth  of  future  as  well  as  of  present 
rentals,  and  so  takes  account  of  increases  in  the  rent  which  are 
expected  to  occur  later.  In  a  new  country,  where  steadily  rising  rents 
are  normally  anticipated,  the  value  of  land  is  considerably  greater 
than  that  obtained  by  capitalizing  the  present  rent  at  current  interest 
rates.  An  attempt  has  been  made  to  offset  any  error  from  this 
source  by  using  the  low  rate  of  four  per  cent  of  the  value  as  an  estimate 
of  the  rent  of  the  land. 

In  computing  the  share  of  interest,  the  rates  have  been  taken  as 
from  six  to  eight  per  cent  of  the  estimated  value  of  existing  capital 
goods.  Since  there  is  no  uniformity  in  the  Census  reports  concern- 
ing the  things  classed  as  capital,  the  estimate  of  the  total  value  of 
capital  goods  is  necessarily  a  very  crude  one. 

The  remainder  of  the  total  product  has  been  entered  under  the 
head  of  profits.  The  author  realizes  that  some  economists  would 
prefer  to  class  monopoly  gains  with  rent  but  it  was  not  feasible  to  do 
so  in  this  case,  even  if  such  a  course  were  desirable. 

To  sum  up,  it  is  believed'that  the  share  of  wages  is  rather  accurately 
set  apart,  that  the  share  of  rent  is  close  enough  to  the  reality  to 
answer  some  of  the  questions  commonly  asked  about  it,  and 
that  the  division  of  the  remainder  of  the  total  'net  product  be- 
tween interest  and  profits,  though  admittedly  very  inaccurate,  yet 
is  as  close  to  the  facts  as  can  easily  be  estimated  from  the  Census 
material  and  indicates  the  truth  in  a  broad  way.  The  general 
estimates  appear  in  Table  XXX  and  the  salient  features  are  brought 
out  by  Fig.  18. 


824 


READINGS   IN  ECONOMIC  HISTORY 
TABLE  XXX 


THE  ESTIMATED  TOTAL  NATIONAL  INCOME  FOR  THE  CONTINENTAL  UNITED 

STATES  DIVIDED  INTO  RENT,  INTEREST,  PROFITS,  AND  RETURNS  TO 

EMPLOYEES 


Amount  in  Millions  of  Dollars  2 

p, 

. 

v^cnsus 
Year 

Total 

Wages  and 
Salaries  3 

Interest 

Rent 

Profits 

Price 
Index  l 

1850 

2,213.8 

792.8 

276.5 

170.6 

973-9 

139.2 

1860 

3,635.6 

1,351.1 

532.6 

321.2 

1,430.7 

141-3 

1870 

6,720.1 

3,269-5 

864.5 

463.2 

2,122.9 

221.6 

1880 

7,390.7 

3,803-6 

1,373-2 

642.3 

i,57i-6 

132.4 

1890 

12,081.6 

6,461.8 

1,738.9 

913-8 

2,967.1 

113.6 

1900 

17,964-5 

8,490.7 

2,695-7 

1,396.0 

5,382.1 

101.7 

1910 

30,529-5 

14,303-6 

5,143-9 

2,673.9 

8,408.1 

126.5 

Purchasing  Power,  Base,  1890-1899 

Year 

Total 

Wages  and 
Salaries 

Interest 

Rent 

Profits 

1850 

1,590-5 

569-6 

198.6 

122.6 

699.7 

1860 

2,572.8 

956.2 

376.9 

227.3 

1,012.4 

1870 

3,032.4 

i,475-3 

390.1 

209.0 

958.o 

1880 

5,582.3 

2,873.0 

1,037-2 

485.1 

1,187.0 

1890 

10,635.5 

5,688.2 

1,530.9 

'    804.4 

2,612.0 

1900 

17,665.9 

8,349.6 

2,650.9 

1,372.9 

5,292.5 

1910 

24,137.0 

11,309.9 

4,066.4 

2,113.8 

6,646.9 

1  Wholesale  prices  for  year  preceding  the  census.     Bulletin  114  of  the  United 
States  Bureau  of  Labor  Statistics,  p.  149. 

2  The  figures  for  wages  and  salaries  are  believed  to  be  fairly  accurate;    those 
for  rent  are  thought  to  have  an  error  of  not  more  than  twenty  per  cent.     The  sepa- 
ration of  the  share  of  capital  from  that  of  the  entrepreneur  is  very  crudely  done 
and  no  stress  should  be  laid  on  the  results.     The  total  for  all  shares  is  thought  to 
be  more  accurate  than  the  mode  of  distribution  and,  for  the  last  three  census 
years,  should  come  within  ten  per  cent  of  the  correct  statement  of  the  national 


ECONOMIC    PROGRESS 

FIGURE  18 


825 


ESTIMATED  DISTRIBUTION  OF  THE  NATIONAL  INCOME  FOR  THE  CONTINENTAL 
UNITED   STATES  AMONG  THE  FACTORS  OF  PRODUCTION 


Interest 


Census  Year 


But,  after  all,  absolute  figures  are  of  but  little  interest  to  most  of 
us.  Fig.  1 8  shows  that  all  the  shares  have  greatly  increased;  but  we 
have  known  that  already.  Which  has  been  gaining  at  the  expense 
of  the  others?  Which  has  been  losing  out  in  the  race?  The  answer 
to  these  questions  is  presented  in  Table  XXXI  and  Fig.  19. 

.  .  .  We  have  observed  that  labor  has  been  fairly  successful  in 
retaining  about  a  half  of  the  total  product,  but  this  tells  us  nothing 
about  the  portion  going  to  each  individual  and  the  last  is  a  question 


income.     For  earlier  years,  the  error  should  not  be  over  twenty  per  cent  at  the 
outside. 

3  Wages  and  salaries  were  independently  estimated,  also,  by  the  method  of 
multiplying  the  estimated  number  employed  by  the  average  wage  received.  The 
variations  for  the  different  years  between  the  respective  results  of  the  different 
methods  are  as  follows:  1850  —  4  per  cent;  1860  —  5  per  cent;  1870 — 5  per 
cent;  1880 — 7  per  cent;  1890 — i  per  cent;  1900 — 2  per  cent,  showing  the 
improving  accuracy  of  recent  figures. 


826 


READINGS  IN  ECONOMIC  HISTORY 


TABLE  XXXI 

THE  ESTIMATED  PERCENTAGES  or  THE  TOTAL  NATIONAL  INCOME  RECEIVED 
RESPECTIVELY  BY  LABOR,  CAPITAL,  LAND,  AND  THE  ENTREPRENEUR 


Shares  of  Product  1 

Year 

Wages  and 
Salaries 

Interest 

Rent 

Profits 

Total 

1850 

35-8 

12.5 

7-7 

44.0 

IOO.O 

1860 

37-2 

14-7 

8,8 

39-3 

IOO.O 

1870 

48.6 

12.9 

6.9 

31-6 

IOO.O 

1880 

51-5 

18.6 

8.7 

21.3 

IOO.I 

1890 

53-5 

14.4 

7.6 

24.6 

IOO.I 

1900 

47-3 

15.0 

7.8 

30.0 

IOO.I 

1910 

46.9 

16.8 

8.8 

27-5 

IOO.O 

1  Computed  from  Table  XXX. 


FIGURE  19 

ESTIMATED  RELATIVE  SHARES  OF  THE  DIFFERENT  FACTORS  OF  PRODUCTION 
IN  THE  NATIONAL  INCOME  FOR  THE  CONTINENTAL  UNITED  STATES 


ECONOMIC    PROGRESS 


827 


of  vastly  more  importance  than  the  study  of  the  share  obtained  by 
labor  en  masse.  Has  the  compensation  for  the  efforts  of  the  average 
laborer  increased  as  fast  as  should  be  the  case  considering  the  tre- 
mendous improvements  in  industrial  processes?  Has  the  entrepreneur 
distanced  the  employee  in  the  race,  constantly  securing  the  lion's 
share  of  the  added  spoils?  Some  light  will  be  thrown  upon  these 
questions  by  reference  to  Table  XXXII. .  .  . 

TABLE  XXXII 

THE  ESTIMATED  RETURNS  FOR  PERSONAL  EFFORTS  IN  THE  CONTINENTAL 

UNITED  STATES 


Census 

Vpar 

Average  money 
wage  per  em- 

Average wage  per 
employee  in  pur- 

Average money 
profits  in  dollars 

Average  profits  per 
entrepreneur  in 

ployee  per  annum 

chasing  power  1 

per  entrepreneur 

purchasing  power  2 

1850 

$204 

$147 

$443 

$318 

1860 

265 

188 

454 

321 

1870 

397 

179 

497 

224 

1880 

323 

244 

281 

212 

1890 

398 

350 

418 

368 

1900 

417 

410 

617 

607 

1910 

S°7 

401 

899 

711 

Throughout  the  half  century,  the  earnings,  measured  in  commodi- 
ties, of  the  average  employee  showed  a  most  gratifying  increase, 
practically  trebling  in  the  five  decades.  Even  the  depression,  caused 
by  the  great  monetary  expansion  and  the  consequent  high  prices  of 
the  Civil  War  period,  was  almost  overcome  by  1869  and,  from  that 
date  on,  each  decade  marked  a  striking  advance. 

III.  How  THE  NATIONAL  WEALTH  is  EXPENDED 

A.   Advance  in  the  Standard  of  Living,  1910  3 

It  is  a  matter  of  common  observation  that  the  standard  of  living  of  modern 
society  has  advanced  far  beyond  that  set  by  our  ancestors  of  fifty  or  a  hundred 
years  ago.  The  way  in  which  the  demand  for  even  the  primary  necessities  of  life, 
as  food,  shelter,  clothing,  education,  and  social  intercourse,  has  been  changed  in 
character  as  a  result  of  higher  standards  of  living,  is  here  analyzed. 

1  Purchasing  power  of  the  money  wage  at  the  prices  of  1890-1899. 

2  Purchasing  power  of  the  money  profits  at  the  prices  of  1890-1899. 

3  Report  of  the  [Massachusetts}  Commission  on  the  Cost  of  Living.     (Boston, 
1910),  494-496. 


828  READINGS  IN  ECONOMIC  HISTORY 

The  general  advance  of  the  standard  of  living  throughout  all  the 
ranks  of  the  population,  from  the  highest  to  the  lowest,  is  manifestly 
one  of  the  most  potent  causes  of  the  increase  of  the  demand  for  com- 
modities, and  consequently  of  the  advance  of  prices.  On  every  side 
the  wants  of  the  people  have  been  multiplied  and  diversified.  They 
demand  more  and  better  things.  Their  requirements  are  larger, 
more  varied  and  more  exacting.  The  growth  of  the  cities,  the  cult  of 
fashion,  the  increase  of  leisure  and  numberless  factors  have  combined 
to  bring  about  this  advance  of  living  standards.  In  itself,  the  im- 
provement of  the  standard  of  living  is  a  sign  of  cultural  progress,  to 
be  welcomed  and  encouraged.  Rational  extension  and  diversifica- 
tion of  consumption  is  highly  desirable.  When,  however,  the  change 
proceeds  so  rapidly  as  during  the  last  decade,  it  accelerates  greatly 
the  upward  movement  of  prices.  The  resulting  increase  of  the  cost 
of  living  is  likely  under  these  circumstances  to  produce  a  reactionary 
effect  on  the  standard  of  living,  causing  the  consumers  to  curtail 
expenditures,  and  thus  to  abandon  the  gains  that  have  been  briefly 
won.  In  short,  the  advance  of  the  standard  of  living,  if  not  rationally 
guided  and  safeguarded,  threatens  to  bring  about  a  later  decline  of 
the  standard  to  a  lower  level. 

The  various  factors  entering  into  the  advance  of  the  standard  of 
living  have  been  admirably  analyzed  by  Marcus  M.  Marks.  He  points 
out  the  extension  of  the  consumer's  requirements  with  reference  to 
the  five  necessities  of  civilized  existence,  —  food,  shelter,  clothing, 
education  and  society,  —  as  follows: 

1 .  Food.  —  Finer  and  more  varied  food  than  heretofore  is  now 
generally  demanded  by  the  workingman,  on  account  of  an  educated 
taste,  and  also,  perhaps,  because  of  the  more  general  publicity  as 
to  what  is  consumed  by  the  other  classes.     The  result  is  an  increased 
demand,  which  advances  prices. 

2.  Shelter.  —  The  standards  of  home  conditions  as  to  sanitation, 
light,  air  and  comfort  have  steadily  advanced,  until,  as  a  result,  more, 
larger  and  costlier  buildings  are  required  to  house  the  same  number 
of  people,  with  a  corresponding  increase  in  rent.     This  creates  a  larger 
demand  for  building  materials  and  labor. 

3.  Clothing.  —  In  former  days  garments  were  often  worn  until 
the  color  changed  and  the  cloth  became  threadbare;   nowadays  the 
workingman  discards  clothing  long  before  these  conditions  appear. 
Style  has  become  more  imperious  and  fashions  more  fickle.     As  is 
the  case  in  the  improvement  of  homes,  so,  naturally,  the  larger  demand 
for  clothing  vastly  increases  the  demand  for  materials  and  labor. 


ECONOMIC    PROGRESS  829 

The  resulting  scarcity  of  wool,  for  example,  has  greatly  advanced  its 
market  price. 

4.  Education.  —  The  present  broader  and  more  general  education, 
even  though   free  from  direct  expense  to    the  workingman,  adds  to 
his  cost  of  living  by  refining  his  tastes  and  increasing  his  desires. 
For  example,  the  purchase  of  a  morning  paper  is  now  his  regular 
habit;    an   evening   paper  almost   equally  so;    popular  books   and 
magazines  are  included  in  the  necessities  of  life;    furthermore,  life 
insurance  premiums  and  many  other  expenses  incident  to  present- 
day  enlightenment  are  added  to  the  cost  of  the  workingman's  living. 

5.  Society.  —  Finally,   the  desire  for  social  intercourse,   greater 
in  this  day  of  general  co-operation  and  interdependence  than  ever 
before,  again  adds  to  the  list  of  necessary  expenses;   there  are  many 
outlays  incident  to  going  about  and  mingling  with  one's  fellows  which 
need  not  be  here  detailed,  but  must  be  added  to  the  cost  of  what  is 
now  included  in  true  living.  .  .  . 

B.   How  Much  is  Enough?     igoj  l 

Thus  far  the  questions  to  which  answers  have  been  given  are  questions  of  fact: 
What  is  the  national  income  and  how  is  it  distributed  among  the  different  factors 
of  production?  Here  a  question  is  raised  as  to  what  ought  to  be.  What  is  a  fair 
living  wage  for  the  workers  in  our  factories  and  mercantile  establishments?  Do 
actual  wages  come  up  to  this  ideal  standard?  Numerous  studies  have  been  made 
of  the  cost  of  living  as  shown  in  workingmen's  budgets  in  an  effort  to  discover 
the  necessary  minimum  for  a  thrifty  and  self-respecting  family.  The  following 
extract  is  taken  from  a  careful  study  of  this  kind. 

What,  then,  is  a  "fair  living  wage"  for  an  average  family?  A 
number  of  careful  estimates  have  been  made  in  answer  to  this 
question.  The  Massachusetts  Bureau  of  Statistics  puts  it  at  $724. 
a  year  for  a  family  of  five;  the  New  York  Bureau  of  Labor  at 
$520.;  Mr.  John  Mitchell,  President  of  the  United  Mine  Workers  of 
America,  at  $600.;  Mr.  Robert  Hunter,  author  of  "Poverty,"  says 
$460.  (for  actual  and  necessary  expenses);  and  Dr.  Edward  T. 
Devine,  Secretary  of  the  Charity  Organization  Society  of  New 
York  City,  estimates  $600.  as  a  minimum.  These  estimates  were 
all  made  at  periods  of  lower  prices  and  cost  of  living  than  the 
present  (1906). 

A  "fair  living  wage"  should  be   large  enough  not  only  to  cover 
expenses   which   Mr.    Rowntree    calls    "necessary    for   maintaining 

1  Wage-earners'  Budgets.  By  Louise  B.  More  (New  York,  1907),  268-270. 
Printed  with  the  permission  of  the  author  and  of  the  publisher,  Henry  Holt  and 
Company. 


830  READINGS  IN  ECONOMIC  HISTORY 

merely  physical  efficiency,"  but  it  should  allow  for  some  recreation 
and  a  few  pleasures,  for  sickness,  short  periods  of  unemployment, 
and  some  provision  for  the  future  in  the  form  of  savings,  insurance, 
or  membership  in  benefit  societies. 

The  whole  question  of  a  fair  wage  depends  primarily  on  the  amount 
and  cost  of  food  necessary  for  proper  nutrition.  If  a  man  is  underfed, 
he  must  underwork,  as  Mr.  Rowntree  says;  his  children  are  stunted 
in  growth  and  intellect,  and  when  a  man  is  unfit  for  work  he  fails  to 
get  it  or  works  for  the  lowest  wages.  Mr.  Rowntree  adds:  "The 
most  hopeless  condition  of  the  poor,  as  every  social  worker  knows, 
is  unfitness  for  work.  Unfitness  for  work  means  low  wages,  low  wages 
mean  insufficient  food,  insufficient  food  means  unfitness  for  labor, 
and  so  the  vicious  circle  is  complete."  l 

This  investigation  has  shown  that  a  well-nourished  family  of  five 
in  a  city  neighborhood  needed  at  least  $6.  a  week  for  food.  The  aver- 
age for  39  families,  having  five  in  a  family,  was;  $327.24  a  year  for 
food.  If  we  consider  $6.  a  week  (or  $312.  a  year)  as  43.4  per  cent  of 
the  total  expenditure  (which  was  the  average  percentage  expended 
for  food  in  these  200  families,  and  very  near  the  average  for  the  work- 
ingmen's  families  in  the  extensive  investigation  of  the  Department 
of  Labor),  the  total  expenditures  would  be  about  $720.  a  year.  It 
therefore  seems  a  conservative  conclusion  to  draw  from  this  study 
that  a  "fair  living  wage"  for  a  workingman's  family  of  average  size 
in  New  York  City  should  be  at  least  $728.  a  year,  or  a  steady  income 
of  $14.  a  week.  Making  allowance  for  a  larger  proportion  of  surplus 
than  was  found  in  these  families,  which  is  necessary  to  provide  ade- 
quately for  the  future,  the  income  should  be  somewhat  larger  than 
this  —  that  is,  from  $800.  to  $900.  a  year. 

In  conclusion,  the  fact  that  the  "plane"  or  condition  of  living 
which  is  sometimes  forced  upon  a  family  by  stress  of  economic  cir- 
cumstances does  not  necessarily  reflect  the  standard  of  living  of  that 
family,  should  be  emphasized.  The  "standard  of  living"  is  a  relative 
phrase,  depending  not  only  upon .  the  amount  of  income,  price  of 
commodities,  rent,  and  other  facts,  but  also  upon  the  attitude  of  each 
family  toward  life.  This  standard  also  varies  greatly  according  to 
extravagance  or  thrift,  wasteful  expenditures  or  intelligent  house- 
hold economy.  From  an  economic  standpoint,  however,  the  amount 
of  income  is  the  most  important  factor  in  determining  the  standard 
of  comfort  attainable  in  an  average  workingman's  family. 


1  Rowntree,  "Poverty,"  p.  46. 


ECONOMIC    PROGRESS  831 

C.    The  Needs  of  a  Self-supporting  Woman,  1914  l 

The  results  of  a  careful  investigation  by  the  Minimum  Wage  Commission  of 
Massachusetts  are  presented  briefly  in  the  following  extract.  According  to  their 
findings  the  lowest  wage  upon  which  a  normal  self-supporting  woman  could  live 
in  Boston  was  $8.00  a  week,  a  sum  which  was  greater  than  that  actually  earned 
by  many  workers  in  the  brush  industry.  This  conclusion  is  a  partial  answer  to 
the  question  raised  in  the  preceding  extract  as  to  how  much  is  enough. 

A  summary  of  the  findings  of  the  commission  for  the  brush  industry 
is  given  in  the  first  annual  report  of  the  commission,  published  in 
January,  1914.  As  stated  in  this  report,  it  was  found  that  almost 
exactly  two-thirds  of  the  brush  workers  for  whom  wage  records  were 
available  received  an  average  of  less  than  $6  a  week.  At  the  conclu- 
sion of  this  study  of  the  brush  industry,  the  commission  was  convinced 
that  the  wages  paid  to  a'  substantial  number  of  the  female  employees 
in  that  industry  were  inadequate  to  supply  the  necessary  cost  of  living 
and  maintain  the  worker  in  health,  and  a  wage  board  for  that  industry 
was  therefore  established.  .  .  .  With  regard  to  the  needs  of  the  em- 
ployees, the  following  statements  are  made  in  the  report  of  the  Brush 
Makers'  Wage  Board  to  the  Minimum  Wage  Commission,  March 
17,  1914,  as  summarized  in  Bulletin  Xo.  3  of  the  commission: 

Lodging  at  the  lowest  level  of  decency  cannot  be  found  in  Boston 
for  less  than  $1.50  per  week.  A  minimum  cost  for  food  is  at  least 
$3  a  week.  If  one  has  the  courage  to  go  little  beyond  keeping  warm 
and  dry,  it  cannot  be  done  for  less  than  $45  a  year,  or  87  cents  a  week. 
For  the  preservation  of  health,  average  expenditures  of  $8.75  per 
year,  or  17  cents  a  week,  seem  an  irreducible  minimum.  Car  fare 
requires  at  least  60  cents  a  week.  The  total  budget  so  built  up  is: 

Per  week 

Lodging $1.5° 

Food 3-oo 

Clothing -87 

Car  fare -6° 

Other -i? 

Total $6.14 

This  figure  assumes  ideal  conditions,  and  is  purely  theoretical. 
It  allows  nothing  for  laundry,  for  reading  other  than  in  public  libra- 
ries, for  recreation,  for  church,  for  savings  or  for  insurance  of  any  kind. 

At  least  these  items  must  be  added: 


1  Second  Annual  Report  of  the  Minimum  Wage  Commission  of  Massachusetts 
(Boston,  1915),  8-9. 


832  READINGS  IN  ECONOMIC  HISTORY 

Per  week 

Laundry $0.20 

Church .10 

Newspapers  (Sunday  and  every  other  day) ...  .08 

Vacation  (one  week  per  year  at  $10) .19 

Picture  show  (once  in  two  weeks) .05 

Theatre  (once  in  two  months  at  25  cents).  ...  .04 

Clothing  (an  addition  of  $25  per  year) .48 

Food .50 

Lodging  and  extras .50 


Total $2.14 

The  lowest  total  for  human  conditions  for  an  individual  in  Boston 
is  thus  seen  to  be  $8.28.  This  amount  is  lower  than  that  of  $8.71 
tentatively  arrived  at  by  the  board  early  in  its  proceedings.  It  makes 
no  allowance  for  savings  or  insurance,  and  is  not  therefore  a  true 
living  wage.  Allowing  for  variations  between  individuals,  the  wage 
board  is  convinced  that  the  sum  required  to  keep  alive  and  in  health 
a  completely  self-supporting  woman  in  Boston  is  in  no  case  less  than 
$8,  and  in  many  cases  may  rise  to  $9  or  more. 

D.   Making  Ends  Meet,  ipoj  * 

Two  investigations  have  been  made  by  the  United  States  Commissioner  of 
Labor  into  the  cost  of  living,  the  first  in  1891  and  a  second  more  comprehensive 
one  in  1903.  From  the  second  of  these  is  given  a  short  extract  showing  the  extent 
to  which  wage-earners  were  able  to  adjust  their  expenditures  to  their  incomes, 
and  how  they  disposed  of  the  surplus  or  met  the  deficit  at  the  end  of  the  year.  As 
these  conclusions  were  based  upon  a  study  of  25,440  families  living  in  33  states, 
they  may  be  regarded  as  fairly  representative  of  American  conditions.  This  in- 
vestigation is  probably  the  most  comprehensive  of  its  kind  ever  made.  With  this 
reading  should  be  compared  extracts  H  and  I  of  Part  III  of  the  previous  chapter. 

.  .  .  The  total  income  per  family  for  the  25,440  families  covered 
by  this  inquiry  was  $749.50.  .  .  . 

The  total  expenditure  per  family  for  all  purposes  was  $699. 24.  .  .  . 

The  average  income  for  the  year  of  the  25,440  families  exceeded 
their  average  expenditure  by  $50.26.  This  does  not  take  into  con- 
sideration payments  made  during  the  year  on  the  principal  of  mort- 
gages upon  homes,  which,  if  distributed  among  all  families  would  show 
an  increase  in  average  savings  of  about  $7.  ... 

A  surplus  at  the  end  of  the  year  was  reported  by  12,816  families 
or  about  one-half  of  the  whole  number  of  families.  The  average 

1  Eighteenth  Annual  Report  of  the  Commissioner  of  Labor.  (Washington, 
1904),  57,  60-1,  89. 


ECONOMIC    PROGRESS  833 

surplus  for  these  families  was  8120.84.  A  deficit  was  reported  by 
4,117  families,  the  average  deficit  for  these  families  being  $65.58. 
Of  the  total  there  remained  8,507  families,  and  these  reported  that 
they  came  out  even  at  the  end  of  the  year;  that  is,  that  as  nearly  as 
they  could  account  for  their  income  and  expenditure,  they  had  used 
up  all  they  had  earned  or  otherwise  obtained  during  the  year.  This 
report  does  not  pretend  to  show  the  assets  and  liabilities  of  the  fam- 
ilies at  the  end  of  the  year.  Probably  few  families  would  show  a 
balance  sheet  exactly  like  that  of  the  preceding  year.  Presumably 
many  of  these  families  went  forward  or  backward  at  least  a  little  in 
their  assets;  they  most  likely  had  more  or  less  of  furniture,  clothing, 
fuel,  and  food  on  hand  than  at  the  close  of  the  preceding  year. 

The  largest  precentage  of  families  having  a  surplus  was  in  the 
State  of  Washington,  where  90.50  per  cent  reported  a  surplus.  Except 
in  the  States  of  Kentucky,  Maryland,  and  Tennessee  there  were  more 
families  reporting  a  surplus  than  families  reporting  a  deficit.  .  .  . 

Of  the  total  2,567  families  which  reported  their  income  and  expendi- 
ture in  detail,  1,480  families  had  a  surplus,  507  families  had  a  deficit, 
and  580  families  reported  that  they  came  out  even  at  the  end  of  the 
year  —  that  is,  their  expenditure  equalled  their  income. 

Of  the  families  reporting  a  surplus,  491  had  the  surplus  on  hand  in 
cash,  682  had  deposited  the  surplus  in  bank,  63  had  placed  it  in  build- 
ing associations,  42  had  invested  it  in  real  estate,  5  had  invested  it 
in  shares  of  stock,  3  had  loaned  it,  60  had  paid  preexisting  debts  with 
it,  i  had  disposed  of  it  in  some  other  way,  and  133  made  no  report  as 
to  what  they  had  done  with  the  surplus.  Many  of  the  families  that 
had  put  money  into  bank  or  had  invested  it  in  some  way  also  had 
more  or  less  cash  left  on  hand.  .  .  .  Seventy-nine  of  the  1,480 
families  which  reported  a  surplus  had  also  made  payments  on  the 
principal  of  the  incumbrance  on  the  home. 

Of  the  507  families  which  reported  a  deficit  for  the  year,  244  had 
•met  the  deficit  by  obtaining  credit,  94  had  drawn  on  former  savings, 
i  had  mortgaged  real  estate,  2  had  mortgaged  furniture,  i  had  sold 
real  estate,  13  had  borrowed  money,  2  had  met  the  deficit  in  other 
ways,  and  150  made  no  report  as  to  the  method  of  meeting  the  deficit. 
Nineteen  of  the  families  which  reported  a  deficit  for  the  year  had  made 
payments  on  the  principal  of  the  incumbrance  on  the  home. 

Of  the  580  families  which  used  up  their  whole  income  during  the 
year,  22  had  in  reality  saved  some  money  by  making  a  payment  on 
the  debt  on  the  home. 


834  READINGS  IN  ECONOMIC  HISTORY 


E.   Extravagance  and  Waste, 

The  existence  of  a  deficit  in  the  wage-earner's  budget  may  be  due  to  the  in- 
sufficiency of  his  income,  but  it  may  also  be  due  to  unwise  expenditure  or  to  down- 
right waste.  Some  of  the  principal  items  in  which  individual  extravagance  or 
waste  may  take  place  are  described  in  the  following  extract.  This  is  the  dark  side 
of  the  picture. 

INDIVIDUAL   WASTAGE 

A .   Drink 

It  has  long  been  known  that  the  excessive  use  of  alcoholic  liquor 
is  a  menace  to  the  happiness  and  an  injury  to  the  welfare  of  those 
peoples  among  whom  it  is  prevalent,  but  not  until  the  science  of  sta- 
tistics was  applied  to  the  problem  was  the  magnitude  of  its  economic 
importance  appreciated.  Of  late  we  have  come  to  know  that  by 
sapping  vitality,  by  bringing  accident,  disease  and  death,  it  causes 
economic  waste  of  enormous  proportions.  .«  .  . 

The  economic  effect  of  all  this  shows  itself  in  two  directions:  first, 
in  the  expense  entailed  on  the  community  in  costs  of  government 
and  charity;  and  second,  in  the  injury  to  the  productive  efficiency 
of  the  community.  .  .  . 

The  use  of  alcoholic  beverages  in  this  country  has  rapidly  increased. 
That  of  distilled  spirits  remains  about  stationary,  the  average  retained 
here  for  consumption  having  been  1.45  gallons  per  capita  in  the  years 
1871-78,  and  the  same  in  the  years  1901-08;  but  the  average  for  malt 
liquors  in  the  same  periods  rose  from  6.72  gallons  a  year  to  18.88 
gallons.  In  1908  it  was  20.97  gallons. 

Observation  leads  us  to  believe  that  there  has  been  in  Massachu- 
setts a  material  diminution  of  public  drinking  by  the  well-to-do  in 
the  last  generation,  with  less  use  of  wine  at  banquets,  of  punch  at 
college  reunions,  less  resort  by  business  men  to  public  bars,  less  con- 
sumption of  hard  liquors  in  clubs.  But  the  statistics  indicate  that 
there  must  have  been  great  increase  in  the  use  of  malt  liquors  in  homes, 
and  of  resort  to  saloons  by  wage  earners. 

With  the  spread  of  education  and  the  general  progress  of  society, 
there  ought  to  be  a  lessening  of  the  evils  produced  from  such  a  cause 
as  this.  We  are  not  of  the  belief  that  the  primary  cure  is  to  be  found 
in  legislation.  Men  cannot  be  made  good  by  law.  The  most  im- 
portant thing  is  to  elevate  the  standards  of  the  community,  for  its 


1  Report  of  the  Massachusetts  Commission  on  the  Cost  of  Living.     (Boston,  1910), 
23Q-SI- 


ECONOMIC    PROGRESS 


835 


moral  sense  is  the  most  powerful  of  all  agencies.     But  the  strong  arm 
of  the  law  often  has  to  be  called  upon  to  enforce  the  common  will.  .  . 

Per  Capita  Consumption  of  Alcoholic  Beverages  in  the  United  States 


Year 

Wines 
(gallons) 

Malt 
Liquors 

(gallons) 

Spirits 
(Proof 
gallons) 

Total 
wines,  malt 
liquors 
and  spirits 
(gallons) 

1840.  . 

.20 

i  36 

i8<;o.  . 

.27 

I  ;S 

223 

4  08 

1860  

•35 

3  22 

2  86 

1870.  . 

.32 

^  31 

1880  

06 

8  ?6 

I   27 

1800.  . 

.46 

13.67 

I  4O 

ICC? 

IQOO.  . 

,7Q 

16.02 

I   28 

17  60 

1008.  . 

.60 

20.97 

1.44. 

23  OI 

Per  Capita  Consumption  of  Alcoholic  Beverages  in  other  Countries,  1902 


Countries 

Wines 
(gallons) 

Beer 

(gallons) 

Spirits 
(gallons) 

France  

24.00 

4.80 

1.43 

German  Empire   .  .                  

1.14 

25.50 

1.85 

Italy. 

27.00 

.16 

1.27 

Australian  Commonwealth  

i.  ii 

12.40 

.  .85 

United  Kingdom  

•36 

30.30 

1.05 

Canada  

.09 

5.10 

.80 

B.   Luxury 

The  recent  period  of  rising  prices  has  been  marked  by  a  tendency 
toward  extravagance  among  all  classes,  never  before  shown  in  this 
country.  .  .  . 

In  the  twelve  years  since  the  use  of  self-propelled  road  vehicles 
became  mechanically  perfected  and  commercially  profitable,  it  is 
estimated  that  a  million  automobiles  have  been  produced,  and  sold 
for  more  than  a  billion  and  a  half  dollars.  In  this  production  France, 
until  1907,  led  the  world,  when  it  was  passed  by  the  United  States, 


836  READINGS  IN  ECONOMIC  HISTORY 

which  is  now  in  the  lead.  The  production  of  automobiles  in  the 
United  States  this  year  will  easily  approximate  $250,000,000.  The 
great  bulk  of  this  output  represents  pure  luxury  production,  which  has 
taken  at  least  100,000  workers  out  of  employments  in  which  they  were 
producing  commodities  that  were  useful  and  of  benefit  to  all  the  people, 
into  an  occupation  in  which  the  product  may  be  termed  an  economic 
waste.  .  .  . 

The  progress  of  civilization  has  demonstrated  that  the  luxuries 
of  to-day  are  considered  the  necessities  of  to-morrow.  The  production 
of  automobiles  for  commercially  economical  and  purely  pleasurable 
purposes  is  not  likely  to  diminish,  but  rather  to  increase.  Yet  it 
must  be  said  that  the  present  tendency  toward  luxury  production 
entails  a  penalty  that  must  be  paid  by  the  whole  community  in  an 
advance  of  the  prices  of  the  necessary  things  of  life.  Three  hundred 
years  ago  an  English  writer  said  that  such  luxury  "hath  honey  in 
her  mouth,  gall  in  her  heart,  and  a  sting  in  her  tail ";  and  in  this  age 
the  tendency  toward  universal  extravagance,  pleasant  as  its  ap- 
proaches are,  and  greatly  as  it  throws  its  gilded  charms  on  the  world, 
may  enslave  men  more  than  the  most  active  vices. 

C.   Amusement 

In  considering  the  subject  of  amusement,  among  the  many  phases 
of  social  and  individual  waste,  the  character  and  value  of  amusement 
as  an  aid  to  individual  and  economic  efficiency  must  be  reckoned  with 
and  estimated.  .  .  . 

...  To  put  the  matter  in  the  proverbial  phraseology  of  the  race, 
which  expresses  a  homely  wisdom  gathered  in  the  experience  of  the 
ages,  "All  work  and  no  play  make  Jack  a  dull  boy."  Relaxation 
from  labor  is  not  in  itself  enough  to  compensate  man  for  the  physical 
exhaustion  and  waste  incident  to  daily  work.  The  mere  resting  of 
muscle  and  brain  must  be  supplemented  by  some  form  of  amusement, 
some  pleasure,  which  makes  the  worker  forget  the  sweat  and  fret  of 
the  day,  and  carries  him  into  imaginary  regions  and  conditions  where 
labor  and  its  exhaustion  are  forgotten.  .  .  . 

The  increase  in  the  number  of  theaters  and  show  houses  from  75 
in  1900  to  242  in  1910  indicates  a  growth  vastly  out  of  proportion  to 
the  growth  of  population  in  this  Commonwealth,  and  a  tendency  to 
extravagance.  ...  In  1910  we  find  only  50  theaters  and  houses 
devoted  to  drama  and  vaudeville,  while  192  are  given  over  to  "moving 
pictures-"  and  cheaper  forms  of  vaudeville.  .  .  . 

It  should  be  observed,  furthermore,  that  the  increase  in  the  number 


ECONOMIC    PROGRESS  837 

of  "motion-picture"  houses  is  largely  in  cities  and  towns  devoted 
to  factory  industries,  and  they  furnish  amusement  to  classes  of  workers 
whose  means  debar  them  from  theaters  of  the  higher  class,  except  on 
rare  occasions.  It  is  worthy  of  note  that  wherever  the  "motion- 
picture"  houses  are  opened,  the  patronage  of  the  liquor  saloons  in 
the  neighborhood  shows  a  falling  off;  ...  But,  when  all  possible 
allowance  has  been  made  on  these  grounds,  it  is  clear  that  the  enormous 
increase  of  the  number  of  theaters  and  amusement  places  and  of  the 
attendance  during  recent  years  marks  an  abnormal  development  of 
the  appetite  for  amusements,  and  represents  a  considerable  squander- 
ing of  income.  .  .  . 

It  is  impossible  to  estimate  the  amount  wasted  on  amusements; 
the  line  between  economic  and  uneconomic  expenditure  on  this  score 
is  so  vague  that  a  curve  of  waste  cannot  be  plotted.  .  .  .  That  a 
deal  of  waste  is  now  taking  place  in  the  form  of  excessive  and  de- 
moralizing expenditure  for  amusements  we  believe,  however,  to  be 
a  fact  patent  to  any  impartial  observer.  This  waste  is  twofold.  It 
involves  the  unprofitable  spending  of  money  which  might  otherwise 
have  been  devoted  to  forms  of  consumption  that  would  heighten 
efficiency,  or  to  assistance  in  the  production  of  useful  commodities, 
and  it  diminishes  the  industrial  efficiency  and  consequently  the  out- 
put of  the  working  population.  .  .  . 

D.   Domestic  Waste 

Domestic  waste  may  be  either  destruction  without  profitable 
result,  or  misuse,  the  latter  taking  the  form  of  extravagance.  Families 
with  incomes  below  $800  a  year  waste  very  little  food  material.  They 
may  suffer  from  illness  due  to  poor  food,  and  thus  waste  income. 
United  States  government  investigations  show  waste  of  edible  material 
amounting  to  not  more  than  3  or  4  per  cent,  in  this  class.  In  the  case 
of  families  with  incomes  between  $1,000  and  $3,000  a  year,  all  inves- 
tigations show  frequent  wastes  of  10  to  25  per  cent,  of  foods  purchased, 
and  extravagance  in  buying  to  an  equal  amount.  Such  families  spend 
from  $300  to  $800  a  year  for  food.  If  20,000  families  in  Boston  spend 
needlessly  and  to  their  own  detriment  $200  a  year,  the  sum  of 
$4,000,000  annually  is  involved,  besides  the  cost  of  caring  for  gar- 
bage and  loss  through  illness. 

Food  waste  occurs  in  three  principal  ways: 

i.  Waste  in  marketing,  including  purchase  of  inedible  material, 
purchase  in  small  quantities,  purchase  for  flavor  and  tenderness 
instead  of  nutrition,  and  sheer  extravagance. 


838 


READINGS  IN  ECONOMIC  HISTORY 


2.  Waste   in   preparation,    including   preparation   of   too   large 
quantity  for  the  meal  or  day,  food  made  inedible  by  poor  cooking, 
and  food  unwholesome  by  wrong  cooking. 

3.  Waste  in  supplies  and  cooked  food,  including  garbage  pure  and 
simple,  and  loss  in  moving  and  closing  the  house  for  the  summer, 
when  whole  packages  are  thrown  away,  etc. 


IV.  SAVING  AND  THRIFT 

A.   Savings  in  the  United  States, 

The  greatest  channel  for  saving  is  undoubtedly  the  banks,  and  hi  the  following 
extract  figures  are  given  of  the  total  deposits  in  all  banks,  and  in  those  which  are 
especially  used  by  the  wage-earners.  The  statistics  of  the  savings  banks  are  par- 
ticularly encouraging  as  giving  evidence  of  a  growing  spirit  of  thrift  as  well  as  of 
the  existence  of  a  disposable  surplus.  This  is  the  bright  side  of  the  picture. 

NUMBER  OF  BANKS  AND  OF  DEPOSITS  OF  STATE,  SAVINGS,  AND  PRIVATE 
BANKS,  LOAN  AND  TRUST  COMPANIES,  AND  NATIONAL  BANKS,  FROM 

1863  TO  1913 

[Amounts  in  millions  of  dollar s~\ 


Year 

Number  of  banks 
reporting 

Individual  deposits 

1863 

1,466 

$393-7 

1865 

1,960 

641.0 

1870 

2,457 

1,051-3 

1875 

3,336 

1,787.0 

1880 

3,355 

1,951.6 

1885 

4,350 

2,734-3 

1890 

7,999 

4,062.5 

1895 

9,818 

4,921-3 

1900 

10,382 

7,238-9 

1905 

16,410 

n,35o.7 

1910 

23,095 

15,283.4 

1913 

25_,993 

17,475-7 

SAVINGS    DEPOSITS    IN    ALL    BANKS 


Savings  deposits  are  supposed  to  represent  chiefly  the  accumula- 
tions of  wage  earners  and  other  people  of  moderate  means,  and  by 
reason  of  this  fact  statistics  relating  to  such  deposits  are  of  special 


1  Annual  Report  of  the  Comptroller  of  the  Currency.     (Washington,   1914), 
43-77,  passim. 


ECONOMIC    PROGRESS 


839 


interest.  Savings  deposits  in  all  banks  of  the  country  increased  from 
$6,496,192,707  in  June,  1912,  to  $6,972,069,227  in  June  last,  the  in- 
crease during  the  year  being  8475,876,520,  or  over  7  per  cent.  The 
aggregate  deposits  in  all  banks  on  June  4,  1913,  roundly  stated,  were 
$17,475,700,000;  of  this  amount  86,972,000,000,  as  stated,  was  savings 
deposits,  exclusive  of  $211,445,687  held  by  savings  banks  subject 
to  check  without  notice.  Statistics  showing  the  number  of  savings 
depositors  in  all  banks  for  the  current  year  are  not  available,  but 
the  information  obtained  upon  this  subject  in  1911  showed  that  there 
were  on  June  7  of  that  year  over  17,600,000  savings  accounts  on 
the  books  of  the  various  banks  of  the  country.  .  .  . 


Year 

Number 
of  banks 

Number  of 
depositors 

Deposits 

Average 
due  each 
depositor 

Average  per 
capita  in  the 
United  States 

1820 

10 

8,635 

$1,138,576 

$131.86 

$    .12 

1825 

15 

16,931 

2,537,o82 

149.84 

1830 

36 

38,035 

6,973,304 

183.09 

•54 

1835 

52 

60,058 

10,613,726 

176.72 

1840 

61 

78,701 

14,051,520 

178.54 

.82 

1845 

70 

145,206 

24,506,677 

168.77 

1850 

108 

25i,354 

43,431,130 

172.78 

1.87 

1855 

215 

431,602 

'  84,290,076 

I95-29 

1860 

278 

693,870            149,277.504 

215-13 

4-75 

1865 

3i7 

980,844            242,619,382 

247-35 

1870 

5i7 

1,630,846            549,874,358 

337-17 

14.26 

1875 

771 

2,359,864           924,037,304 

39I-56 

1880 

629 

2,335,582            819,106,973 

350./I 

16.33 

1885 

646 

3,071,495         1,095,172,147 

356-56 

1890 

921 

4,258,893       ;    1,524,844,506 

358.03 

24-35 

1895 

1,017 

4,875,519 

1,810,597,023 

37L36 

25-88 

1900 

1,002 

6,107,083 

2,449,547,88s 

401.10 

3I-78 

1905 

1,237 

7,696,229 

3,261,236,119 

423-74 

39-17 

1910 

i,759 

9,142,908 

4,070,486,246 

445-20 

45-05 

1913 

1,978 

10,766,936 

4,727,403,950 

439-07 

48-56 

BUILDING  AND   LOAN  ASSOCIATIONS   IN  THE   UNITED   STATES 

Statistics  relating  to  the  building  and  loan  associations  in  the 
United  States  for  the  year  1912  have  been  obtained  through  the 
courtesy  of  Mr.  H.  F.  Cellarius,  secretary  of  the  United  States  League 
of  Local  Building  and  Loan  Associations. 

There  were  in  1912  in  the  United  States  6,273  associations,  with 


840 


READIN.GS  IN  ECONOMIC  HISTORY 


a  total  membership  of  2,516,936,  and  having  assets  amounting  to 
$1,137,600,648.  The  total  resources  increased  $106,913,627,  or  a 
little  over  10  per  cent  for  the  year,  and  the  membership  increased 
184,107,  or  a  little  less  than  8  per  cent.,  during  the  same  period.  The 
average  amount  due  each  member  is  $451.98,  an  increase  of  $10.17 
per  member  for  the  year.  .  .  . 

SCHOOL   SAVINGS   BANKS 

Through  the  courtesy  of  Mrs.  S.  L.  Oberholtzer,  who  has  under- 
taken the  work  of  collecting  statistics  relating  to  this  class  of  banks, 
the  Comptroller  is  enabled  to  present  the  latest  statistical  data 
showing  the  growth  of  the  school  savings  bank  system  in  this  country. 
Much  interest  is  now  being  manifested  in  this  method  of  accumu- 
lating small  savings,  and  recently  the  American  Bankers'  Association 
provided  for  a  school  savings  section,  in  charge  of  a  capable  secretary, 
for  the  purpose  of  studying  the  growth  of  this  movement  and  compiling 
statistics  relating  thereto. 

From  reports  received  and  compiled  it  appears  that  there  are 
about  1,200  schools  in  201  cities  and  towns  having  school  savings 
banks.  The  pupils  registered  at  these  schools  number  1,492,789, 
and  the  number  of  pupils  with  savings  accounts  are  210,320.  The 
total  amount  deposited  was  $4,305,018.83,  withdrawn  $3,143,551.22, 
the  balance  on  deposit  being  $1,161,467.61.  .  .  . 

POSTAL  SAVINGS  BANKS 


Number 
of  offices 
and  branches 

Number  of 
depositors 

Deposits 

Average 
deposit 
account 

Average 
deposit  per 
inhabitant 

12,820 

33°,7°3 

$33,818,870 

$102.26 

$0.35 

B.  Building  and  Loan  Associations,  1893  l 

A  characteristic  and  important  savings  and  investment  institution  in  the 
United  States  is  the  building  and  loan  association,  whose  purpose  is  to  assist  the 
person  of  small  means  to  acquire  a  home  by  loaning  him  the  necessary  capital  on 
the  security  of  a  mortgage  on  the  property.  The  following  extract  shows  something 
of  the  financial  and  social  importance  of  these  associations. 


1  Ninth  Annual  Report  of  the  Commissioner  of  Labor.     (Washington,  1894),  n, 
I3-I5- 


ECONOMIC    PROGRESS  841 

Building  and  loan  associations  have  existed  in  this  country  since 
about  1840,  although  the  first  organization  of  the  kind  of  which  there 
is  any  record  was  organized  at  Frankford,  a  suburb  of  Philadelphia, 
January  3,  1831,  under  the  title  of  the  Oxford  Provident  Building 
Association;  but  the  decade  from  1840  to  1850  can  be  considered  as 
being  the  real  period  for  the  permanent  inception  of  such  asso- 
ciations. .  .  . 

The  growth  of  these  associations  in  the  United  States  has  been 
very  rapid  since  1840,  and  their  accumulated  assets  have  increased 
to  an  enormous  amount.  These  private  corporations,  doing  a  semi- 
banking  business,  conducted  by  men  not  trained  as  bankers,  offer  a 
study  in  finance  not  equalled  by  any  other  institutions.  England, 
France,  and  some  other  countries  have  kindred  institutions,  but 
nowhere  have  they  grown  to  such  vast  proportions  as  in  the  United 
States. 

The  investigation,  the  results  of  which  are  now  under  considera- 
tion, comprehends  practically  all  building  and  loan  associations  in 
the  United  States.  An  effort  was  made  to  secure  the  facts  for  these 
associations  as  they  existed  at  the  end  of  their  respective  fiscal  years 
nearest  to  January  i,  1893.  .  .  . 

The  number  of  associations  considered  in  the  preparation  of  the 
tabular  statements  in  this  report  was  5,838,  of  which  5,598  were  local 
and  240  national.  .  .  . 

GENERAL  RESULTS  FOR  THE  UNITED  STATES 

Number  of  associations 5,838 

Total  shareholders  in  associations  reporting 1,745,725 

Total  dues  and  profits $450,667,594 

Average  dues  and  profits  per  shareholder  in  associa- 
tions reporting $257 

Average  size  of  loans  in  associations  reporting $1,120 

Homes  acquired  in  associations  reporting 314, 755 

The  total  dues  paid  in  on  instalment  shares  in  force  plus  the  profits 
on  the  same  of  the  building  and  loan  associations  of  the  country,  as 
stated,  amount  to  $450,667,594.  A  business  represented  by  this 
great  sum,  conducted  quietly,  with  little  or  no  advertising,  and,  as 
stated,  without  the  experienced  banker  in  charge,  shows  that  the 
common  people,  in  their  own  ways,  are  quite  competent  to  take  care 
of  their  savings,  especially  when  it  is  known  that  but  35  of  the  asso- 
ciations now  in  existence  showed  a  net  loss  at  the  end  of  their  last 
fiscal  year  and  that  this  loss  amounted  to  only  $23,332.20.  .  .  . 


842  READINGS  IN  ECONOMIC  HISTORY 


V.   SOCIAL  WELL-BEING 

A.   Improvement  of  Conditions  during  the  Nineteenth  Century,  1885  l 

The  general  industrial  and  social  advance  achieved  in  the  United  States  during 
the  first  three  quarters  of  the  nineteenth  century,  in  which  the  laboring  class  shared, 
is  here  set  forth.  While  it  may  be  acknowledged  that  the  average  worker  to-day 
enjoys  more  comforts  and  has  a  higher  standard  of  living  than  his  grandfather  or 
great-grandfather  was  able  to  command,  this  does  not  determine  the  question  as 
to  whether  labor  has  shared  equally  with  capital  in  the  general  advance. 

During  the  early  years  of  the  century,  then,  we  find  little  mechani- 
cal skill,  and  crude  and  imperfect  machines.  Muscle  was  essential 
to  the  workman,  and  what  he  accomplished  was  secured  by  purely 
manual,  frequently  monotonous  and  irksome  labor,  resulting  in  a 
product  generally  substantial,  but  often  clumsy,  and  exhibiting,  as 
a  rule,  little  economy  in  the  use  of  material  or  science  in  the  adjust- 
ment of  its  parts.  If  the  absence  of  machinery  was  a  blessing  to  the 
laborer,  then  in  that  respect  the  early  American  artisan  was  in  an 
ideal  state. 

HOURS    OF    LABOR 

The  hours  of  labor  in  nearly  all  industries  were  measured  by  the 
sun,  from  sunrise  to  sunset  constituting  the  working  day.  Not  until 
1824  was  the  subject  of  shorter  hours  agitated,  and  not  until  1840 
were  shorter  hours  adopted  to  any  extent;  it  was  several  years  after 
that  date  before  ten  hours  became  the  rule  in  the  mechanic  trades, 
while  in  the  textile  industries  the  ten  hour  system  is  a  modern  inno- 
vation, as  yet  adopted  only  in  Massachusetts,  so  far  as  America  is 
concerned. 

HOUSEHOLD   COMFORTS   POSSESSED  BY  THE   LABORER 

Laborers  at  the  beginning  of  the  century  had  few  of  the  comforts 
and  conveniences  now  common  in  the  poorest  families.  China,  glass- 
ware, and  carpets,  to  say  nothing  of  the  numberless  contrivances  now 
in  use  for  facilitating  household  labor,  were  then  practically  out  of 
reach.  Dwellings  were  warmed  by  open  fires  of  wood,  while  churches 
were  not  warmed  at  all.  The  iron  cook  stove  for  economically  and 
efficiently  aiding  the  culinary  operations  of  the  family  had  not  yet 
appeared.  Anthracite  coal,  though  for  fifteen  years  in  use  on  black- 

1  History  of  Wages  and  Prices  in  Massachusetts:  1752-1883.  Sixteenth  Annual 
Report  of  the  Massachusetts  Bureau  of  Statistics  of  Labor,  Parts  III  and  IV 
(Boston,  1885),  10-15. 


ECONOMIC    PROGRESS  843 

smiths'  forges  in  the  coal  region,  was  unavailable  for  household 
purposes,  and  in  1806  the  first  freightage  of  a  few  hundred  bushels 
was  brought  down  to  Philadelphia,  and  there  used  experimentally 
with  indifferent  success. 

The  artisan's  food  was  simple,  often  coarse,  and  in  fact  confined 
to  the  bare  necessities  of  life.  The  wide  range  of  products  which  now 
enrich  the  workingman's  table,  brought  to  him  from  all  the  markets 
of  the  world  by  the  modern  system  of  rapid  transportation,  were  many 
of  them  unknown,  or  if  known  were  expensive  luxuries  only  obtain- 
able by  the  favored  few. 

"Among  the  fruits  and  vegetables  of  which  no  one  had  then  even 
heard,  are  cantaloupes,  many  varieties  of  peaches  and  pears,  tomatoes 
and  rhubarb,  sweet  corn,  the  cauliflower,  the  egg  plant,  head  lettuce, 
and  okra. 


"If  the  food  of  an  artisan  would  now  be  thought  coarse,  his  clothes 
would  be  thought  abominable.  A  pair  of  yellow  buckskin  or  leathern 
breeches,  a  checked  shirt,  a  red  flannel  jacket,  a  rusty  felt  hat  cocked 
up  at  the  corners,  shoes  of  neat's  skin  set  off  with  huge  buckles  of 
brass,  and  a  leathern  apron,  comprised  his  scanty  wardrobe."  l 

The  wealthy  and  more  genteel  wore  silks,  velvets  and  broad- 
cloth of  foreign  manufacture,  but  the  laboring  classes  were  confined  to 
coarse  fabrics  of  home  production. 

EDUCATIONAL  AND   SOCIAL  ADVANTAGES 

At  the  beginning  of  the  century  the  educational  advantages  sur- 
rounding the  workingman  were  few.  Although  common  schools  were 
early  established  in  Massachusetts,  yet  judged  by  modern  standards 
they  were  poor  indeed.  Hard  by  the  church  stood  the  school,  but 
hard  by  the  school  on  every  village  green  stood,  through  all  the  early 
years,  the  gallows,  stocks,  and  whipping  post,  and  within,  the  rooms 
were  bare  and  unattractive,  and  unprovided  with  apparatus  for  aiding 
the  teacher's  work.  In  school  government  the  rod  played  an  im- 
portant part.  .  .  . 

The  opportunities  for  social  enjoyment  were  no  broader.  An  ex- 
tensive inquiry  into  the  social  life  of  workingmen  at  the  present  day, 
undertaken  by  the  Bureau  in  iBjg,2  showed  the  existence  in  Massa- 
chusetts of  large  numbers  of  social,  farmers',  and  mechanics'  clubs; 


1  McMaster.     A  History  of  the  People  of  the  United  States.     Vol.  i,  p.  97. 

2  See  Eleventh  Annual  Report,  pp.  239-293. 


844  READINGS  IN  ECONOMIC  HISTORY 

base  ball,  rowing,  and  sailing  clubs;  secret  societies  offering  social 
opportunities  to  members;  literary  and  debating  societies;  musical 
societies;  halls  for  dancing,  billiard  rooms,  and  bowling  alleys,  and 
other  avenues  of  enjoyment  practically  open  to  all  and  utilized  by 
a  considerable  number.  A  similar  inquiry  at  any  time  during  the 
first  quarter  of  the  century  would  have  disclosed  few  such  social  in- 
stitutions. The  industrial  population  was  too  much  diffused,  the 
character  of  the  labor  too  severe,  and  the  hours  of  labor  too  long  to 
permit  of  their  existence. 

It  is  frequently  said  that  there  were  fewer  class  distinctions  and 
greater  social  equality  in  early  New  England  life  than  now.  This  is 
undoubtedly  true  if  by  social  equality  is  meant  equality  of  condition. 
But  the  same  causes  that  have  operated  to  separate  society  into  classes 
have,  as  we  shall  show,  placed  at  the  command  of  the  manual  workman 
opportunities  for  mental  growth  and  social  enjoyment  unknown  to 
the  most  favored  in  the  early  days.  These  opportunities  have 
become  his  permanent  possession.  They  constitute  his  environment. 
In  modern  society  not  only  are  all  classes  united  by  ties  which  cannot 
be  broken  except  through  revolution,  and  each  class  dependent  upon 
every  other  to  a  degree  never  before  known,  but  the  social  privileges 
of  the  present  are  open  to  the  many  and  can  no  longer  be  monopolized 
by  the  few. 

MEANS   OF   TRANSPORTATION.      FACILITIES   POSSESSED   BY  THE 
WORKINGMAN  FOR  CHANGING  HIS   LOCATION 

Transportation  upon  water  was  confined  to  sailing  vessels,  and 
upon  land  to  wagons.  The  roads  were  very  poor,  although  after 
1800  the  construction  of  turnpikes  improved  the  means  of  communica- 
tion between  the  larger  towns.  These  were  introduced  by  corpora- 
tions, at  first  operated  as  toll  roads,  and  finally  assumed  by  the 
towns. 

Canals,  primitive  in  construction  and  crudely  operated,  were 
coming  to  be  relied  upon  as  avenues  of  internal  commerce.  These 
afterward  reached  a  high  point  of  development  until  superseded  by 
the  railway.  Neither  upon  sea  nor  land  in  1800  was  steam  employed 
in  transportation.  .  .  . 

The  postal  service  was  insufficient  and  far  from  rapid,  while  the 
rates  were  extremely  high.  Nine  different  rates  were  established  in 
1792,  varying  from  six  cents  for  thirty  miles  to  twenty-five  for  four 
hundred  and  fifty  miles  and  over,  and  this  schedule  continued  in 
force  for  many  years.  Missives  were  as  frequently  sent  by  private 


ECONOMIC    PROGRESS  845 

carriers  as  otherwise  and  sometimes  weeks  would  elapse  in  the  transit 
between  places  no  farther  apart  than  Boston  and  Philadelphia.  On 
the  average  each  person  in  the  country,  for  the  period  of  five  years 
ending  with  1799,  sent  but  iT4o  missives  by  the  mails,  while  for  the 
single  year  1875  the  average  was  23^-  per  person,  or  at  the  rate  of 
117!  for  five  years,  and  the  use  of  the  mails  has  since  increased,  and 
is  increasing.  Nothing  could  better  show  the  change  in  public  im- 
portance of  the  mail  service  than  the  enormous  increase  here  indicated. 

The  railroad,  telegraph,  and  telephone  are  all  comparatively 
modern  inventions.  By  means  of  steam  and  electricity  London, 
Liverpool,  and  San  Francisco  are  to-day  nearer  Boston  for  all  prac- 
tical business  purposes  than  were  New  York  or  Philadelphia  at  any 
time  prior  to  1820. 

The  comparative  isolation  of  business  centres  and  the  lack  of  facili- 
ties for  rapid  communication  between  them  materially  affected  the 
condition  of  the  wage  laborer.  The  risks  of  business  were  greater, 
and  no  industry  could  be  considered  permanent  when  it  was  impos- 
sible to  forecast  the  state  of  the  market;  for  instance,  the  manufac- 
turer in  Massachusetts  was  for  weeks  ignorant  of  affairs  in  centres  of 
distribution  like  Philadelphia  which  might  materially  affect  the  price 
of  his  product.  All  commerce  and  manufacturing  were  then  of  the 
nature  of  a  venture,  and  the  labor  dependent  upon  industrial  opera- 
tions thus  limited  remained  more  or  less  uncertain  of  employment. 

The  same  conditions  which  prevented  the  free  and  rapid  exchange 
of  products,  raised  the  price  and  limited  the  variety  of  articles  for 
household  consumption,  except  such  supplies  as  eggs,  corn  and  rye 
meal,  etc.,  which  could  be  easily  and  cheaply  procured  on  the  farms 
near  the  consumer;  and,  beyond  all,  the  laborer  could  not  easily 
change  his  environment.  Once  located  it  was  difficult  for  him  to 
remove  to  other  industrial  neighborhoods,  and  this  frequently  operated 
to  his  disadvantage  by  limiting  his  employment  and  reducing  his 
wage. 

WAGES,   AND  THE   PURCHASING  POWER   OF  MONEY 

A  system  of  barter  was  common  in  business  transactions.  Money 
was  scarce  and  wages  were  frequently  paid  in  groceries  or  clothing, 
or  in  orders  for  such  commodities,  the  orders  passing  from  hand  to 
hand  as  currency.  Of  actual  money  the  workingmen  had  little,  and, 
when  cash  became  absolutely  necessary,  they  were  often  obliged  to 
change  store  orders  therefor  at  considerable  discount. 

Employers  kept  stores  of  groceries,  clothing,  boots  and  shoes, 


846  READINGS  IN  ECONOMIC  HISTORY 

hats,  and  particularly  liquors  and  tobacco,  and  it  is  evident  from  the 
inspection  of  old  account  books  that  a  liberal  share  of  the  wages  of 
labor  was  paid  in  rum  and  gin. 


B.   Condition  of  Workers,  1902  l 

In  the  Fall  of  1902  Mr.  A.  Mosely,  a  British  manufacturer,  brought  a  group 
of  twenty-three  English  workingmen,  chosen  by  the  leading  unions  of  England,  to 
this  country  to  investigate  conditions  of  industry.  On  their  return  home,  each 
delegate  made  a  report,  which  were  published  in  book  Lrm.  The  following  extract 
is  taken  from  the  preface  by  Mr.  Mosely. 

.  .  .  My  personal  conclusion  is  that  the  true-born  American  is 
a  better  educated,  better  housed,  better  fed,  better  clothed,  and 
more  energetic  man  than  his  British  brother,  and  infinitely  more 
sober;  as  a  natural  consequence,  he  is  more  capable  of  using  his 
brains  as  well  as  his  hands.  Many  of  the  men,  however,  holding 
leading  positions  are  either  English  or  Scotch,  and  the  American 
himself  is  justly  proud  of  his  British  descent. 

One  of  the  principal  reasons  why  the  American  workman  is  better 
than  the  Britisher  is  that  he  has  received  a  sounder  and  better  edu- 
cation, whereby  he  has  been  more  thoroughly  fitted  for  the  struggles 
of  after  life;  .  .  . 

In  my  previous  trips  to  America  I  had  been  forcibly  struck  by 
the  up-to-date  methods  of  production  there,  both  from  a  business 
standpoint  and  as  regards  the  equipment  of  their  workshops.  The 
manufacturers  there  do  not  hesitate  to  put  in  the  very  latest  machinery 
at  whatever  cost,  and  from  time  to  time  to  sacrifice  large  sums  by 
scrapping  the  old  whenever  improvements  are  brought  out.  One 
man  in  charge  of  a  large  department  said  to  me:  "One  of  the  reasons 
of  our  success  is  the  readiness  of  all  our  men  to  drop  existing  modes 
of  production  as  soon  as  it  is  demonstrated  that  there  is  something 
better."  Labour-saving  machinery  is  widely  used  everywhere  and 
is  encouraged  by  the  unions  and  welcomed  by  the  men,  because  ex- 
perience has  shown  them  that  in  reality  machinery  is  their  best  friend. 
It  saves  the  workman  enormous  manual  exertion,  raises  his  wages, 
tends  towards  a  higher  standard  of  life,  and,  further,  rather  creates 
work  than  reduces  the  number  of  hands  employed.  .  .  . 

My  own  observations  lead  me  to  believe  that  the  average  American 
manufacturer  runs  his  machinery  at  a  much  higher  speed  than  is 


1  Mosely  Industrial  Commission  to  the  United  States  of  America,  Oct.-Dec., 
1902.     Reports  of  the  Delegates  (London,  1903),  6-9 ;  passim. 


ECONOMIC    PROGRESS  847 

the  usual  practice  in  England  —  in  other  words,  for  "all  it  is  worth," 
and  the  men  ably  second  the  employers' efforts  in  this  direction.  .  . 

How  is  it  that  the  American  manufacturer  can  afford  to  pay 
wages  50  per  cent,  100  per  cent,  and  even  more  in  some  instances, 
above  ours,  and  yet  be  able  to  compete  successfully  in  the  markets 
of  the  world?  The  answer  is  to  be  found  in  small  economies  such  as 
mentioned  above,  which  escape  the  ordinary  eye.  .  .  . 

That  the  American  workman  earns  higher  wages  is  beyond  ques- 
tion. As  a  consequence,  the  average  married  man  owns  the  house  he 
lives  in,  which  not  only  gives  him  a  stake  in  the  country,  but  saves 
payment  of  rent,  enabling  him  either  to  increase  his  savings  or  to 
purchase  further  comforts. 

Food  is  as  cheap  (if  not  cheaper)  in  the  United  States  as  in  England, 
whilst  general  necessaries  may,  I  think,  be  put  on  the  same  level. 
Rent,  clothes  made  to  order,  and  a  variety  of  things,  including  all 
luxuries,  are  considerably  dearer.  Luxuries,  however,  do  not  enter 
very  much  into  the  every  day  consumption  of  the  average  working 
man  in  this  country,  and  if  in  the  United  States  he  can  get  them  at 
all  (even  though  he  have  to  pay  a  high  price  for  them)  that  is  surely 
an  advantage  by  comparison. 

The  American  workman  drinks  but  little,  and  his  house  is  usually 
well  furnished  and  fitted  with  luxuries  in  the  way  of  bathrooms, 
laundries,  hot  water  and  heating  systems,  and  other  items  mostly 
unknown  to  the  British  workman. 

One  of  the  points  the  delegates  were  invited  to  investigate  was 
whether  or  not  the  workman  in  the  United  States  "wears  out"  faster 
than  the  Englishman.  Personally,  I  think  not.  It  is  generally  ad- 
mitted that  the  American  workman,  in  consequence  of  labour  saving 
machines  and  the  excellence  of  the  factory  organisation,  does  not  need 
to  put  forth  any  greater  effort  in  his  work  than  is  the  case  here,  if  as 
much.  ...  In  American  factories,  speaking  generally,  great  atten- 
tion is  paid  to  the  necessities  and  comfort  of  the  workers.  Separate 
lockers  (of  which  the  workman  has  the  key)  are  provided  for  working 
clothing;  consequently  the  man  can  arrive  at  and  leave  his  work  well 
clad,  changing  at  the  factory.  The  shops  are  usually  very  well  venti- 
lated, although  it  is  customary  to  keep  them  at  a  temperature  many 
degrees  above  the  average  in  this  country.  .  .  . 

One  point  that  has  struck  me  with  enormous  force,  as  I  believe 
it  has  all  the  delegates,  is  the  close  touch  and  sympathy  between 
master  and  man,  which  is  carried  a  step  further  in  the  enlistment 
of  the  men's  good  offices  to  improve  factory  methods.  .  .  . 


848  READINGS    IN   ECONOMIC    HISTORY 

VI.   CONSERVATION  OF  RESOURCES 
A.   Conservation  of  Natural  Resources,  1909  l 

In  any  estimate  of  the  economic  progress  of  the  people  of  the  United  States 
we  must  take  account  of  the  amount  and  fertility  of  the  soil,  and  of  the  stores 
of  metallic  and  mineral  and  forest  wealth  at  the  disposal  of  the  people,  for  upon 
these  will  depend  in  large  measure  their  future  development.  It  had  generally 
been  assumed  that  the  supplies  along  all  these  lines  were  practically  inexhaustible, 
but  in  1908  a  national  commission,  appointed  by  President  Roosevelt  to  investi- 
gate the  subject,  sounded  a  note  of  warning  concerning  our  wasteful  methods 
and  urged  more  careful  conservation  of  our  natural  resources. 

The  land  area  of  the  United  States,  excluding  Alaska  and  the  in- 
sular possessions,  is  about  3,000,000  square  miles,  or  1,920,000,000 
acres.  Of  this  area  over  half  is  arable,  and  a  little  less  than  half 
is  occupied  as  farm  land.  About  one-fourth  is  forest  and  one- 
eighth  sparse  wood  land  and  cut-over  land.  Two-fifths  is  arid 
or  semi-arid,  generally  requiring  irrigation;  one  twenty-fifth  is 
swamp  and  overflow  land  requiring  drainage.  Most  of  the  dry, 
wet,  and  sparsely  wooded  lands,  with  part  of  the  forest  area,  is 
adapted  to  grazing. 

About  two-thirds  of  the  land  has  passed  into  private  holdings. 
Of  the  original  1,920,000,000  acres  there  remained  July  i,  1908, 
387,000,000  acres  open  to  entry;  nearly  all  of  this  is  arid  or  other- 
wise unsuitable  for  settlement  by  families.  There  are  also  about 
235,000,000  acres  in  national  forests,  national  parks,  and  other  lands 
reserved  for  public  use.  .  .  . 

The  population  of  the  United  States  in  1900  was  76,303,387; 
probably  it  will  double  by  the  middle  and  triple  before  the  end  of 
the  present  century.  In  view  of  this  growth,  the  question  of  food 
supply  assumes  the  highest  importance.  How  shall  the  greatly 
augmented  demand  for  foodstuffs  be  met?  Can  sufficient  food  be 
obtained  from  our  own  soil  or  will  it  become  necessary  to  import,  and, 
if  we  import,  how  shall  we  find  the  means?  .  .  . 

Aside  from  the  importation  of  foodstuffs,  but  one  feasible  way 
of  meeting  our  growing  demand  appears  —  i.e.,  to  increase  our  crop 
yields.  That  this  is  not  only  feasible  but  entirely  practicable  is 
shown  by  the  larger  yields  of  long-settled  countries,  by  the  reclamation 
of  abandoned  farms  with  increasing  local  population,  by  the  general 
increase  in  our  crop  yield  during  the  last  decade,  and  by  the  natural 
tendency  of  soils  to  increase  in  fertility  when  properly  treated.  .  .  . 

1  Report  of  the  National  Conservation  Commission.     6oth  Cong.,  2d  sess.,  Sen. 
Doc.  No.  676  (Washington,  1909),  43-111,  passim. 


ECONOMIC    PROGRESS  849 

Aside  from  careless  or  ignorant  farming  and  such  hostile  climatic 
conditions  as  storms  and  droughts,  the  most  serious  enemies  to  crops 
are  noxious  insects  and  mammals.  .  .  . 

The  total  annual  losses  to  the  agriculture  of  the  country,  includ- 
ing live  stock,  animal  products,  and  grain  in  storage,  from  insects, 
mammals,  and  disease  is  estimated  at  $1,142,000,000,  or  one-sixth  of 
the  total  production.  .  .  . 

Our  stock  of  water  is  like  other  resources  in  that  its  quantity  is 
limited.  It  differs  from  such  mineral  resources  as  coal  and  iron, 
which  once  used  are  gone  forever,  in  that  the  supply  is  perpetual; 
and  it  differs  from  such  resources  as  soils  and  forests,  which  are 
capable  of  renewal  or  increase  (provided  the  supply  of  water  suffices), 
in  that  its  quantity  can  not  be  augmented.  It  differs  also  in  that 
its  relative  quantity  is  too  small  to  permit  full  development  of  other 
resources  and  of  the  population  and  industries  depending  on  them. 
Like  all  other  resources,  it  may  be  better  utilized.  It  must  be  better 
utilized  in  order  to  derive  full  benefit  from  lands  and  forests  and 
mines.  .  .  . 

The  first  requisite  for  waterway  improvement  is  control  of  the 
waters  in  such  manner  as  to  reduce  floods  and  regulate  the  regimen 
of  the  navigable  rivers;  the  second  is  development  of  terminals  and 
connections  in  such  manner  as  to  regulate  commerce. 

Most  of  the  headwaters,  especially  in  mountainous  regions,  may 
be  so  controlled  by  forestation  as  to  diminish  floods  and  ameliorate 
low  waters,  and  at  the  same  time  clarify  streams  required  for  water 
supply  and  augment  the  subsurface  reservoir  of  ground  water.  .  .  . 

Forests  not  only  grow  timber  but  they  hold  the  soil  and  they  con- 
serve the  streams.  They  abate  the  wind  and  give  protection  from 
excessive  heat  or  cold.  Woodlands  make  for  the  fiber,  health,  and 
happiness  of  each  citizen  and  of  the  nation. 

The  fish  which  live  in  forest  waters  furnish  each  year  $21,000,000 
worth  of  food,  and  not  less  than  half  as  much  is  furnished  by  the 
game  which  could  not  exist  without  the  forest.  .  .  . 

Our  forests  now  cover  550,000,000  acres,  or  about  one-fourth 
of  the  United  States.  The  original  forests  covered  not  less  than 
850,000,000  acres.  .  .  . 

The  yearly  growth  of  wood  in  our  forests  does  not  average  more 
than  12  cubic  feet  per  acre.  This  gives  a  total  yearly  growth  of  less 
than  7,000,000,000  cubic  feet.  .  .  . 

Since  1870  forest  fires  have  each  year  destroyed  an  average  of  fifty 
lives  and  $50,000,000  worth  of  timber.  Not  less  than  50,000,000 


850  READINGS    IN  ECONOMIC   HISTORY 

acres  of  forest  are  burned  over  yearly.  The  young  growth  destroyed 
by  fire  is  worth  far  more  than  the  merchantable  timber  burned.  .  .  . 

We  take  from  our  forests  each  year,  not  counting  the  loss  by  fire, 
three  and  one-half  times  their  yearly  growth.  We  take  40  cubic  feet 
per  acre  for  each  12  cubic  feet  grown;  we  take  260  cubic  feet  per 
capita,  while  Germany  uses  3  7  cubic  feet  and  France  25  cubic  feet.  .  .  . 

We  should  stop  forest  fires.  By  careful  logging  we  should  both 
reduce  waste  and  leave  cut-over  lands  productive.  We  should  make 
the  timber  logged  go  further  by  preservative  treatment  and  by  avoid- 
ing needless  loss  in  the  woods,  the  mill,  the  factory,  and  in  use.  We 
should  plant  up  those  lands  now  treeless  which  will  be  most  useful 
under  forest.  We  should  so  adjust  taxation  that  cut-over  lands  can 
be  held  for  a  second  crop.  We  should  recognize  that  it  costs  to  grow 
timber  as  well  as  to  log  and  saw  it.  ... 

Under  right  management  our  forests  will  yield  over  four  times 
as  much  as  now.  We  can  reduce  waste  in  the  woods  and  in  the  mill 
at  least  one-third,  with  present  as  well  as  future  profit.  We  can 
perpetuate  the  naval-stores  industry.  Preservative  treatment  will 
reduce  by  one-fifth  the  quantity  of  timber  used  in  the  water  or  in  the 
ground.  We  can  practically  stop  forest  fires  at  a  total  yearly  cost 
of  one-fifth  the  value  of  the  standing  timber  burned  each  year. 

We  shall  suffer  for  timber  to  meet  our  needs  until  our  forests  have 
had  time  to  grow  again.  But  if  we  act  vigorously  and  at  once  we 
shall  escape  permanent  timber  scarcity.  .  .  . 

The  annual  products  of  the  mines  of  the  United  States  now  exceed 
$2,000,000,000  in  value.  They  contribute  65  per  cent  of  the  freight 
traffic  of  the  country.  The  industry  employs  over  a  million  men  at 
the  mines,  and  twice  that  number  in  handling,  transporting,  and 
manufacturing  the  products. 

The  waste  or  losses  in  the  mining,  preparation,  and  use  of  the 
mineral  products  is  estimated  to  exceed  $1,500,000  per  day. 

The  available  and  accessible  commercial  coal  in  the  United  States 
aggregates  approximately  1,400,000,000,000  tons.  At  the  present 
increasing  rate  of  production  this  will  be  depleted  and  will  approach 
exhaustion  before  the  middle  of  the  next  century;  and  the  additional 
1,600,000,000,000  tons  of  inferior  coal  and  lignite  not  now  available 
economically  will  approach  exhaustion  before  the  end  of  the  next 
century. 

The  known  supplies  of  high-grade  iron  ores  in  the  United  States 
approximate  4,788,150,000  tons,  which  at  the  present  increasing  rate 
of  consumption  can  not  be  expected  to  last  beyond  the  middle  of  the 


ECONOMIC    PROGRESS  851 

present  century.  There  are  also  estimated  to  be  75,116,070,000  tons 
of  low-grade  iron  ores  which  may  hereafter  be  available. 

The  known  supplies  of  petroleum,  natural  gas,  and  high-grade 
phosphate  rock  can  not  be  expected  to  supply  the  nation's  needs 
through  the  present  century. 

The  losses  from  fire  in  the  United  States  during  1907  were  approx- 
imately $450,000,000,  of  which  some  8400,000,000  was  preventable 
waste.  .  .  . 

The  extension  of  the  supply  of  our  more  important  mineral  re- 
sources is  absolutely  essential  to  the  future  welfare  of  the  nation. 
How  to  accomplish  this  is  a  problem  demanding  the  consideration 
of  the  best  science  and  statesmanship  the  country  affords. 

First  of  all  is  the  prevention  of  unnecessary  waste;  and  for 
this  the  individual  and  the  State  and  Federal  governments  must 
cooperate. 

All  unscientific  or  inefficient  use  of  resources  is  waste;  and  the 
most  important  element  in  conservation  is  the  fact  that  the  necessary 
waste  of  to-day  may,  through  inquiry  or  research  or  through  economic 
conditions,  become  the  avoidable  waste  of  to-morrow.  .  .  . 

The  duration  of  our  mineral  resources  may  be  still  further  extended 
through  investigations  looking  toward  the  substitution  of  common 
mineral  substances  for  those  which  more  rapidly  approach  exhaustion 
because  of  their  rarity  or  greater  importance,  as,  for  example,  the  sub- 
stitution of  concrete  for  structural  steel;  of  low-grade  coals  or  lignite 
for  those  of  higher  grade;  and  of  water  power  for  steam. 

Furthermore,  in  the  case  of  certain  supplies  which  are  now  being 
largely  exported,  or  in  the  use  of  which  waste  is  excessive,  the  duration 
may  be  extended  for  domestic  use  through  such  ownership  or  control 
as  will  prevent  both  sending  out  of  the  country  and  unnecessary  waste. ' 

Again,  the  prevention  of  waste,  and  hence  the  extension  of  the 
life  of  supplies,  may  be  secured  through  such  increase  in  the  price  of 
materials  as  will  render  practicable  their  more  complete  extraction 
and  efficient  use.  .  .  . 

B.   National  Vitality:  Its  Wastes  and  Conservation,  1909  l 

In  discussions  of  conservation  attention  has  usually  been  directed  only  to 
the  problem  of  safeguarding  and  rationally  using  the  natural  resources  of  the 
country.  But  the  development  of  the  human  resources  is  even  more  import- 
ant. The  imporlajice  of  preventing  disease  and  accident,  of  increasing  vitality, 

1  Report  of  the  National  Conservation  Commission.     6oth  Cong.,  2d  Sess.,  Sen. 
Doc.  No.  676  (Washington),  623. 


852  READINGS   IN   ECONOMIC   HISTORY 

and  of  prolonging  life  were  emphasized  in  a  report  made  by  Professor  Irving 
Fisher  to  the  National  Conservation  Commission.  The  desirability  of  further 
development  and  training  of  the  human  resources  by  means  of  education  has 
already  been  emphasized  in  earlier  readings. 

The  problem  of  conserving  natural  resources  is  only  one  part  of 
the  larger  problem  of  conserving  national  efficiency.  The  other 
part  relates  to  the  vitality  of  our  population.  The  two  parts  are 
closely  interwoven.  Protection  against  mining  accidents,  forest 
fires,  floods,  or  pollution  of  streams  prevents  not  only  loss  of  property, 
but  loss  of  life.  The  prevention  of  disease,  on  the  other  hand,  increases 
economic  productivity. 

So  far  as  we  can  compare  vital  and  physical  assets  as  measured 
by  earning  power,  the  vital  assets  are  three  to  five  times  the  physical. 
The  facts  show  that  there  is  as  great  room  for  improvement  in  our 
vital  resources  as  in  our  lands,  waters,  minerals,  and  forests.  This 
improvement  is  possible  in  respect  both  to  the  length  of  life  and  to 
freedom  from  disease  during  life. 

Contrary  to  common  impression,  there  is  no  iron  law  of  mortality. 
Recent  statistics  for  India  show  that  the  average  duration  of  life 
there  is  less  than  twenty-five  years.  In  Sweden  it  is  over  fifty  years, 
in  Massachusetts  forty-five  years.  The  length  of  life  is  increasing 
wherever  sanitary  science  and  preventive  medicine  are  applied.  In 
India  it  is  stationary.  In  Europe  it  has  doubled  in  three  and  a  half 
centuries.  The  rate  of  increase  during  the  seventeenth  and  eighteenth 
centuries  was  about  four  years  per  century,  during  the  first  half  of 
the  nineteenth  century  about  nine  years  per  century,  during  the  latter 
half  of  the  nineteenth  century  about  seventeen  years  per  century,  and 
in  Germany,  where  medical  and  sanitary  science  has  reached  the  high- 
est development,  about  twenty-seven  years  per  century.  The  only 
comparative  statistics  available  in  this  country  are  for  Massachusetts, 
where  life  is  lengthening  at  the  rate  of  about  fourteen  years  per  cen- 
tury, or  half  the  rate  in  Germany. 

There  is  no  need,  however,  of  waiting  a  century  for  this  increase. 
It  could  be  obtained  within  a  generation.  Three-fourths  of  tubercu- 
losis, from  which  150,000  Americans  die  annually,  could  be  avoided. 
Eighteen  experts  in  various  diseases,  as  well  as  vital  statisticians,  have 
contributed  data  on  the  ratio  of  preventability  of  the  ninety  different 
causes  of  death  into  which  mortality  may  be  classified.  From  these 
data  it  is  found  that  fifteen  years  at  least  could  be  at  once  added  to 
the  average  human  lifetime  by  applying  the  science  of  preventing 
disease.  More  than  half  of  this  additional  life  would  come  from  the 


ECONOMIC    PROGRESS  853 

prevention  of  tuberculosis,  typhoid,  and  five  other  diseases,  the  pre- 
vention of  which  could  be  accomplished  by  purer  air,  water,  and  milk. 
In  Lawrence,  Mass.,  after  the  installation  of  a  pure- water  supply,  the 
death  rate  from  typhoid  was  reduced  by  80  per  cent.  For  every 
death  thus  saved  from  typhoid,  two  or  three  deaths  are  saved  from 
other  diseases. 

Judging  from  the  English  statistics  of  illness,  we  must  conclude 
that  at  all  times  in  the  United  States  about  3,000,000  persons  are 
seriously  ill,  of  whom  about  500,000  are  consumptives.  Fully  half  of 
this  illness  is  preventable. 

If  we  appraise  each  life  lost  at  only  $1,700  and  each  year's  average 
earnings  for  adults  at  only  $700,  the  economic  gain  to  be  obtained  from 
preventing  preventable  disease,  measured  in  dollars,  exceeds  one  and 
a  half  billions.  This  gain,  or  the  lengthening  and  strengthening  of 
life  which  it  measures,  can  be  secured  through  medical  investigation 
and  practice,  school  and  factory  hygiene,  restriction  of  labor  of  women 
and  children,  the  education  of  the  public  in  both  public  and  private 
hygiene,  and  through  improving  the  efficiency  of  our  municipal, 
state,  and  national  health  service.  Our  National  Government  has 
now  several  bureaus  exercising  health  functions,  which  only  need  to 
be  concentrated  under  one  department  to  become  coordinated  parts 
of  a  greater  health  service  worthy  of  the  nation. 


INDEX 


Agriculture,  methods  of  (1650),  n; 
(i775),  3i;  (1790),  235;  (1816), 
343;  of  Indians,  28;  in  New 
England,  29-32;  in  New  York, 
32;  in  New  Jersey,  34;  in  Vir- 
ginia, 35,  37,  221,  222;  in  North 
Carolina,  41,  228;  disorganized 
by  Revolution,  219;  inefficient 
(1792),  220;  George  Washington 
on,  221,  223;  in  Maryland,  222; 
in  Georgia,  228;  and  the  tariff, 
313-316,  320;  products  of,  344, 
480-484;  English  and  American 
compared,  464-467;  progress  in, 
469;  societies  for,  469;  of  the 
North,  476-479,  567-571;  of  the 
South,  476-479,  567-571,  578- 
582,  605-608,  620,  627-629;  ex- 
ports in,  598-601,  616;  laborers  in, 
608;  foreigners  in,  609-613;  dry 
farming  in,  624-627. 

American   characteristics,    268-271, 

338-347,  542-545>  846-847. 
American  Federation  of  Labor,  799; 
membership  of,  80 1. 

Balance  of  trade,  theory,  128; 
between  England  and  the  colo- 
nies, 166;  of  the  United  States, 
424-426,  600. 

Bank,  Land,  101;  First  United 
States,  485-493;  Second  United 
States,  493-499;  trust  companies 
and,  707-709;  postal  savings,  683; 
deposits  in,  838;  savings,  839; 
school  savings,  840. 

Banking,  and  the  Bubble  Act  in 
Massachusetts  (1741),  101;  in 


United  States  (1791),  487;  state, 
490-493;  and  panics,  501-503; 
wildcat,  507;  Suffolk  system  of, 

508,  509;    safety  fund  system  of, 

509,  510;      free,     510-515,    700- 
704;   national,  700-711. 

Bounties,  on  colonial  products,  127, 

142. 
Building  and  loan  associations,  839, 

840. 

Canals,  proposals  for  building,  386- 
387;  location  of,  390-392,  407; 
compared  with  railroads,  396-406; 
rates  on,  401-406. 

Capital,  invested  in  cotton  industry, 
278-279,  283,  287;  woolen  in- 
dustry, 282,  295;  manufacture  of 
machinery,  282;  earnings  of,  819. 

Carrying-trade,  of  New  England 
(1761),  72-73;  of  New  York,  75; 
colonial,  regulated  by  Navigation 
Acts,  118-121;  profitableness  of, 
during  Napoleonic  Wars,  207, 
209  (table);  frauds  of  neutral, 
210;  injured  by  British  and 
French  decrees,  212;  and  the 
tariff,  316-319;  decline  of,  318; 
development  of  (1821-1860),  432 
(table);  (1860-1910),  651-652 
(table). 

Cattle,  13,  15,  31,  37,  39,  41,  223, 
235-236,  359-36o. 

Character  of  people,  in  New  York 
(1759),  112;  in  Virginia,  113; 
in  United  States  (1816),  269-271; 
(1817-1860),  338-342;  (1820), 
353-355;  (1832),  367;  (1837), 


8S5 


856 


INDEX 


356;  (1860),  542-545;  (1902), 
846-847. 

Cities,  growth  of,  358,  362;  (1790- 
1880),  780-781;  concentration  of 
population  in  (1880-1910),  781- 
783;  of  immigrants  in,  788. 

Coin,  scarcity  of,  in  colonies,  104; 
in  West,  248. 

Coinage,  history  of  (1791-1840), 
520-522;  of  silver  (1873-1893), 
711-714,  722-726. 

Colonization,  cost  of,  i ;  of  Plymouth 
plantation,  3, 4,  9;  in  New  Nether- 
lands, ii ;  of  West  India  Co. 
13;  in  Maryland,  14;  in 
Carolina,  15-17;  in  Georgia,  19; 
Franklin  on,  20;  purposes  of,  144. 

Commerce,  foreign,  in  colonies,  43- 
52,69-81;  of  United  (1783-1812), 
185-218;  (1800-1860),  413-445; 
(1860-1909),  644-655;  more  profit- 
able than  manufactures  (1787), 
200;  legislation  on,  418-4^;  of 
New  York,  433-445  (tables);  of 
Boston,  435,  436  (tables);  of  New 
Orleans,  436-438.  See  Carrying- 
trade,  Exports,  Imports,  Trade. 

Communism,  of  the  Rappites,  537- 
539;  of  the  Owenites,  539-541; 
of  the  Associations,  541-542. 

Compensation,  workman's,  805 ;  fed- 
eral, 806. 

Conservation,  of  natural  resources, 
848-851;  of  life,  852-853. 

Constitution,  economic  reasons  for, 
197-200. 

Corn  (Indian),  method  of  cultivat- 
ing, by  Indians,  29;  production 
of,  in  colonies,  30,  32;  in  Virginia 
(1787),  221;  importance  of,  347, 
636-639;  exportation  of,  442-445 
(table). 

Cost  of  living  (1698),  82;  (1802), 
271;  (1817),  348;  (1910),  810. 


Cotton,  growth  of,  224,  566;  kinds, 
225;  gin,  invention  of,  226; 
effect  of  gin  upon  export  of,  227, 
599;  manufactures  of,  263,  283 
(table),  285-293,  746-751;  con- 
sumption of,  296,  747;  impor- 
tance of,  637;  manufactures  of, 
in  the  South,  750. 

Currency,  in  colonies,  97-99,  146, 
175-179,  484;  depreciation  of, 
177,  490-493;  movement  of,  516- 
519;  emission  of,  691-700;  elas- 
ticity provided  for,  709-711; 
kinds  of,  727-728.  See  Banking, 
Coinage,  Money,  Paper  Money, 
Silver. 

Debt,  federal,  424,  425,  487;    state, 

522,  523  (table). 
Drink,  834,  847.    See  Intemperance. 

Education,  273,  829,  843. 

Embargo,  214,  419,  424;  effect  on 
commerce  of,  215,  216. 

Erie  Canal,  route  to  the  West,  361; 
effects  of,  on  internal  improve- 
ments, 390-392. 

Expenditures,  of  the  government, 
687-689;  of  individuals,  828-838; 
of  a  normal  family,  829,  832;  of  a 
self-supporting  woman,  831;  ex- 
travagant, 834;  for  drink,  835; 
for  luxury,  836;  for  amusement, 

837. 

Exports,  colonial,  51-52  (tables), 
133  (table);  from  New  Hamp- 
shire, 43;  from  New  York,  45, 
75-77>  from  Pennsylvania,  46, 
78;  from  Maryland,  47,  80; 
from  Virginia,  48,  80;  from  North 
Carolina,  48;  from  South  Caro- 
lina, 49;  from  Southern  colonies, 
69,  132-133,  325;  from  New  Eng- 
land, 70,  71,  74;  from  Georgia, 
81;  regulated  by  Navigation 


INDEX 


857 


Acts,  126;  from  the  United  States 
(1791-1816),  209  (table),  314,  325; 
(1800-1860),  414  (table),  416, 
417  (tables),  438  (table),  442- 
445  (table),  477  (tables),  570-571; 
(1860-1915),  598-601,  616.  See 
Trade,  foreign. 

Factories,  description  of,  at  Lowell, 
289,  53i,  537;  at  Waltham,  529- 
531;  at  Lynn,  529-531;  at  Man- 
chester, 535;  number  of  (1849- 
1909),  745;  in  the  South,  751. 

Farms,  yield  of,  484;  size  of,  602, 
616  (table),  629  (table),  634; 
number  of,  614-617. 

Fish,  6,  9,  34,  43. 

Fishing,  in  New  England,  58,  74; 
advantages  of  American,  60. 

Food,  in  colonies,  1 1 1 ;  unwholesome 
(1797),  272;  prices  of  (1817), 
348;  (1910),  810,  830,  831; 
better,  demanded  by  workingmen, 
828,  843;  waste  of,  837. 

Frontier,  population  of,  356-357; 
lines  (1830-1860),  369-375;  dis- 
appearance of,  779. 

Fruits,  15,  31,  33,  38,  599,  637. 

Fur  trade,  57. 

Georgia,  settlement  of,  19;  objec- 
tions to  prohibition  of  rum  and 
slaves  in,  92. 

Gold  reserve,  accumulation  of,  696- 
700. 

Greenbacks,  quantity  and  nature  of, 
691-693,  727-728;  the  issue  of, 
criticized,  693-695 ;  fluctuation 
in  the  value  of,  696;  redemption 
of,  696-700.  See  Paper  money. 

Hogs,  13,  30,  40,  235,  237,  359-360- 

Houses,  colonial  (1650),  12;  pioneer 

(1790),  235,  236;  architecture  of, 

341 ;  higher  standards  in,  828, 842 ; 


acquired    through    building    and 
loan  associations,  841. 

Immigrants,  opportunities  for,  in 
the  West,  234-235;  number  of, 
in  agriculture,  608-613;  distri- 
bution of,  786,  788;  country  of 
origin  of,  787;  concentration  in 
cities  of,  788. 

Immigration,  to  colonies  urged,  1-4, 
6-2  2 ;  effect  of,  on  growth  of  popu- 
lation, 107;  extent  and  character 
of,  439,  (1820-1860),  550-558; 
(1882-1910),  783-790;  causes  of, 
784;  legislation  concerning,  789- 
792. 

Imports,  colonial,  43-50,  passim,  51- 
52  (tables),  69,  132-133;  into 
Virginia,  69;  into  New  York,  75, 
423;  affected  by  Navigation  Acts, 
128;  from  England  into  Southern 
colonies,  132;  into  New  England, 
133  (table) ;  into  United  States, 
280,  413-414  (table),  421-426. 

Income,  distribution  of  national 
(1850-1910),  822-827. 

Independent  Treasury,  arguments 
for,  503-507. 

Indians,  trade  with,  i ;  agriculture 
of,  28. 

Industries,  colonial  (1721),  42-51; 
extractive,  53-61 ;  localization  of, 
boots  and  shoes,  277,  301-303; 
cotton  goods,  282;  woolen  goods, 
282;  machinery,  282;  clothing, 
305;  collars,  305;  rubber  goods, 
307;  watches,  307-308;  musical 
instruments,  307. 

Inheritance,  New  England  laws  on, 

22. 

Intemperance,  271,   273,  834.     See 

Drink. 

Interest,  rates  of,  820,  824-826. 
Internal  improvements,  federal  aid 

for,  385-390;    and   the   national 


858 


INDEX 


defense,  385-388;  in  the  West, 
390-392;  arguments  for  and 
against,  396-401 ;  development 
of,  401-406. 

Iron  (and  steel)  manufactures  of, 
260,  279-281,  283  (table),  297- 
300,  752-755  (table). 

Irrigation,  importance  of,  622-624. 

Labor,  scarcity  of,  in  colonies,  82; 
condition  of,  no,  229,  237,  524- 
528,  792,  846-847;  and  the  tariff, 
313-316;  hours  of,  534-535 
(table),  794,  842;  organizations 
of,  795-801;  legislation  concern- 
ing, 801-808;  share  of,  in  net 
product  of  industry,  815-819; 
share  of,  in  national  income,  824- 
826. 

Lakes,  traffic  on,  384,  407,  440, 
655-659;  rates  on,  401-406. 

Land,  head  rights  of  colonists  to, 
3,  16;  advice  on  granting,  23; 
grants  of,  by  governors,  24;-  grants 
of,  in  Pennsylvania,  25;  methods 
of  granting,  26;  sales  of,  27,  238, 
239  (table) ;  free,  attracted  settlers 
to  West,  234,  604;  small  holdings 
of,  237;  speculation  in  public, 
238,  458-464,  500;  grants  of,  to 
states,  414-415,  450;  extent  and 
importance  of  public,  446-455, 
616;  proceeds  from  sale  of,  448, 
455,  456;  and  wages,  455~4575 
price  of,  457,  481,  571-572,  603, 
613-622,  631,  635;  tenure  of, 
601-608,  627-629;  grants  of,  in 
the  West,  640-643. 

Legal  Tender  Act,  criticism  of, 
693-695. 

Live-stock.  See  Cattle,  Hogs,  Sheep. 

Lumber,  in  the  colonies,  42-43,  46, 
49,  53,  .7°-72>  74,  76-78,  80;  on 
the  Mississippi,  357-358;  manu- 
facture of,  743. . 


Machinery,  invention  of,  267;  intro- 
duction of  cotton,  287,  288,  747- 
751;  agricultural,  280,  297,  467- 
476,  622;  introduction  of  woolen, 
295;  value  of  (1860),  299;  in 
factories,  528-537,  745- 

Manners,  112,  113,  260-271,  338- 
342- 

Manufactures  (1721),  43-46;  (1732) 
60-65;  (1765),  158;  (1840),  283; 
in  Massachusetts,  43;  in  Penn- 
sylvania, 46;  in  New  York,  65-66; 
in  New  England,  68;  of  iron  pro- 
hibited in  colonies,  139;  few,  for 
sale  (1775),  252;  obstacles  to 
development  of,  253,  310,  339; 
after  the  Revolution,  254,  255; 
protection  asked  for,  256,  309  ff.; 
Hamilton's  report  on,  257-266; 
of  iron,  260,  279-282,  297-300, 
752-755;  of  cotton,  263,  278-279, 
283,  285-293,  747-751;  of  wool- 
ens, 264,  293-296,  743 ;  of  leather, 
277,  300-303,  743;  of  printing 
presses,  303-304;  of  sewing  ma- 
chines, 304-305;  of  flour  and 
meal,  305-306,  743;  of  India 
rubber  goods,  307;  of  furniture, 
307,  743;  of  watches,  308;  pro- 
gress of  (1793),  266;  (1810),  277; 
(1840),  283;  (1860),  282;  (1850- 
1880),  740;  decline  of  (1795),  267; 
household,  260-268,  279;  Galla- 
tin's  report  on,  276-282;  geo- 
graphical distribution  of,  277, 
302,  304-308,  742-744,  746,  75i; 
value  of  (1840),  283;  (1860),  282, 
291,  297,  299,  301,  304,  306; 
(1900),  618;  (1850-1880),  740, 
743;  (1850-1910),  745;  in  the 
West,  357;  conditions  favorable 
to,  739- 

Market,  retail,  105;  colonies  a,  for 
British  manufactures,  132;  west- 
ern, 248;  wholesale,  303. 


INDEX 


859 


Mercantilism,  115-117. 

Merchant  marine  (1789-1815),  208 

(table);      (1821-1860),     427-431, 

432  (table);  (1860-1910),  651-655. 
Mining,   value   of    the   product  of, 

282,  753- 
Molasses    Act     (1733),    arguments 

relative   to,    134;    ineffectiveness 

of,  136,  152. 
Money,  commodity,  in  colonies,  97; 

tobacco  as,  in  Virginia,  98;  paper, 

99,  146-147,   175,   177,   i79,  485, 
493-495;     scarcity   of,    in   West, 
248.    See  Banking,  Coin,  Coinage, 
Currency,    Gold   reserve,    Green- 
backs, Paper  money,  Silver. 

Naval  stores,  54. 

Navigation.    See  Trade,  Commerce. 

Navigation  act  (1660),  118;  (1663), 
120;  approved,  120;  objections 
to,  122-123;  criticized  by  Adam 
Smith,  124;  enumeration  of  arti- 
cles in,  125;  purpose  of,  129; 
evaded,  138;  enforcement  of, 
148-151,  154-155,  l6°;  opposi- 
tion to,  155,  160-161;  defended, 
162-164. 

Non-importation  agreements,  168, 
170;  lead  to  petition  for  reconcilia- 
tion by  London  merchants,  171; 
by  West  India  planters,  173. 

Non-intercourse  Act,  419,  424. 

Northern  States,  agriculture  in, 
219-221,  476-484;  localization 
of  manufactures  in,  282;  com- 
merce of,  421-424. 

Panics  (and  crises)  (1837),  499~5°3; 

(1873),  729-732;  (1884),  732-734; 

(1907),  734-737- 
Paper  money,  in  colonies  defended, 

99;     prohibited    by    Parliament, 

100,  103,     146;      necessity    of, 
in    colonies,    104;     remonstrance 


against  prohibition  of,  147;  con- 
tinental, 175;  depreciation  of, 
1 7 7,  493-495;  issued  by  the  states 
(1781-1788),  179,  485;  prohibited 
by  the  Constitution,  486.  See 
Greenbacks. 

Parcel  post,  proposals  for  the  estab- 
lishment of,  683-684. 

Patents,  on  cotton  machinery,  227, 
289. 

Peddler,  as  a  distributor  of  goods, 
249. 

Plantations,  state  of  the  British 
(1721),  42-51. 

Plymouth  Plantation,  articles  of 
agreement  of,  3. 

Population,  in  Pennsylvania  (1721), 
46;  in  Maryland,  46;  in  South 
Carolina,  49;  growth  of,  in  col- 
onies, 106;  (1752-1756),  108; 
growth  of,  due  to  large  families, 
109;  in  North  Carolina  (1759), 
114;  condition  of,  no,  112,  22*9, 
237,  260-271,  813-847;  growth  of, 
in  West,  338,  451;  growth  of,  in 
United  States,  451-452,  547 
(table),  550  (table),  597  (table), 
614,  630,  777-779  (table);  dis- 
tribution of  (1860),  545-550,  568- 
569;  (1880),  779;  concentration 
of,  in  cities,  780-783. 

Post-office,  development  of  (1791- 
1816),  274;  (up  to  1911),  682-686; 
rates,  275;  rural  free  delivery  of, 
682-683. 

Poverty,  among  poor  whites  of 
Virginia  (1780),  229;  unknown  in 
West,  237,  345;  caused  by  large 
fortunes,  820-822. 

Prices,  of  farm  products  (1731),  39; 
(1763),  80;  (1817),  348;  (1843), 
526-527;  wholesale  (1897-1910), 
766,  809  (table);  retail  (1910),  810. 

Products,  colonial  (1721),  42-51; 
of  New  Hampshire,  43;  of  Mas- 


86o 


INDEX 


sachusetts,  43;  of  New  York,  44, 
70;  of  New  Jersey,  45,  70;  of 
Pennsylvania,  46,  70;  of  Mary- 
land, 47,  344;  of  Virginia,  47,  79, 
344,  of  South  Carolina,  49,  344; 
of  Western  and  Southern  states, 

344,  359,  407,  481-484- 

Profits,  817,  819,  824-827. 

Prosperity,  great  in  colonies,  no; 
among  American  laborers,  524- 
525;  in  the  United  States  (1850- 
1912),  813-815,  827,  832-847. 

Public  domain,  attracted  settlers 
to  the  West,  234,  604;  specula- 
tion in,  238,  458-464,  500;  extent 
and  character  of  (1832),  446-455, 
616. 

Railroads,  development    of    (1830- 

1850),  393-395;  (1841-1854),  4i5; 
(1850-1860),  404-406;  (1860- 
1900),  659-662;  first  in  United 
'States,  396-406;  compared  with 
canals,  396-406,  844;  rates  on, 
401-406,  662-667. 

Rent,  824-826,  831. 

Revenues,  of  the  government  (1860), 
689;  (1892-1897),  762. 

Revolution,  of  colonies  made  pos- 
sible by  conquest  of  French,  143; 
economic  causes  of,  143-166; 
social  effects  of,  181-184. 

.Rivers,  navigation  on  Western,  379- 
385;  decline  of  traffic  on,  667- 
675;  future  importance  of  traffic 
on,  675-680. 

Roads,  badness  of  (1810),  241; 
(1835),  377-379- 

Rum,  importation  of,  into  Georgia 
prohibited,  92;  manufacture  of, 
affected  by  Molasses  Act,  135. 

Savings,  of  workingman's  family, 
833;  in  banks  (1820-1913),  838- 
840. 


Servants,  work  of,  in  Maryland 
(1655),  14;  in  South  Carolina 
(1731),  17;  in  Pennsylvania 
(1748),  84;  (i775),  88;  in  Vir- 
ginia (1656),  87. 

Sheep,  223,  293,  296. 

Ship  subsidy,  proposals  for,  654-655. 

Shipbuilding,  in  Massachusetts,  44, 
55;  in  the  United  States  (1789), 
204,  254,  262;  cost  of,  205. 

Shipping,  encouraged  by  Naviga- 
tion Act  (1660),  118;  advantage 
to  England  of  colonial,  130;  cost 
of  operation  of  American  (1805), 
206;  tonnage  of  (1789-1815), 
208  (table);  (1821-1860),  432 
(table);  (1860-1910),  651-652 
(table). 

Silver,  demonetization  of,  711-717; 
plea  for  the  free  coinage  of,  711- 
714,  722-725;  purchase  of,  717- 
722;  trade  dollar,  725-726.  See 
Money,  Currency. 

Slavery,  unprofitableness  of  (1774), 
96,  560-563,  571-578;  decline  of 
(1788),  231;  areas  of,  359;  effi- 
ciency of,  564-571,  570-582. 

Slaves  '(1748),  86;  trade  in,  to  Vir- 
ginia (1708),  89;  request  of  mis- 
sionary for,  91;  introduction  of, 
into  Georgia  urged,  93;  refused, 
95;  treatment  of,  230,  233;  number 
of  (1860),  549;  capital  invested  in, 
574-576,  620;  living  expenses  of, 
580;  rules  for  managing,  582-594; 
internal  trade  in,  595-597;  price 
of,  596. 

Smuggling,  137-138;  interference 
with,  a  cause  of  the  Revolution, 
161,  165. 

Southern  States,  character  of  agri- 
culture in,  221-229,  578-582, 
627-629;  slavery  in,  229-234; 
commerce  of,  421-424;  absence 
of  manufactures  in,  576-578; 


INDEX 


86 1 


farm  tenancy  in,  605-608;  ef- 
fect of  the  Civil  War  on,  620,  627. 

Speculation  in  land,  238,  458-464, 
500. 

Stage-coach,  travel  by  (1802),  240; 
(1818),  350;  (1835,)  376-3/9- 

Stamp  Act,  155,  157;  effect  in  Eng- 
land of,  169. 

Standard  of  living  (1910),  827; 
of  a  self-supporting  woman,  831. 

Steamboat,  invention  of,  250;  effect 
of,  on  river  trade,  379-385,  407- 
410  (table);  on  the  Great  Lakes, 

384. 
Steamship,    development    of,    427- 

432. 

Steel.    See  Iron. 
Sugar  Act,  (1764),  i52- 

Tariff  acts,  colonial,  140;  inharmo- 
nious, between  states  (1783-1789), 
iQ7;  protective,  urged,  256,  257, 
310-316,  333-337,  760,  764;  argu- 
ments against,  258,  316-323,  327- 
332,  757,  761,  765;  and  wages, 
320,  330,  456;  the  principle  of 
minimums  in,  324,  328,  331 ;  com- 
promise, 326,  336;  ad  valorem 
duties  in,  328;  and  reciprocity 
treaties,  420-421,  operation  of, 
425-426,  762;  changes  in  (1860- 
1882),  756-757;  (1883-1897),  758- 
763;  commission  of  1882,  757; 
act  of  1909,  763;  act  of  1913, 

765- 

Taxation,  of  colonies  by  England, 
155-156;  impossible  for  carrying 
on  Revolution,  175. 

Telegraph,  development  of,  680-682. 

Telephone,  development  of,  680- 
682. 

Tobacco,  plantation,  description  of 
(1686),  36;  cultivation  of,  37,  41, 
483-484;  the  staple  crop,  38,  47; 
export  of,  51,  69,  80;  growth  of, 


suppressed  in  England,  141;  de- 
cline of,  229. 

Trade,  domestic,  between  colonies, 
76;  prohibited  by  Navigation 
Acts,  127,  150,  152;  retail  (1748), 
105;  (1806),  247;  coasting  (1791), 
203,  208  (table);  (1789-1815), 
208-  209  (tables) ;  internal,  240, 
381-385,  408-411  (tables),  644- 
651;  down  the  Mississippi,  244, 
3/9-385,  675-680;  along  Western 
rivers,  245;  character  of  Western, 
246,  247;  services  of  peddler  in, 
249. 

Trade,  foreign,  of  New  England,  43, 
70-74;  with  the  West  Indies,  45. 
75,  192-196,  207;  of  Pennsylvania, 
46,  70;  of  New  York,  45,  70, 
74-78;  of  Virginia,  69,  79;  in 
colonies,  69-81;  regulated  by 
Navigation  Acts,  120,  127,  148- 
!5i,  154-155,  160,  172;  the 
source  of  national  wealth,  129; 
stopped  by  non-importation  agree- 
ments, 171,  173;  between  Eng- 
land and  the  United  States 
(1784-1790),  192;  necessity  of, 
201;  with  the  Orient,  202;  with 
Europe,  207,  208-209  (tables); 
unfair  as  carried  on  under  neutral 
flag,  210;  injured  by  British 
and  French,  212-214.  See  Carry- 
ing-trade, Commerce,  Exports, 
Imports. 

Trade  unions,  795;  national,  798; 
membership  of,  800. 

Transportation.  See  Canals,  Rail- 
roads, Rivers,  Roads,  Stage-coach. 

Travel,  by  stage,  240,  350,  376-379; 
by  wagon,  240,  345,  352,  354,  363; 
by  river,  349,  35°,  352,  361,  371- 
385;  by  railroad,  350,  431. 

Treaty,  commercial,  with  England 
(1783),  185-196;  arguments 
against,  185,  187-189;  effects  of 


862 


INDEX 


failure  to  negotiate,  on  West 
Indies,  194-196;  reciprocity 
(1812-1854),  420-421. 
Trusts,  tendency  towards,  768-770; 
causes  of,  771;  advantages  of, 
772-774;  effects  of,  upon  prices, 
774;  effects  of,  upon  wages,  775. 

Vitality,  national,  its  wastes  and 
conservation,  851-853. 

Wages  (1750),  17;  (1698),  82;  of 
women,  83;  (1775),  84,  88,  in; 
(1748),  85;  (1802),  271;  (1806), 
285;  (1816),  344;  (1843),  526; 
(1869-1901),  809;  (1850-1880), 
815;  (1890-1900),  817,  824,  845, 
847;  and  the  tariff,  320,  330,  456, 
761;  and  the  public  lands,  455- 
457;  and  slavery,  572;  and 
prices,  808-809  (table),  81 1 ;  suffi- 
cient, 829. 

War,  of  Revolution,  economic  causes 
of,  143-166;  social  effects  of,  1 8 1- 
184,  219;  (of  1812),  217;  Civil, 
money  cost  of,  689-691 ;  effects  of, 
on  Southern  agriculture,  578-582, 
605-608,  620-629. 

Wealth,  of  people  of  United  States 


(1850-1912),  813;  forms  of,  814; 
comparison  of,  with  other  coun- 
tries, 815;  distribution  of,  815, 
822-827;  growth  of  large  fortunes, 
820;  expenditure  of,  827. 

West,  expansion  toward,  prohibited 
by  Proclamation  of  1763,  144; 
early  settlements  in,  234;  trade 
with,  245,  246;  opportunities  in; 
347-348;  routes  to,  345,  349,  350, 
3S2-356;  classes  of  population 
in,  356-357;  building  a  home  in, 
360-366;  internal  improvements 
in,  390-392;  migration  to,  450; 
(1880),  779. 

West  Indies,  export  of  provisions 
to  (1721),  45,  75;  (i774),  192; 
trade  with,  prohibited  after  Revo- 
lution, 193;  free  trade  with, 
urged  (1784),  193;  effects  on,  of 
prohibition  of  trade  with  United 
States (1780-1787),  194-196. 

Wheat,  in  the  colonies,  30-35,  39- 
40;  in  the  South,  221,  228;  as  a 
world  crop,  414,  438-442;  im- 
portance of,  636-639. 

Woolens,  manufacture  of,  264,  278- 
279,  283  (table),  293-296,  743. 


THE -PLIMPTON -PRESS 
NORWOOD-MASS-U-S-A 


RAILROADS,  RATES  AND  REGULATION 

BY  WILLIAM  Z.  RIPLEY,  PH.D. 

NATHANIEL  ROPES,  PROFESSOR   OF  ECONOMICS   IN   HARVARD   UNIVERSITY 

With  41  diagrams  in  the  text.     Small  8vo.     Pp.  xviii-659 
Net  $3.00  (by  mail  $3.20) 


FOR  various  reasons,  railroads  during  the  last  ten  years  have  occu- 
pied a  peculiarly  prominent  place  in  public  attention  in  the 
United  States.  Representing  an  investment  of  about  one-fifth 
of  the  nation's  wealth,  their  affairs  are  a  matter  of  direct  concern, 
through  bankers,  to  thousands  of  holders  of  their  securities  all  over 
the  country.  Every  merchant  and  manufacturer,  in  connection  with 
the  every  day  conduct  of  business,  is  bound,  as  a  shipper,  to  be  inter- 
ested in  their  status.  Several  million  officials  and  employees  are 
dependent  upon  railroad  welfare  for  their  livelihood.  The  general  pub- 
lic, as  consumers,  is  vitally  concerned  with  the  manner  in  which  they 
are  conducted;  and  now,  since  the  advent  of  strict  public  control  of 
rates,  in  the  outcome  of  that  political  experiment.  The  legal  profes- 
sion is  directly  interested  also  —  by  way  of  the  multitude  of  cases  now 
arising  for  settlement  before  the  various  federal  and  state  railroad 
commissions.  This  treatise,  more  detailed  and  elaborate  than  a,  mere 
text-book,  aims  to  set  forth  the  nature  of  the  railroad  problems  of  the 
time,  commercial,  fiscal  and  political;  while  at  the  same  time  avoid- 
ing the  extreme  technicalities  of  the  narrow  specialist.  This  first  vol- 
ume deals  with  the  matter  of  rates  and  government  regulation;  while 
a  second,  in  preparation,  will  deal  with  matters  of  finance  and  corpo- 
rate organization.  Amply  provided  with  footnotes  and  references,  the 
text,  nevertheless,  deals  with  the  subject  in  a  manner  comprehensible 
to  the  ordinary  reader.  Over  forty  maps  and  illustrations  in  the  first 
volume  alone  serve  to  render  the  problems  discussed  more  interesting 
and  intelligible.  It  is  a  work  which  should  appeal  alike  to  bankers, 
investors,  railway  officers  and  employees,  lawyers  and  publicists,  as 
well  as  to  all  students  of  economics  and  politics  and  the  serious  gen- 
eral reader. 

"  Professor  Ripley  is  presenting  the  most  exhaustive  study  of  the 
railway  problem  in  the  United  States  that  has  yet  appeared.  By  his 
intimate  knowledge  of  the  whole  field  of  railway  operation  and  by  his 
attractive  literary  style,  he  has  produced  a  book  that  is  likely  long  to 
remain  a  standard  authority  on  the  subjects  discussed.  ...  A  treatise 
of  high  merit,  and  the  most  scholarly  work  that  has  appeared  since 
Hadley's  book  in  1885." —  The  Nation. 

"  Taken  as  a  whole,  Professor  Ripley's  first  volume  seems  likely  to 
become  the  authoritative  treatise  on  the  subject." 

—  The  Economic  Review. 


LONGMANS,  GREEN,  &  CO.,      -      -       NEW  YORK 


RAILROADS,  FINANCE  &  ORGANIZATION 

BY  WILLIAM   Z.  RIPLEY,  PH.D. 

NATHANIEL  ROPES  PROFESSOR  OF  ECONOMICS  IN  HARVARD  UNIVERSITY 

With  29  Maps  and  diagrams  in  the  text.     Small  8vo.     Pp.  xx-638 
Net  S3. 00  (by  mail  $3.20) 


THIS  volume  on  Railroad  Finance  and  Organization  is  a  companion 
and  a  logical  successor  to  Railroads:  Rates  and  Regulation.  It 
is  not  merely  a  treatise  upon  the  details  of  railroad  finance  —  a 
stock  exchange  hand-book  or  a  bankers'  manual.  The  comprehensive 
treatment  of  such  matters  as  the  nature  and  kinds  of  railroad  securi- 
ties, the  course  of  market  prices,  and  receivership  and  reorganization 
should  render  it  serviceable  to  bankers,  investors,  and  members  of  the 
legal  profession.  Likewise,  the  amplitude  of  footnote  references  and 
the  wealth  of  historical  explanation  fit  it  for  academic  use.  But  it  pur- 
ports to  be  more  than  either  a  treatise  upon  private  finance  or  a  college 
text-book.  It  is  "a  constructive  essay  in  government,"  systematizing 
information  for  others  in  a  single  great  department  of  public  affairs. 
Until  within  a  few  years,  public  regulation  was  largely  concerned  with 
rate-making,  which  forms  the  subject  matter  of  the  first  volume,  already 
issued.  State  regulation,  however,  has  now  spread  over  into  the  field 
of  finaifce.  Partly  as  a  result  of  grave  losses  to  investors  through  mis- 
management and  dishonesty;  partly,  and  to  an  increasing  degree 
within  the  last  decade  because  of  a  belated  perception  of  the  economic 
truth  that  all  phases  of  the  great  business  of  transportation  are  inex- 
tricably entangled,  legislators,  public  officials  and  property  owners  have 
been  brought  face  to  face  with  a  large  number  of  financial  problems. 
Among  these  are  the  regulation  of  the  capitalization  and  financing  of 
public-service  corporations,  the  determination  of  reasonable  rates  and 
physical  valuation.  These  questio  s  are  discussed  in  a  large  way,  keep- 
ing the  collective  interest  in  view;  but  recognizing,  nevertheless,  that 
the  encouragement  of  private  capital  by  the  prospect  of  a  satisfactory 
return  upon  its  ventures  is  essential  both  for  adequate  service  in  the 
present  and  for  the  future  development  of  the  greatest  single  material 
agency  upon  which  the  industrial  life  of  the  nation  depends.  Many 
diagrams  employed  in  lieu  of  statistics  and  a  number  of  maps  serve  to 
clarify  the  text,  and  to  make  it  interestingly  readable. 

LONGMANS,  GREEN,  &  CO.,      -      -      NEW  YORK 


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